THE Grafton Hotel has changed hands after 41 years of family ownership in another Northern Rivers pubs deal this week, following Justin Hemmes’ Merivale Group purchase in Byron Bay.
Hotelier Jim Knox, with interests in the Riverine city of Griffith, picked up the Grafton Hotel in a deal handled by HTL Property’s Xavier Plunkett.
Plunkett acted for the Dougherty family, prominent members of the Northern Rivers business community and who have owned and operated both Westlawn Insurance and Westlawn Finance for the past 50 years, managing in excess of $200 million in investor funds.
They cited favourable cyclical market conditions as part of their decision to sell, and the opportunity to pursue other existing investment opportunities.
Pub tsar Hemmes furthered his acquisitive streak with this week’s acquisition of the Cheeky Monkeys Bar and Restaurant in thriving Byron Bay, adding to the sector’s fizzing transactional run that has extended through to regional locations.
The Grafton Hotel recently underwent $1 million in renovations and is producing about $55,000 in weekly revenues, circa $40,000 per week of which comes from the highly profitable bar and gaming revenue departments.
Plunkett said that whilst interest throughout the campaign cited there was some upside presented by the asset through operational improvements, there was also very little money to spend from a capex investment perspective.
The hotel is in a prime CBD location with high levels of pedestrian traffic and proximity to ample car parking, and offers a cost-effective single bar operation and sound underlying revenue base from high-margin profit centres and significant gaming entitlement holding.
The sale of the Grafton Hotel represents the record price for a hotel sale in the Clarence Valley LGA in the past 12 months, ahead of the Good Intent Hotel sale also handled by HTL Property in late 2020.
“We are delighted to have achieved such a strong result for our respective families, and are equally excited to see Jim have every success in the venue,” Jim Dougherty said.
HTL Property’s Andrew Joliffe said the transaction is a “patent vote of confidence in both the very fertile Northern Rivers economy, and the regional hotel market generally as it avails itself to investors seeking different capital preservation and equity return profiles”.
“Regional visitation, and therefore, arguably, revenue activation, is more prolific today than ever before in both traditional and accommodation based hospitality offerings; and we remain public advocates for this trend to continue for a number of cycles.”
HTL has now sold over $105 million of coastal northern NSW hotels across 10 deals in the past 18 months.