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According to local gossip, when Sydney billionaire Justin Hemmes flew into Lorne for the first time by helicopter he assumed the pub he had just bought was the grand three-storey building overlooking the pier.
The trouble was that the historic but crumbling Grand Pacific Hotel had already been snapped up by another rich lister, Josh Rudd, owner of surf brand Ghanda and brother of musician Xavier Rudd.
Merivale owner Justin Hemmes says he fell in love with Lorne. Credit: Rhett Wyman
Hemmes had instead bought the more unassuming Lorne Hotel behind the town’s surf club for $38 million.
When he’s told the tale, Hemmes laughs and says that’s not quite what happened back in 2021 – although there is a grain of truth to the story.
“To be honest I’d never been there before,” he says. “I’d always heard about Lorne and I’d been down to the Mornington Peninsula a few times … I love that coastline and then I heard about Lorne coming up for sale.”
Hemmes says the first time he visited Lorne was to inspect the pub, but he was instantly smitten.
Hemmes bought the Lorne Hotel for $38 million in 2021.
“It felt like a great community and I loved the architecture down there,” he says. “It just felt special and it’s a beautiful piece of land in a wonderful location. I literally just fell in love when I went down there.”
The pub tsar heads up one of Sydney’s biggest hospitality groups, Merivale, which operates more than 70 venues across NSW including Mimi’s, Totti’s, Coogee Pavilion and Mr Wong.
The Lorne Hotel is Merivale’s first opening in Victoria but Hemmes, who the Australian Financial Review estimates is worth $1.1 billion, is not the only rich lister to fall in love with Lorne.
Rudd, who owns Torquay headquartered surf brand Ghanda, which has more than 100 stores across the country, has been quietly buying up prime real estate in the coastal town.
Rudd’s property portfolio in Lorne includes the local cinema, which was built in 1937 in art deco style, a former community hall that he has developed into Airbnb accommodation called The Pink Lodge, the Jetty Road Brewery, four other retail shopfronts and apartments on the main street.
Rudd’s purchase of the Grand Pacific in 2021 for $5.5 million is his biggest investment in the town, with plans to turn the 143-year-old pub into luxury accommodation.
A historic photograph of the Grand Pacific Hotel in Lorne which Joshua Rudd bought for $5.5 million.
“We have got some amazing plans to bring the venue back to its former glory,” Rudd says. “We are working to secure the best possible tenant that can ensure our dreams for the site become a reality.”
Hemmes is renting the Grand Pacific off Rudd as temporary accommodation for Merivale staff until Rudd undertakes his redevelopment.
According to Hemmes, Rudd is the “right custodian” for the Grand Pacific.
“He’s going to do something really special with it because it’s an iconic building in an incredible location,” he says.
The $32.5 million difference between the price paid for Lorne’s two pubs has raised some eyebrows, but locals say the Lorne Hotel has always been the more successful business, with the last operators of the Grand Pacific going into liquidation.
The Lorne Hotel is in the centre of the town and is the finishing point for the famous Pier to Pub swim, which attracts 5000 swimmers each January.
It also comes with a lucrative licence for 10 poker machines, which Hemmes is planning to keep in his renovations.
“I wouldn’t say [they are] a big money spinner, but they are part of the original pub,” he says.
Hemmes has been on a pub buying spree over the past two years, spending more than $320 million acquiring new venues, including the Lorne Hotel and Tomasetti House in Flinders Lane.
The rise of Hemmes’ empire has not been without controversy. He is currently defending a class action against Merivale brought by workers claiming alleged underpayments of up to $129 million.
Hemmes says his redevelopment of the Lorne Hotel requires a lot of work. Credit: Rhett Wyman
For now, his attention is on Lorne. After taking over from previous owners, the Upham family, he closed down the Lorne outposts of Melbourne restaurants MoVida and Coda, which previously operated as part of the pub, to install his own Merivale-branded venues.
The first of these, Totti’s, Merivale’s Italian trattoria, opened last month after extensive renovations to the lower level of the pub, where MoVida was.
Hemmes says he is going to work level by level through the building, which dates back to 1920 when the original 1867 pub burned down.
“It’s a big job, a beautiful, grand old dame and we want to bring her back to her former glory but there’s a lot of work that’s required for the back of house services and facilities,” he says.
“Now that we’ve got Totti’s on the ground level, we can move on to the middle floor, and then the rooftop as well as the accommodation.”
Hemmes is tight-lipped on which of the Merivale brands he will bring to Lorne and says he is focused on renovating the pub, which has proved to be “a can of worms”.
“There are some beautiful bones under there that have been covered up over the decades and we’d like to bring it back, pare it back, to some of its former glory,” he says. “It will require quite a bit of design work and time and there’ll be a big renovation job.”
Hemmes says there’s certainly room in the small coastal town for both his redevelopment of the Lorne Hotel and Rudd’s redevelopment of the Grand Pacific.
“I think so, it just adds more accommodation for guests, but it also opens up a wonderful destination for guests to stay at,” he says.
The Lorne Hotel is the finishing point for the Pier to Pub swim.Credit: iStock
In the meantime, his main concern will be weathering the winter months, which are a lot slower in Lorne than the NSW beach resorts Hemmes is used to.
“I’ve seen some of the businesses close down for a month or two months even,” he says. “We won’t shut down, we’ll definitely stay open. I’m not afraid of the cold.”
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