Cheers! Bay pub sells for $70m
A MELBOURNE-based fund manager has splashed out $70 million to buy the famous Beach Hotel in Byron Bay – a move it says will regenerate the “heart and soul” of the tourist town.
Impact Investment Group – linked to the wealthy Melbourne-based Liberman family – bought the pub off keen race car driver Max Twigg.
Mr Twigg is set to make a handsome profit, if the deal settles in six months’ time, as the purchase price is $26 million more than he paid in 2007.
The hotel, situated on a 4585sq m block at 1 Bay St, was developed by Paul Hogan’s business partner, John Cornell almost 30 years ago, mainly from the proceeds of their film Crocodile Dundee.
The hotel is leased to Melbourne pub industry identity John van Haandel, who recently renewed the lease for another 10 years, and who pays approximately $4.4 million in annual rent.
IIG said in a statement that it saw potential through the purchase to regenerate the “heart and soul” of Byron Bay through sustainable and social initiatives in the next three to four years.
“We’re looking forward to settling this transaction in six months’ time,” the statement reads. “It’s a great hotel and we’ve already made a lot of progress planning our environmental upgrades and how we’ll work with the operator and locals to deliver real positive impacts for the Byron Bay community.”
IIG has more than $730 million in existing assets and those under construction.
It seeks “good financial, social and environmental returns,” from its investments, which may include undertaking water and energy-saving initiatives.
CBRE Hotels’ Daniel Dragicevich and Wayne Bunz acted for IIG in what was an offmarket purchase.
“There are very few landmark beachside hotels like this in Australia, both in terms of scale and location,” Mr Dragicevich said. “The oceanfront site, lease covenant and future development upside provide a compelling mix for investors such as IIG.”
Mr Bunz said the buyer saw the two-level property, which has several bars and bistros overlooking Byron Bay’s surf, as well as conference facilities and 25 hotel rooms, as a longterm investment.
He said any future development would stay within the existing footprint.
“I can’t imagine anything built that goes higher than the current two levels,” he said.
Mr Twigg made his fortune in waste management.
This year IIG bought its second commercial building at the Brisbane Showgrounds redevelopment, paying $140 million for Lendlease’s 25 King building.