Pub ownership possible in Tasmania
WHAT can a budget of up to $1.3m buy you in greater Hobart?
Perhaps an acreage. Or a city pad in North Hobart, Glebe or New Town. Certainly a beautiful beach house.
For some, that type of spend could be invested in a pub.
Last year, the Dorset Hotel was sold for $1.3m, while Hobart’s Welcome Stranger — with its huge development potential — changed hands for an undisclosed price.
2021 saw O’Keefe’s Hotel in Launceston sell for $1.225m and the Man O’ Ross Hotel transacted for $1.13m.
High profile Hobart establishments, the Cascade Hotel and Central Hotel, fetched $3.9m and $6.5m in 2019.
Another classic pub, Launceston’s The Royal Oak, sold in 2018 for the curious figure $1.190318m — not quite Danny Wallis, but an interesting price nonetheless.
On the market right now, budding pub owners will find the St Mary’s Hotel, Rosevears Hotel, Huntington Tavern, King Island Hotel and the Imperial Hotel in Branxholm among the many options.
Knight Frank pub and hotel expert, John Blacklow, has the Sheffield Hotel listed, and says the market’s response has been outstanding.
“It has attracted very extensive interest, particularly from the mainland, as there should be for one of Tasmania’s best country hotels,” he said.
“It is available to purchase either as an investment or to operate as a going concern.”
Over his 40-year career, Mr Blacklow has sold and leased about 450 pubs assets, some of them five or six times over.
“Investment hotels and motels are always popular in the marketplace. The freehold bricks and mortar is generally substantial and the returns are attractive,” he said.
While Tasmania’s residential sector sees locals driving 80 to 85 per cent of sales, pubs are different.
“Generally, the split is probably 60 per cent purchased by people outside of our state,” Mr Blacklow said.
“Mainland buyers are attracted to Tasmanian properties because they are generally cheaper. However, our lifestyle is usually better … people recognise that Tasmania is a preferred destination.”
In just the last two months, Mr Blacklow has sold the Heartlands Hotel, Scamander Beach Resort, Sunrise Motel in Devonport, the Cornelian Bay Boathouse, Herons Rise B&B at Kettering, and The Valley Sports Bar in New Norfolk.
He said there were more to come in the near future in Launceston and Hobart, in the city, suburbs and country locations, too.
This may seem like a lot, but generally he deals with 15 to 20 pubs per year.
“Due to Covid, over a three-year period, nearly all vendors put their property plans on hold until the business came back and the figures became good enough to attract purchasers,” Mr Blacklow said.
“You could say I have three years worth of hotels now banked up in 2023.
“We are finding that current figures right across the board for hotels and motels are now showing better revenue and profitability than what was achieved pre-Covid in 2019.
“Our tourism and hospitality industries have bounced back very quickly and the future looks bright.”