Merivale Group adds The DOG to its Sydney pub holdings

Hotelier Justin Hemmes’ Merivale Group has paid about $32 million to add Randwick’s the Duke of Gloucester Hotel, affectionately known as The DOG, to its collection of Sydney pubs.

JLL Hotels & Hospitality Group said the “discreet” sales campaign attracted significant interest from a wide ranging, established investor set that included hoteliers, unlisted investment funds, family offices and high-net-worth individuals.

Merivale bought the pub from Sydney hospitality operator Good Beer Company.

“The DOG has been a fantastic hotel to own, and a great local community to be part of, and we’re delighted to now pass it onto such well-respected operators as Merivale,” Good Beer Company owner John Azar said on Wednesday.

Merivale already owns a number of pubs in Sydney’s eastern suburbs including the Royal Hotel Bondi, the Coogee Pavilion and the Centennial Hotel in Woollahra, along with numerous other venues in Sydney.

The DOG presented an opportunity to own a large format, freehold going concern asset in the tightly-held eastern suburbs market, JLL said.

“As the NSW economic recovery gathers momentum, we have seen the market for operating real estate assets swell as capital is put to work in search for the stronger yielding opportunities that hotel assets offer,” JLL Hotels senior vice president Ben McDonald said.

Merivale bought ‘The DOG’ from the Good Beer Company. Picture: JLL

The pub typically generated about $180,000 in total weekly revenue and has a 2am hotel licence, JLL said.

JLL said it has now sold more than $250 million worth of hotels in the past fortnight.

The deals included the Redcape Hotel Group’s $38 million acquisition of the Gladstone Hotel in Dulwich Hill.

“The current weight of capital, and its divergent private and public sources, continues to drive transaction demand not seen in over a decade, yet again illuminating the asset classes undeniable investment attributes,” JLL national director John Musca said.