The North Nowra Tavern has been sold, with a private equity consortium, Pub Invest, headed by ex- Citigroup banker Damian Kelly purchasing the property for around $13 million. .
The sale was brokered by HTL Property, of Sydney which has advised the sale of 18 hotel assets since February 2020 and has now brokered 21 sales this year.
It's the third time the Tavern has been sold in six years.
The property was put on the market back in March after one of the owners, Gary O'Donnell passed away.
His family and co-owner decided to sell the hotel as operating it from Canberra and Sydney became challenging.
The North Nowra Tavern was sold for $5.92 million at auction in March 2014 before being purchased in 2017 Gary O'Donnell and publican Mark Duggan for just under $12 million.
The pub has 25 poker machines and brings in over $7.5 million in annual revenue through its bar, bistro, gaming, wagering and retail liquor store.
The sale heralds Pub Invest's fourth hotel purchase, having steadily acquired the Crown Hotel (Surry Hills), the Corrimal Hotel (Corrimal) and the Rose and Crown Hotel (Parramatta) over the last few years.
"This acquisition illustrates our investment vehicle's fourth transaction in an asset class we feel satisfies a number of key real-return criteria, and enjoys downside mitigation factors not available to investors elsewhere," Mr Kelly said.
"We're granular and patient about our assessment of opportunities, but we're deliberate when we highlight a target and this won't be our last."
HTL Property agents Dan Dragicevich, Andrew Jolliffe and Sam Handy were exclusively appointed to steer the successful sale process.
"Hard yielding, high barriers to entry property driven assets are attractive to investors and transcend asset class appetite," said HTL Property National Pubs Director Mr Dragicevich.
"Consequently, they also provide investors with welcomed ROE respite from what are increasingly financially languishing alternatives."
The North Nowra Tavern is a large format coastal freehold strategically positioned next door to the North Nowra Shopping Centre, and within an exclusive trade catchment of around 6000 residents.
The hotel features a 1.30am liquor licence and was ranked 412th for the December 2019 quarter.
There exists a development application approval in place to significantly increase the size of the trading footprint and optimise the layout of the hotel.
Additionally, the North Nowra Tavern is situated on an underutilised 6019 square metre landholding with the sites zoning allowing for significant redevelopment potential and a broad range of permissible uses including neighbourhood shopping centres, medical centres and motel accommodation.
"Key coastal and regional centres along Australia's East Coast have been heavily investigated and consequently actioned by numerous leading hospitality investors over the past 12 months; this being our 13th coastal freehold sale in the last 12 months," said HTL Property's Managing Director, Andrew Jolliffe.
Other recent large-format coastal pub transactions concluded by HTL Property include the Kincumber Hotel ($14.5M), the Kent Hotel Newcastle ($24.5M), Elanora Hotel Gosford ($23.5M) and the Edgeworth Tavern ($10.3M).
"The reality however, is that very few opportunities present the scale and future proofed revenue generation levers that the North Nowra Tavern does, and it is for this reason HTL's buyer universe reacted so positively towards the opportunity."