A surge of interest in regional hospitality real estate by metropolitan-based investors has helped boost the sale of three New England pubs in 10 days.
The Royal Hotel in Moree has been purchased by established hotelier Jim Knox who will takeover as the new owner today (August 4).
Mr Knox first purchased Armidale's Whitebull Hotel for the record price of $13.25 million, while the town's The Royal Hotel also sold for more than $5 million, to the Roche Group last week.
The Moree deal, exclusively brokered by HTL Property agent Xavier Plunkett, was conducted via a buy-side mandate.
Mr Knox is familiar with the town, and has other agriculture-related business interests locally.
Robust local GDP drivers in concert with the enormous irrigated cotton farming enterprises, strong blue collar employment, significant infrastructure spending such as the $15 billion Inland Rail Project, the nearby $3.6 billion Santos Pilliga Gas Project and increasing post CV-19 domestic tourism numbers all appealed to Mr Knox.
"Moree is a historically resilient economy," he said.
"We are particularly familiar with the town, and have adopted a positive view regarding the prospects for both the pub and the region," Mr Knox added.
Mr Plunkett, said despite Moree being one of the highest performing pub towns in New South Wales on a per capita basis, the major pub groups had historically shown a reluctance to enter the town largely due to geographical constraints.
"It is however our considered view as agents, that these high-quality hotels in regional towns actually represent some of the most astute purchasing opportunities on offer across any real estate backed asset class," he said.
"Attractive yields, enormous infrastructure spending, consistent and maintainable cash flows, diversified revenue streams, and topically, comparatively limited disruption from CV-19 related lockdowns," he added.
The current owners, Debbie and Tim Evans, will retire with plans to travel (Covid-permitting).
All the current staff and management will stay on and it will be "business as usual".
"It's a very good pub already so it will be run as-is with just a few minor improvements to be made," Mr Plunkett said.
HTL Property is a national operator specialising in the hotel industry.
Managing director Andrew Jolliffe said they had transacted on more than $40 million worth of hotel assets in the New England region in the past month.
"I think the domestic market has looked a bit inwards because borders have been closed, and people have been travelling to regional areas for recreation and reconnected with these areas," Mr Jolliffe said.
"It's given them some confidence to turn those recreational thoughts into commercial investment thoughts."
There had been an 'extraordinary increase' in the number of metro-based investors prepared to invest regionally, according to Mr Jolliffe.
"We've always had a handful, but now we've got substantially more," he said. "We think the paths that have been well worn over this past 18 months will retain interest regionally in pubs and accommodation being attractive investment assets for capital that's domiciled in metro areas."
Sign up for our newsletter to stay up to date.