Iconic Sydney venue snapped up by Endeavour

by Noah Taylor Last Updated
Iconic Sydney venue snapped up by Endeavour

A pubs and pokies heavyweight has invested in the lucrative Sydney pub scene, swooping on a Iconic Sydney and northern beaches venue for $40 million.

The Sydney Morning Herald reports that Endeavour group joined with property group Charter Hall to purchase the sprawling Terrey Hills Tavern in Sydney.

The sale will be a bonanza for the Sydney-based Feros family, which bought the 1.6-hectare property in 2008 for $13.5 million.

Under the sale, Endeavour, which has Melbourne pub baron Bruce Mathieson as its major shareholder, will take over the leasehold, which includes about 20 poker machines, while Charter Hall, through its managed fund, will require the freehold.

It is the first Sydney acquisition in 15 years by ALH, which merged with the Woolworths-backed Endeavour Group in 2020.

Endeavour subsequently spun out of Woolworths in a public float in June 2021 and Mr Mathieson has a 14.6 per cent holding.

Endeavour spins off from Woolworths and makes bold investments

A spokesperson for Endeavour said the Iconic Sydney pub purchase was a good fit for the company’s extensive portfolio and the company would continue to provide a “great service” to the local community.

“Endeavour Group is pleased to welcome the Terrey Hills Tavern to the group and consider it a great fit with our portfolio, adding to both our hotel and retail networks,” the spokesperson said.

Endeavour’s move comes just weeks after its split from Woolworths in a $10 billion demerger that saw the business instantly become the country’s largest drinks retailer and pubs operator.

It’s also a swift follow-through on Endeavour’s promise to increase its level of investment in the pubs side of its business.

Chief executive Steve Donohue said at the time that the segment had largely been neglected under Woolworth’s ownership.

“We aspire to not only improve our existing hotels but perhaps add to our network in a really considered and disciplined sort of way,” he said.

“We feel confident in our ability to bring a number of new hotels into the fold.”

Charter Hall entered the pub sector with a bang in 2004, teaming up with superannuation fund Hostplus to buy a $603 million portfolio of assets leased to the Woolworths-backed ALH Group.

HTL Property nationalism director Dan Dragicevich, who advised on the sale, said the bidding process was competitive and attracted a number of buyers.

“It is broadly accepted within the asset class that AAA grade properties such as this are in scarce supply, hence the importance of ensuring both visibility and accessibility on a very public and national level was paramount to the outcome achieved,” Mr Dragicevich said.

The sale of the sprawling site is the latest move in a red-hot market, which has seen a flurry of activity despite the pandemic-enforced lockdowns.

In the past month alone, nearly $300 million of pub assets have changed hands from inner-city corner sites to sprawling properties in Byron Bay and south of the Iconic Sydney Coogee pub in the St Georges Basin for $7.75 million.

Dees move away from pokies following sale of Bentleigh Club

Melbourne Football Club will sell the Bentleigh Club in a move that will net the club more than $20 million.

The club plans to invest the funds from the sale of the pub into a future fund, which is planned to generate revenues to offset the annual gaming revenues lost from gambling.

The move comes after the Western Bulldogs, Collingwood and Geelong had all divested their stakes in poker machine venues in recent years and North Melbourne was the first club to walk away from poker machine revenue.

Five Victorian clubs, Carlton, Essendon, Richmond, Hawthorn and St Kilda, were all awarded new 20-year licenses in 2018 to operate machines.

Essendon at the time said the longer-term plan was to move away from gaming, while St Kilda has said they want to reduce their reliance on gaming revenue once they find alternative revenue streams.

Richmond president Peggy O’Neal said in 2020 that after litigation regarding the lease of the Wantirna Club had been completed, the club was “in a position to consider the club’s long-term position with respect to gaming”.

Hawthorn president Jeff Kennett has been defiant that the club was involved in legal venues that delivered significant income and they would remain involved in gaming until an alternative revenue source was available, but that would not happen in the short or medium term.

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