Melbourne’s pub market is experiencing a resurgence of activity, with the recent transaction of the freehold interest in the Cornerstone Hotel drawing a yield of 4.5 per cent.
This is the first time the Cornerstone Hotel has been offered to the market in 25 years, and the historic Port Melbourne pub attracted six offers under a four-week expression of interest campaign.
Handled by JLL Hotel’s senior vice president Will Connolly and executive Lachlan Persley, the transaction is the second successive freehold pub sale by JLL Hotels & Hospitality in the last month, following the sale of Hotel Collingwood.
Acquired by Melbourne hospitality leaders Only Hospitality Group, Hotel Collingwood transacted at a competitive yield of 4.63 per cent, with both sales securing capitalisation rates below five per cent.
Speaking about the transaction, Connolly says that the appetite and activity within the Melbourne pub market has begun to re-emerge, and that fully leased investments continue to defy market expectations.
“It’s been evident to our team in recent weeks, that a renewed sense of vigour has begun to permeate through the metropolitan market. Transactions such as these further exemplify that our market, at least from a local perspective, is beginning to turn the corner on a challenging period,” he stated.
As the market continues to thrive, JLL Hotels is currently handling a trio of inner-city pub sales, including the Quarry Hotel in East Brunswick, the newly-refurbished Hotel South Melbourne, and The Kent Hotel in Carlton North, which is on the market for the first time in 20 years.
Connolly also hinted at two further offers that will soon be brought to the market, being the freehold and business interests of two of Melbourne’s prominent food, beverage and gaming assets.
