An Orange hotel has set a new record sale price for pubs in regional NSW only two weeks after the Robin Hood Hotel set the record at $19 million.
The Royal Hotel, on the corner of Lords Place and Summer Street, was this week bought for $24 million, a figure suggested by industry insiders.
Pub Brokers & Advisory sold the the Royal as part of a five-hotel portfolio believed to be worth around $75 million belonging to MPK to a newly-formed syndicate known as Investment Management Group.
The other pubs in the sale were The Dudley Hotel (Bathurst), The Castlereagh Hotel (Dubbo), The Federal Hotel (Wellington) and The Federal Hotel (Mudgee).
Pub Brokers & Advisory managing director Nick Butler, a former Union Bank general manager in Orange, was retained to find a buyer for all five hotels via an off-market campaign.
Mr Butler said he met with the owners from MPK in November to start the process and each of the five hotels set a record sale price in their town.
MPK bought the freshly-painted hotel in October 2019 and undertook an interior refurbishment last year.
Sale information indicated the hotel earns $190,000 revenue per week across the bar, food, bottles, accommodation and gaming.
It came with 25 poker machine entitlements and DA approval for a location that would enable smoking in a poker machine area, which he said the new owners plan to do: "[Poker machines] do better for the business when there's a smoking solution."
Mr Butler said the hotel's accommodation, which includes 26 recently-renovated rooms with a mix of ensuited and shared facilities delivered a passive income stream making it the easiest to sell.
"Staff were only informed of the sale after contracts were exchanged," he said.
"They are going to keep all the staff."
Mr Butler said all the hotels had strong maintainable earnings with 110 poker machine entitlements, and Dubbo also had robust accommodation numbers.
MPK Hotels, led by hoteliers Nick McKechnie and Nelson Kelly, had built an impressive portfolio over a decade of clever acquisition and asset improvement but they wanted to sell to spend more time with their wives and children.
"We have no doubt that the key to this sale was keeping it quiet to allow all of us to work through the challenges of selling five pubs at the same time," Mr McKechnie said.
The purchase was the first major hospitality acquisition for Canberra-based Investment Management Group Hotels.
IMG CEO Matthew Clowry said MPK did an impressive job of growing the portfolio of hotels.
"Our intention is to leverage these foundations to extend and evolve the hospitality experience for the people of Orange, Bathurst, Wellington, Mudgee and Dubbo," Mr Clowry said.
The MPK team is left with two leasehold hotels, including the Western Star Hotel in Dubbo which is also for sale on a re-stapled, freehold going concern basis.
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