Happy hour for pubs as property investors pour in

Property investors have been pouring time and money into Australian pubs in 2025, especially those with pokies and redevelopment potential, according to new research. 

New CBRE research found investor sentiment had strengthened in 2025, particularly in New South Wales and southeast Queensland where yields had compressed.   

Experts say the pub sector offers investors strong income stability and liquidity despite higher operating costs, underpinned by food and beverage, gaming, accommodation and function revenues.  

But there were risks facing the sector as well, including labour shortages, changing consumer preferences, rising living costs, margin compression and regulatory issues.  

“As interest rates stabilise and cap rates compress, investor demand – particularly from institutional and syndicate-backed buyers – is poised to support modest uplifts in asset values, especially for venues with strong gaming entitlements and redevelopment potential,” CBRE research analyst Katya Ezhova said.  

The Beach Hotel in Byron Bay sold for about $140 million earlier this year. Picture: Supplied

Increased appetite from traditional bank lenders – particularly for assets with strong gaming entitlements and consistent cash flows – was adding further momentum to the sector, according to CBRE’s senior director of hotel valuations Kire Georgievski.  

“This resurgence in credit availability is enabling more competitive bidding, especially among private investors and syndicates, and is helping to underpin valuations,” Mr Georgievski said. 

Prospective pub landlords have upped their search efforts too, with new realcommercial.com.au figures showing buyer enquiries for hotels, pubs and other leisure property listings increasing eight per cent quarter-on-quarter in the September quarter, and jumping 10 per cent year-on-year.   

Investors have splashed more than $1.7 billion on pubs, bars and other leisure real estate nationally during the year to September, already surpassing the full year total in 2024, according to M3 Property research.  

The biggest pub deals of 2025 so far include the sale of the Beach Hotel in Byron Bay for about $140 million, and the Silverwater Hotel in Sydney for around $77 million.

The Silverwater Hotel in Sydney was traded for around $77 million earlier this year. Picture: Supplied

James Ruben, national director of specialised assets at M3 Property, said private investors had dominated pub deals this year.  

“The Australian pubs, bars and nightclubs industry, which is valued at approximately $20 billion, is navigating a dynamic period shaped by evolving consumer preferences, economic headwinds, and regulatory changes,” he said. 

“The sector is now dominated by private investors, accounting for 100% of transactions this year, with institutions stepping back amid rising capital costs and yield compression. 

“Looking ahead, expected RBA interest rate cuts combined with an expanding buyer pool and an increase in public sale campaigns point to a more liquid and active market environment over the remainder of 2025.”  

Aussie pubs face challenges too, ranging from new consumer demands to regulatory changes.  

Total number of pubs, taverns and bars, as of June 2024 

Ms Ezhova said consumer preferences were shifting toward flexible, experience-led venues, which were challenging traditional pub models.  

“Without adapting to evolving expectations, pubs risk misalignment between their offerings and what modern patrons value; atmosphere, events and personalised service,” she said.  

Cashless gaming reforms were identified as a key area of regulatory focus.   

“Uncertainty around regulatory implementation timelines and compliance costs is dampening confidence in the pub sector, particularly in NSW, where investor sentiment has turned increasingly negative,” Mr Georgievski said    

“This adds another layer of risk to an already pressured operating environment.”  

Australia was home to some 6,961 pubs, taverns and bars as of June 2024, with more than three-quarters of located across the east coast, according to CBRE and the Australian Bureau of Statistics.