INDUSTRY NEWSNationalNEWS

Another record-breaking year for pub sales

After a record-setting year for pub sales across NSW last year, 2022 is shaping up to be even stronger.

According to Ray White Commerical, more than $1.5 billion in sales were recorded in NSW last year, bolstered by strong demand in coastal and regional markets together with more traditional metropolitan regions. 

In 2022, sales to the end of October for NSW have now eclipsed the full 2021 calendar year, suggesting there is still strong demand for hotel assets.

Ray White Commercial Head of Research Vanessa Rader said 2022 has been underpinned by some record-setting sales.

“While the buyer pool may have contracted, this year has recorded the largest sale on record being Casula Crossroads changing hands for $150 million,” Ms Rader said.

“Looking at the 12 months to date, we can see there has been a swing back to metropolitan assets represented by over $1 billion (54.2 per cent) of the $1.86 billion changing hands, while coastal assets accounted for 27.1 per cent of all sales.”

According to Ms Rader, last year saw a lot of activity in the regional and coastal pub market, while 2022 has seen a return to metropolitan regions.

She said the other factor fueling an increase in values has been the significant uplift in the cost of poker machine entitlements. 

“The auction of entitlements earlier this year was instrumental in setting a new premium, which now ranges from $625,000 to $675,000 after averaging sub $300,000 in 2020,” she said.

“Changing legislations and licensing restrictions on gaming put more pressure on the sector and have been instrumental in keeping values elevated.”

Ms Rader said looking ahead, there was an expectation that volumes will slow as listing levels have fallen.

“While the investors in the market have also reduced, the appetite to purchase and the finance availability has continued, which will keep values tight for premium quality assets,” she said.

“However, there is likely to be some pressure for price correction as well as yield softening across the broader market, particularly for those considered secondary in location or quality.”

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Rowan Crosby

Rowan Crosby is a freelance journalist specialising in finance and real estate.