Former James Squire Brewhouse on King Street Wharf listed for sale

An iconic Sydney bar and microbrewery on King Street Wharf has been listed for lease transfer.

King Street Brewhouse, formerly known as James Squire Brewhouse, has been listed for lease transfer six years after the current owner leased the premises.

He says there has been international interest in the property ranging from restaurants, liquor retailers, local publicans, property investors and everything in between. Given the current interest in the sale he says it is hard to gauge a  price.

According to the information memorandum for the property strong historical tenancy demand in the area has average rents at between $1,500 to $2,000 gross per square metre in comparable premises.

Graeme Thompson, the vendor, has been running the pub independently of James Squire who abruptly left the business in 2010, taking its brewing license with it.

The 24-hour pub operates as a restaurant, bar and microbrewery. In the year ending December 2012 it made $3.6 million in profit, down from $4.3 million the year before.

In April 2013 a new brewing license was approved and the microbrewery has restarted operations as Red Tape Brewing. It reportedly earns a 92% profit on all self-brewed beer sold in the premises.

The license reportedly took some time to grant due as the ATO would not grant a new licence due to past tax debts relating to another venture in Melbourne which has ceased operations.

Graeme Thompson obtained the lease for $14 million, according to lease transfer documents. Though listing agent John Musca says the sale was complicated and may not represent its true value. It was last valued at $22 million in 2007.

The 1315 square metre site is on a 99-year lease from the Waterways Authority which was signed in 2000. All other land within the King Street Wharf precinct has head leases from the Waterways Authority to Brookfield Multiplex.

The pub, next to Bungalow8, Nicks Seafood and Grill, Malaya Restaurant, Cargo Bar, is one the largest tenancies available on King Street Wharf.

The premises have five areas all serviced by one U-shaped wraparound bar over two levels separated by few internal steps and there is an extensive beer garden.

The site has the potential to be licensed for 900 people.

The information memorandum for the listing says the only recent comparable sale was the Pier 26 venue nearby (now known as Helm Bar) which sold for $17.5 million at an initial yield of 9.8% and with a turnover of $87,970 per week at the time of sale. It was sold by Listed company Amalgamated Holdings to Sydney hotelier Peter Wadsworth.

The lease term at the time of sale was 80 years and the operating floor area an estimated 700m2.

Businesses in the area are known to pay in excess of $1.5 million per annum in rent.

The microbrewery has four 800 litre holding tanks with a capacity for production of 41,600 litres per annum.

It is reportedly being sold due to the “recent ill-health of the owners and their inability to manage the business, and more-so drive the business, coinciding with the vacation of James Squire, also had an understandable negative effect on revenues and earnings”.

It is being handled by Jones Lang LaSalle Hotels and Hospitality national director John Musca.

The site is right next to the multi-billion-dollar Baranagaroo development and is expected to receive a significant number from patronage from workers at site and later residents.