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John Azar’s Good Beer Company is taking advantage of the frothy pub market with the sale of two key hotels, the Union Hotel in North Sydney and the popular Harold in the inner city as it reweighs its portfolio.
The group in May sold the Commodore pub in McMahons Point to Glenn Piper for about $30 million. The two new sales are valued at an estimated $37 million in total.
Now widely considered one of the most resilient operating real estate asset classes in the country, pubs have been a major drawcard for hoteliers seeking to grow portfolios and investors wanting exposure to the strong underlying cashflows and trading fundamentals on offer.
The Union Hotel in North Sydney is being sold by the Good Beer Co 
There has been close to $2.5 billion of pubs changing hands in the past year. The sellers range from families who want to move on, to owner/operators looking to revitalise their portfolios.
JLL hotels executive vice president Ben McDonald and senior vice president Kate MacDonald have been appointed to steer the campaign on behalf of privately held Good Beer Co which is reweighting its hotel portfolio in line with its ongoing operating strategy.
McDonald said with both assets having recently undergone significant refurbishments, the pubs offer interested parties the ability to capitalise on combined weekly revenue exceeding $142,000, over 2100 square metres of trading floorspace and 34 gaming machine entitlements.
The Union Hotel has been a stalwart in North Sydney when in 2021, after 20 years of ownership, Patrick Gallagher sold the pub to the Good Beer Co for a reported $20 million. It was previously owned by the late media personality Mike Willesee who sold it to the Gallaghers in 2002.
Located on a 784 square metre lot on the prominent corner of the Pacific Highway and West Street, the Union is an Art-Deco-style two-storey pub providing three bars, a restaurant, gaming with 21 machines, a function room and offices.
In Forest Lodge, near Glebe, the Harold, previously the Harold Park, consists of 900 square metres of trading space on a high-exposure corner, directly opposite the Harold Park residential complex by Mirvac, which houses about 500 residents.
Having recently managed seven of the eight pub transactions in metropolitan Sydney so far in 2023, including the nearby Commodore Hotel in McMahons Point and the famous Oaks Hotel, Neutral Bay, JLL expects interest in the two assets to be healthy given the attractive price points of each asset relative to the most recent transaction data.
Kate MacDonald said the investment fundamentals of each asset with a core focus on the underlying growth of each location, “is set to play a key role in the campaign”.
The Harold in Forest Lodge is being sold by the Good Beer Co. 
“Whilst the businesses currently offer an attractive revenue profile for hoteliers and investors, we fully expect our business case for profit enhancement to play out in the short term as local infrastructure and the neighbouring development pipeline of projects are realised,” she said.
In Mackay, Queensland, demand is also high with Redcape – now part of the MA Financial group – selling its two large format pubs. The formerly ASX-listed vehicle is the owner and operator of 35 hotels nationally and has engaged agencies HTL Property and JLL to sell the assets.
The two Mackay hotels being sold by Redcape are The Shamrock Hotel and The Grove Hotel; both representing large land holdings and enjoying multiple revenue streams in established areas of the burgeoning Queensland regional centre.
The combined value is about $50 million, with buyers likely to be a range of owner/operators and investors.
“We’ve been fortunate to manage the sales of multiple Queensland-based hotels to Sydney-based investors in the past month, indicating to us a robust and still particularly fertile transaction platform for cross-border investment by both corporate and private entities,” HTL Property, managing director, Andrew Jolliffe said.
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