NLG boosts portfolio to the tune of $35 million
National Leisure & Gaming (NLG) has splashed out $35 million to boost its hotel portfolio in New South Wales and Queensland to 12. The company has acquired the leasehold businesses of the Brewhouse portfolio of three suburban hotels in Sydney, as well as the Courthouse Hotel in Cairns and the Gladstone Reef Hotel Motel in Gladstone, Queensland.
The $26.5 million acquisition of the Brewhouse portfolio marks NLG’s first foray into the New South Wales market. The portfolio comprises the Lalor Park Hotel, the Doonside Hotel and the St George Hotel in Belmore, and is being sold by the private equity arm of Ashe Morgan Winthrop and the Colosimo family.
NLG Managing Director Noel Phillips said the Brewhouse hotels provide the company with a significant foothold in Sydney’s western suburbs and immediate scale in the market.
“Each of the Brewhouse hotels are themed, well laid out and have recently been extensively renovated both internally and externally,” Mr Phillips said.
Each of the hotels incorporates bottleshop outlets.
The leasehold business of the Brewhouse portfolio is being bought on a 35 year term, including options. The deal was brokered by John Musca of Jones Lang LaSalle Hotels.
The two level Lalor Park Hotel has recently undergone a $2.5 million renovation.
“The Lalor Park Hotel is in an established suburb and has a 24-hour hotel licence,” Mr Phillips said.
“We believe it has healthy growth potential as Lalor Park enjoys ongoing population growth.”
Mr Phillips said the Doonside property has also been revitalised with a recent $1 million refurbishment. In addition, a new gaming room has recently been built in the St George Hotel.
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In Queensland, NLG has acquired a 55 year leasehold, including options, in Cairns’ Courthouse Hotel. The acquisition price was $5.45 million and is due to settle in the December 2006 quarter.
Mr Phillips said the Courthouse Hotel was a landmark complex in Cairns CBD and provided the company with a strong foothold for further expansion in far north Queensland.
“Entering the Cairns market is part of NLG’s ongoing strategy to buy well-located hotels in regions where there is healthy and diversified economic growth,” Mr Phillips said.
The leasehold business was sold by Dockside Investments in a deal negotiated by hotel broker Brent Mulligan of Centennial Partners. The freehold of the Courthouse Hotel is owned by ING Real Estate Entertainment Fund.
Originally completed in 1921, the building was converted into a hotel six years ago.
“It is a beautiful, historic building that has strong local and tourist appeal,” Mr Phillips said.
Finally, NLG’s third acquisition is the 50 year leasehold of the Gladstone Reef Hotel Motel, including options, in the burgeoning Queensland regional city of Gladstone. The acquisition of the lease carries a nil ingoing premium with NLG contracted to spend $2.5 million to renovate and refurbish the venue within the first 18 months.
Mr Phillips said the acquisition, which recently settled, represents a strategic opportunity to enter the Gladstone market and focus on immediately enhancing and repositioning the complex.
“NLG seeks acquisitions where our specialist management can add value to the complex’s gaming performance and on-premise operations,” Mr Phillips said.
The property currently comprises a public bar with 10 gaming machines, nightclub, function room, 40-seat restaurant, private bar and drive-through bottle shop. The motel, located at the rear of the property, incorporates 48 rooms located over three levels, a reception and manager’s residence.