Iconic Cairns bar sold
ANOTHER southern buyer has snapped up an iconic Cairns property with the Grand Hotel and neighbouring properties with 14-storey development potential changing hands.
Brisbane-based Stronghold Investment Management has bought the landmark Cairns pub and adjoining blocks for what is believed to be about a $13m price-tag – up from $8.5m when the sites last sold in 2019.
Previous owner Oxford Hotels was well aware of the site’s prospects for more intensive development when it took over the property.
Oxford Hotels managing director Jaz Mooney – a pub baron in his own right who made his fortune in Ireland before selling up and moving to Australia in 2006 – said it was the right time to go to market. He will retain a personal interest in ensuring the pub is a success through a 10year lease agreement.
The hotel has 35 gaming machines, a drive-through bottle shop and six adjoining retail spaces – not to mention its famous crocodile-shaped bar, complete with teeth.
“We completed the renovation nearly two years ago and the community embraced it immediately,” Mr Mooney said.
“However, I am not a developer, so it was never a long-term vision of mine to hold the land indefinitely.
“I am delighted that I can stay on as the lessee and that Stronghold has seen the opportunity not only for the short and medium-term but in the long-term for this site prime Cairns CBD site.”
Stronghold director Steve de Nys said the company had plans to realise the trophy property’s full potential.
“We are delighted to finalise this acquisition on behalf of our investors in what has been a challenging transactional environment,” he said.
“In addition to the established hotel, the property includes circa 3100 sqm of land with development potential up to 14 levels. We look forward to working with local stakeholders and our tenant to maximise this potential over the medium term.”
CBRE Hotels national pubs director Paul Fraser, who negotiated the sale, said there were big opportunities for sellers as the market chased annuity of income and long lease expiry dates.
“Ultimately, the way we structured the lease meant that the owner was able to ensure continued high cash flow and profits year-on-year whilst also realising a high exit price which will enable Oxford to redeploy capital into other projects,” Mr Fraser said.
The buy boosts Stronghold’s hospitality assets under management to about $70m.
“Cairns continues to be one of a handful of Queensland regional centres where the appetite for landmark sites remains incredibly strong,” Mr Fraser said.
“This transaction also highlights the market appetite for structured deals that provide a beneficial outcome for both buyer and seller.”
The sale follows Sydney fund manager Tyche Capital’s recent purchase of the Hotel Grand Chancellor resort in Palm Cove for $10.88m.