Manly’s Hotel Steyne could go ‘cheap’
The high-profile owners of Manly’s Steyne Hotel are fielding several offers from local buyers, with the highest bids coming in at above $60 million, well short of the $90 million initially expected by co-owner John Singleton.
Tensions between the owners including former Packer confidant Robert Whyte and financier Mark Carnegie are understood to have contributed to the decision to sell the hotel in February, effectively dissolving the partnership dating back to 2010 when they stumped up $27 million for the hotel.
The owners had hoped to lure a large Asian development group, which could see the value of the pub’s site on Manly’s Corso as attractive for a major redevelopment, but to date there has been no Asian interest.
Commercial Insights: Subscribe to receive the latest news and updates
“We have received a number of strong local and international expressions of interest and have shortlisted the parties to four for a second-stage expression of interest,” says co-selling agent Andrew Jolliffe, managing director of HTL Property Asia Pacific.
“We are in the process of finalising the second stage.”
Jolliffe did not comment further but sources say the bidding is above $60 million. It is understood there have been tensions between partners and disagreements over the marketing campaign, leading to the hiring of Colliers for marketing. There was also talk that one of the co-owners could attempt to buy the hotel outright. Sources told The Australian yesterday that few of the partners were speaking to each other.
Since 2010 they have forked out about $5 million refurbishing the hotel. At one stage billionaire Gerry Harvey was a co-investor but Harvey, son of a publican, sold out saying he didn’t have the appetite for pub ownership.
It is understood pub tsar Justin Hemmes did not bid for it.
Under the ownership agreement, struck when the hotel was acquired, if one party wanted to sell, the others had to fall in line. Singleton has previously said it would be sold no matter what price is achieved and the hotel had more than doubled sales and profits since the consortium bought it.
“We will sell it even if we don’t get the price we want. It is running very well and making a lot of money,” Singleton says.
He says the decision to sell came down to whether to redevelop: “We are pretty strong characters. Four strong personalities own it. So the agreement we had was to sell it. I wanted to make it a 10-star world’s best resort.”
That would have cost between $80 million and $100 million and, according to Singleton, taken 10 years.
This article originally appeared on www.theaustralian.com.au/property.