Thoughts of a recovery in the New South Wales and Queensland pub sector might have to be put on hold, after an auction of $75 million worth of hotels finished without a single site being sold.
Melbourne-hotel group Aussie Leisure Group put the five hotels in NSW and Queensland on the market.
The properties included the two hotels in Sydney (the Woolloomooloo Bay Hotel and Cambridge Tavern), a Newcastle pub (the Iron Horse Hotel at Cardiff) and two in Queensland (Magnums hotel and nightclub at Airlie Beach and the Commercial Tavern in Ayr, near Townsville).
Reports have suggested that the buyers felt the vendors may have set their price expectations too high.
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The Woolloomooloo Bay hotel was passed in at $15.9 million, below the $17.25 million price paid by the vendors back in 2005.
The Iron Horse passed in at $9.7 million on a yield of 7.34%. Both properties were passed in on bids from Sydney investors.
The high-profile Airlie Beach property was passed in on a vendor bid of $15.75 million, while the Commercial Tavern at Ayr was passed in for $7.8 million and the Iron Horse was passed in at $9.7 million.
The Cambridge Tavern at Fairfield was withdrawn from the auction to allow negotiations to take place privately.
Despite the lack of sales at auction, CB Richard Ellis agent Joel Fisher told the Australian Financial Review he expected two sales to be completed by the end of the week after private negotiations.
In other pub news, a distressed pub fund backed by John Singleton and investment firm Lazard Carnegie Wylie are set to grab a pub bargain.
According to report in The Australian, the fund is set to purchase the Steyne Hotel in Manly for about $27 million, well below the $47 million price paid by the current owner, the McHugh family.
Singleton has invested $20 million into the $100 million fund, which is hunting for cheap pubs.
Given the results of yesterday’s auction, it appears the fund will find plenty of targets.