Fresh from its $6 million purchase of East Victoria Park’s historic Balmoral Hotel, listed property trust and management operator, ALE Property Group Limited, is targeting other Western Australian pubs.
Fresh from its $6 million purchase of East Victoria Park’s historic Balmoral Hotel, listed property trust and management operator, ALE Property Group Limited, is targeting other Western Australian pubs.
ALE floated on the Australian Securities Exchange in November 2003 following the divestment by Foster’s of its hotel property business.
ALE has since built a portfolio of 103 pub properties worth more than $797 million.
Despite being the country’s largest listed freehold owner of pubs, ALE’s portfolio has little weight in WA, with just Fremantle’s Sail and Anchor, The Queens in Mount Lawley, and now the Balmoral to its name.
ALE owned the Wanneroo Villa Tavern until last week, when it offloaded the freehold title for $1.55 million to Australian Leisure and Hospitality Group Limited (ALH), a joint venture between Woolworths and hotelier Bruce Mathieson.
The Wanneroo Villa Tavern deal was one of four ALE-owned pubs over which ALH had exercised a call option, stemming from a 2003 one-off agreement between the companies.
ALE Property Group managing director Andrew Wilkinson told WA Business News all of its pubs were managed by ALH under long leases and it hoped to find more opportunities where the group could keep ALH as a tenant.
ALH currently manages a number of other prominent pubs in WA, including Perth’s Belgian Beer Café, The Como, Foundry Pub and Grill, The Vic, The Brass Monkey, The Saint and the Dunsborough Tavern.
Mr Wilkinson said the group was on the lookout for long-term lease opportunities on pub properties, non-pub stand-alone retail, and distribution centres in strategic locations.
“The revaluations we’ve obtained in WA have been very good and the properties have been trading well too,” he said.
Since August 2003, the value of ALE’s pubs in WA has risen by up to 35 per cent, in line with strong property market conditions.
Mr Wilkinson said ALE was also seeking property based community assets such as schools and hospitals to provide a long-term secure cash flow.
“We’ll only pay the right price and not what the vendors are asking for, which is often way above market value,” he said.
“There is a point we won’t go past and that’s past market value. With the Balmoral, the property trusts couldn’t match the yields we were buying at, but that was market value.”
ALE acquired the Balmoral on a net yield of 6.3 per cent before transaction costs.
Another property that may be of interest to ALE is The Brisbane, which has become a Beaufort Street institution after Geoff Hayward renovated the premises in 2004.
It is understood Mr Hayward is fielding several offers for the property.
