Records tumble as pub sales soar
Interstate investors thirsty for yields are expected to turn their attention to Queensland pubs, after 2014 produced a record year for transactions in the hotel industry across Australia, research reveals.
Data from property group, JLL, revealed national transaction volume increased 117.1 per cent in 2014, to $1.7 billion, with 171 pubs changing hands, including the sale and leaseback of the ALH Group's pub portfolio of 54 premises to a Charter Hall Group led consortium for $603 million.
While NSW pubs accounted for 44 per cent of national sales, the latest JLL industry report forecast that interstate investors would turn their attention to Queensland pubs due to their softer yields and amendments to gaming legislation allowing hotels to increase the number of gaming machines in each venue.
JLL reported that 40 pubs changed hands for an estimated $409 million in Queensland last year, with legislative changes increasing the number of gaming machines a venue can have boosting their value to investors.
The report found that "solid year-on-year growth was recorded in the metro gaming sector", with gaming turnover hitting $15.6 billion in 2014, making profitability per machine $108,018 for the year — representing a growth rate of over 4.5 per cent since 2008.
"Nearly one quarter of all Australian poker machines are in operation in Queensland," the report said.
"Improved stability in legislation in this area has had a direct correlation to pubs' performance and ultimately market sentiment."
JLL also noted that the Victorian pub investment market had "bounced back strongly last year", with 43 deals worth $402 million going through.
"This represents a huge 179.1 per cent increase in transaction volumes on 2013," the report said.
AUTHOR
Nicholas O'Donoghue
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