New record set for freehold Queensland pub investment

New record set for freehold Queensland pub investment

Club Hotel Waterford, a prominent Coles-leased hotel in South East Queensland, has been acquired by Charter Hall for $22million.

The hotel is currently leased to Coles' Liquorland.

CBRE Hotels’ Director Paul Fraser managed the sale process on behalf of Waterford West.

“In a sign of the continued strength of the hotel sector, the sale of the property was transacted at a yield of 5.68% a new record for a freehold pub investment in Queensland,” Fraser said.

Waterford West’s Richard Pegum said: “We were delighted with the outcome and very impressed with CBRE’s management of the process, which generated significant investor interest.”

Club Hotel Waterford occupies a 1.1ha corner site, offering two main arterial road frontages. The tavern features 45 gaming machines, a sports bar, First-Choice liquor barn, three detached bottle shops, and is set to undergo a $1.25million refurbishment under the terms of the new lease agreement.

“The new double net lease has an initial 15-year term with three options of 10 years, ensuring a long term, secure investment opportunity,” Fraser noted.

“Assets of this quality are highly sought after and typically generate buyer interest from multiple groups seeking long term, security of income. Even with all economic indicators pointing to an increase in the cost of debt over the longer term, confidence remains strong for this asset class with the limited availability of stock being a major factor in the end pricing.”

A new report released by CBRE - Retail Pub Trends - highlights strong demand for pubs in South East Queensland as investors look for higher yields, but the lack of available stock is limiting transactions.

"Investors, particularly from a pool of NSW buyers, continue to hunt for assets in South East Queensland;
however, not many owners are willing to part with prized assets," the report notes.

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