Tankstream goes into Dry Dock

Tankstream Funds Management has added a fourth pub to its unlisted property trust specialising in leisure assets.

The trust has bought the Dry Dock Hotel in Balmain in Sydney for $5.15 million with a yield of just below 10 per cent.

The pub has 12 poker machines, a TAB operation, dining areas and a busy bar.

Tankstream managing director Craig Williams said the latest acquisition was close to another asset in the trust, the Bald Rock Hotel in Rozelle, and the company expects to achieve operational and management efficiencies between the two assets.

“Pubs are an asset class with traditional property sector characteristics,” he said.

“Investors are recognising the potential for pubs to provide attractive income returns and capital growth.”

With the latest acquisition, the trust now has four pubs in New South Wales worth $22 million. In addition to the two Sydney pubs, the other two assets are at Windsor and Moree.

Williams said the fund aims to have a spread of properties along the eastern seaboard of Australia.

“The pubs we want to buy as going concerns as well as owning the freeholds,” he said.

“We think this will make our retail offering unique in the marketplace as we will own both the real estate and the business in the one fund.”

The Tankstream Pub and Leisure Group Trust has delivered 9 per cent distributions to investors since it opened in May 2006.

Investment in the fund is through $1 stapled shares and the minimum investment is $5,000. The fund is open-ended so it can continue to raise funds after the initial capital raising.

Tankstream now has $50 million of funds under management including significant investment by the management team.