The Freehold Interest in the Village Belle has been sold, culminating in an astonishing year of pub transactions across Victoria. The sale price of $31 million, representing a yield of circa 4.65%, proves yet again the rampant appetite shown by investors for securely leased hotel assets. The property was offered exclusively for sale by JLL’s Will Connolly, Stuart Taylor, Tom Noonan and MingXuan Li, via an international Expressions of Interest campaign.
Will Connolly, Vice President, JLL Hotels, commented “As expected, the Village Belle proved to be one of the most hotly contested offerings for 2021, not just within the hotel investment space, but also the retail sector. All corners of the market identified the obvious esteem of the property, being one of Melbourne’s most spectacularly presented venues after its extensive $15 million+ renovation and restoration in late 2017. Just as importantly though, the property was underpinned by the security of a ‘blue chip’ covenant, with investors inheriting one of Australia’s largest hospitality operators in Australian Venue Co”.
The property was successfully acquired by prolific pub owner Mazen Tabet, amidst a furiously competitive EOI process, commenting “the Village Belle certainly compliments our current portfolio, with it’s excellent presentation and strength of tenancy”. The Village Belle will now be added to Mr Tabet’s already iconic portfolio which already includes the Mornington Peninsula’s renowned Portsea Hotel.
Situated in the heart of St Kilda’s famous retail & dining precinct, the Village Belle took the market by storm, occupying a large 1,308sqm corner site with favourable Commercial 1 Zoning, whilst providing investors with a net annual income of circa $1.45 million, attractive annual rental growth, along with the added security of a 10-year initial term, and four further 10-year options. The offering also included an adjoining apartment complex located at the rear of the hotel, comprising 12 near-new, separately leased, residential apartments, built in 2017 as part of the redevelopment.
Taken to market amidst an unprecedented surge of Victorian hotel investment transactions in 2021, the Village Belle added to the list of coveted freehold gaming hotel sales, with JLL completing an astonishing five of 2021’s six major Victorian transactions:
Property | Price | Yield | Tenant |
Boundary Hotel, East Bentleigh | $33m | 4.23% | ALH/Endeavour |
Edwardes Lake Hotel, Reservoir | $28m | 5.00% | Private Operator |
Tudor Inn, Cheltenham | $15.66m | 3.79% | ALH / Endeavour |
The Brook, Point Cook | $24.33m | 5.50% | Melbourne Racing Club |
Boronia Hotel, Boronia | $24m | 5.00% | Private Operator |
The Village Belle Hotel, St Kilda | $31m | 4.65% | Australian Venue Co |
Reflecting on yet another successful sale campaign, Stuart Taylor, Senior Director, JLL Retail Investments, commented “Given our team received strong interest from a mix of local and offshore high-net-worth investors, it further highlights that private capital remains the most aggressive for metropolitan Melbourne assets, especially those which are considered to be ‘trophy’ retail property.”
“The transaction also reflects the ongoing focus for investors on tenant covenant, with the market responding extremely well to the long-term lease to Australian Venue Co. We’ve no doubt this level of interest for high-end assets of this nature will continue into 2022”, he concluded.
The sale of the Village Belle Hotel further highlights an incredible year of market dominance for JLL, with a total of $267.7 million worth of pub assets sold in 2021 for Victoria alone, and an incredible $1.2 billion of pub assets sold nationally. 2022 appears to be heading a similar path for the hotel market with JLL set to announce further on and off market transactions over the Christmas period and early in the new year.
