Investors and other pub operators are likely to take an interest in the property.One of Sydney’s well-known watering holes, The Marlborough Hotel in King Street, Newtown, is on the market as owners and good mates Geoff Dixon and John Singleton look to reshape their pub portfolio.
Owned by Riversdale Group, which was founded by Paddy Coughlan and is managed by Mr Dixon, Mr Singleton and another partner, Mark Carnegie, the Marly, as called by the locals, is expected to reap as much as $35 million.
It is being sold by Ray White Asia Pacific director Andrew Jolliffe, who said with upside in all departments, none more apparent than operational improvements in the gaming room, and the activation of the development-approved rooftop terrace, investors and other pub operators would be taking an interest in the property.
The potential sale comes as the pub sector is having a golden year of high demand.
In the past year up to $500 million of pubs have changed hands including 16 from the Lantern Group, the Clovelly in Sydney’s eastern suburbs, and three by Mr Dixon and Mr Singleton’s Australian Pub Fund, part of Riversdale Group.
Mr Dixon, the former chief executive of Qantas, confirmed the sales, saying it was the “right time” in the cycle to sell the two pubs.
Riversdale’s Australian Pub Fund bought the Marlborough for $12.17 million in 2012.
Mr Dixon told Fairfax Media last year when he started the sale process, that the time was right to take advantage of the strong pub market.
He said it was the group’s decision to focus on other pubs and divest the well-known hotels to keen buyers.
“However, we are not liquidating, as we are also keen buyers, as always, at the right price. These pubs are big gaming pubs which are well patronised for a certain demographic,” Mr Dixon said last year.
Pub operators that don’t have a presence in Newtown, which is outside the lockout drinking zones and so can open until late, include Justin Hemmes of Merivale, Mauricio Terzini, Patrick Gallagher, Andrew Lazarus and the Ryan family.
“The Marlborough is the most significant freehold hotel currently on the market nationally in Australia, and not surprisingly following over 20 A-grade freehold hotel sales in the most recent six months, we’ve been commensurately inundated by high-quality domestic and international inquiry,” Mr Jolliffe said.
“Fundamentally, this is a landmark hotel, and for generations has drawn robust patronage from the local residents, proximate Sydney University campus constituents as well as the large shift-worker base at Royal Prince Alfred Hospital just down the road.”
Mr Jolliffe said that during the past few years the hotel had also benefited noticeably from the increased popularity of Newtown as an entertaining and dining precinct, given it was beyond Sydney’s lockout zone.
“We’ve sold a number of Newtown Hotels before, and many to tier 1 and particularly well-known hospitality operators, but not all such operators are currently represented in Newtown; and that’s been the exciting revelation for us in terms of the commencement of the campaign, with strong interest from key parties representing hugely successful hospitality and property-based businesses,” he said.
“Apart from the sheer size of the corner block, of about 1000 square metres and over multiple levels, is the potential for huge upside in the form of the DA-approved rooftop area.
“Several examples of which, including the Republic Hotel in Pitt St and The Glenmore Hotel in Sydney’s Rocks precinct, are illustrative of the potency of evocative al fresco spaces in densely populated suburbs; a phenomenon originating from New York’s progressive boroughs such as Manhattan, Brooklyn and Queens.”