Feros Hotel Group snap up Highfield Caringbah for around $15 million
The Feros Hotel Group has bought Highfield Caringbah, the modern bistro and sports bar, for around $15 million.
Feros Hotel Group, who also run The Terrey Hills Tavern and Potts Point Liquor, were the tenants of the premises at 32 Banksia Road in Sydney’s south.
Feros spent around $12 million in 2017 on major capital works and a fit-out.
The former workers' club, which homes Ugly Pizza, Huxley's, Public House and The Botanical, as well as a Sports TAB and gaming space, was offered with a double net lease with a net passing income of $589,104 + GST.
Spanning three levels, the building with 3,070 sqm of net lettable area on its 1,025 sqm land, has future development potential to add accomodation and an additional rooftop bar.
Ray White Commercial NSW – Sydney City Fringe agents Kristian Morris and Justin Rose secured the sale.
Morris said there was strong interest throughout the campaign and the final sale price represented a sub-four per cent yield.
“This was a well-executed campaign with 85 direct enquiries, 15 different groups inspecting the property and multiple parties interested close to the four per cent yield mark,” he said.
“Buyers saw the value in such a long lease (15-years plus options totalling up to 60 years with ratchet clause in favour of the lessor) and strong covenant.
“Hotel assets that are subject to such a long lease don't come up very often and this resulted in such a tight cap rate
Rose added that the property was an outstanding three-storey mixed-use hospitality asset with four separate but interconnecting dining experiences.
“It’s rare to have such a long and secure lease to a group that’s committed to the area, and it provided the right buyer with an investment seldom offered to the market,” he said.
“These freehold subject-to-lease (FSTL) opportunities are rarely available and it offered a stress-free and hassle-free annuity income stream, with the tenant paying 100 per cent of the outgoings and running costs.
“It’s close to the Caringbah Town shopping centre and major retailers such as Coles, Woolworths, McDonald's and is just 150* metres to Caringbah train station.”