Sydney’s Robin Hood Hotel $60m-plus sale could start trend

The Robin Hood Hotel is hitting the block with an asking price of more than $60m.

The defeat of the Perrottet government in last weekend’s NSW election paves the way for greater certainty in the gaming industry and could spark a new round of large pub sales.

Big investors in the sector were sitting on their hands ahead of the election, as the former premier’s push to make all of the state’s poker machines cashless and collect data on customers rattled investors.

E&P Financial Group analyst Phillip Kimber told clients that Labor policies were less onerous than the Coalition’s plans. Labor will still undertake moves including a mandatory 12-month cashless gaming trial in NSW in a mix of pubs and clubs across the state, and an independent panel will come up with a road map for gaming reform.

The ALP has also pledged to introduce poker machine cash input limits and to cut the amount of machines in NSW. It will also introduce third party exclusion to target money laundering and bring in mandatory facial recognition.

But E&P said a majority Labor government in NSW was expected to reduce investor fears of a statewide rollout of cashless gaming machines and potentially more onerous legislation impacting problem gambling.

In one of the first big offers, the Sydney eastern suburbs institution the Robin Hood Hotel is hitting the block with an asking price of more than $60m. The offer is likely to bring out the big guns of the city’s pub scene, as so few large-scale hotels have been offered over the last five years in the area.

The sale is being handled by hospitality brokers HTL Property, for a family exiting after three generations of ownership. It is selling the hotel and surrounding development site.

Agents Andrew Jolliffe, Dan Dragicevich and Sam Handy expect both local and national interest from industry players keen to acquire the prestigious and hugely profitable hotel icon.

Originally built by Tooth & Co in 1938, the stately multistorey hotel recently underwent an $8m renovation and refurbishment and now provides for a much larger trading footprint and patron capacity across two levels and a unique license.

“The Robin Hood Hotel presents as an expansive mixed-use hospitality asset with upside development potential enmeshed into the fabric of the local community over decades of loyal patronage,” Mr Jolliffe said.

The Robin Hood is at the gateway to the Bronte retail precinct, the affluent eastern suburbs nearby beaches Bronte, Clovelly and Coogee.

“Eastern suburbs pubs are notoriously tightly held, as evidenced by 44 years of continued tenure by the current owners, hence our expectation is that the market will gravitate towards the already substantial cashflows the business is generating; and the underwritten value of the commercial land holding being offered over multiple titles,” Mr Dragicevich said.

The property includes a 1757sq m landholding with favourable zoning and planning guidelines, with future mixed-use redevelopment potential.

Gaming analysts also believe that the listed Endeavour Group will also benefit from greater certainty but say its exposure to NSW is limited. E&P estimated that a 10 per cent reduction in Endeavour’s NSW gaming revenues would only result in a 1 per cent decline in group profits.