Sydney Morning Herald (NSW Metropolitan, 2 March 2006)
ALE Property Group's solid interim result is a reflection of the growth
in the pub market - and it's not all from merely selling beers to
customers on a hot day.
Revenue from poker machines and entertainment such as trivia nights has
increased dramatically, making pubs lucrative.
The recent sale of Fitzgibbons Hotels in Brisbane for almost $65 million
has started what is forecast to be another strong year of pub sales in
ALE managing director Andrew Wilkinson said his group's good result was
attributable to a number of factors, including higher than expected CPI
revenue growth and tight cost management.
"Looking ahead, it is clearly a vendors' market, and patience and
discipline are required in identifying acquisitions," Mr Wilkinson said.
Jones Lang LaSalle Hotels research shows pub yields continue to hover at
or above 10 per cent in an environment typified by new investors and
"Much of the interest, often speculative, focuses on large investors such
as Woolworths, Coles or the Taverner Group and the
competitive nature of their deals," said Tony Bargwanna, senior vice
president of Jones Lang LaSalle Hotels.
"Interest continues to be driven by buoyant trading conditions,
competition in the retail liquor industry and growth in gaming."
Woolworths received a major boost when it formed a joint venture with
Bruce Mathieson of ALH to acquire more assets.
"More recently Woolworths [Bruandwo Pty Ltd] acquired the $380 million
Taverner Hotel Group - expanding … [its] portfolio by 33 pubs and
in the process achieving a 10-per-cent-plus yield," Mr Bargwanna said.
Coles had concentrated more on acquiring leasehold interests.|