The Queensland regional pub market is expected to surge this year with owner/operators tapping into the opportunity for big returns for hotels in country areas backed by strong local economies.
Power Jeffrey & Co’s Andy Nason said with local support most country pubs weathered the coronavirus storm last year and the market was primed for a strong 2021.
“The regional hotel market will be absolutely flying this year,” he said.
“And the main reason is that money is so cheap. You can borrow at 2.5% and get an 18% return.
“I actually describe these pubs as excellent milking cows. You plug them in and milk them for five to 10 years.”
Mr Nason said while bush pubs generally performed well during COVID last year compared to those in the city, Power Jeffrey there were slim pickings with the standouts being the sales of Tony Prentice’s Weeroona Hotel at Goodna to the Falvey Hotel Group and his Walloon Hotel to the Gibson family.
This year the agency has kicked off an auction campaign to sell Mr Prentice’s Commercial Hotel in Gatton, west of Brisbane, later this month.
Other regional pubs/motels seeking new owners including Tieri Brologa Hotel/Motel, Pit Pony Tavern/Motel in Collinsville and Banana Hotel/Motel, all in central Queensland.
Mr Nason said they were what he labelled “rounded pubs” with gaming, accommodation, bars, food and retail located in an increasingly strong economic region.
“Regions like central Queensland are absolutely booming with mining, cattle, grain and all of that. People don’t understand down here. It’s pumping,” he said.
“In a lot of regional areas there’s a huge amount of activity with the building of solar and wind farms and that’s driving accommodation, particularly in central Queensland.
“It’s actually happening in almost every regional area.”
National director, hotels at Savills’ Leon Alaban said in 2021 he expected Victorian and NSW Hoteliers diversify their portfolios by venturing into Queensland.
“Yields are expected to compress as buyers seek returns better than term deposit interest, and property is considered a safe haven investment,” he said.
“Large regional assets will be sought after as buyers continue to seek higher yielding returns along with large suburban metro gaming venues will remain the sought after commodity”.
Article From – RealCommerical – Written by Christopher Herde| 08 JANUARY 2021
This article originally appeared www.theaustralian.com.au/property