Widely regarded as Australia’s largest hotel, JLL Hotels & Hospitality Group is bringing the famed Oaks, Neutral Bay to market for the first time ever through Expressions of Interest. The national icon is gifted by private owners of 50 years – the Thomas family – with patriarch David ‘Taffy’ Thomas ready to pass custody of this remarkable asset to the next generation owner.
Family ownership of the hotel began in 1975 when David acquired the leasehold interest in the hotel, with support from his mother Alala, of Tooth & Co. They lovingly and meticulously expanded and developed the benchmark for nearly 50 years of family business. Idolized for the famous beer garden and 80-year-old English oak, the venue is now one of the country’s largest multi-faceted hotels. The hotel remains the drinking establishment of choice for many famous personalities and sports stars and is home to the John Meillon OBE bar, named after the famous actor.
The Oaks also resides on a substantial 2,188m² site with ideal mixed-use B4 zoning and favorable planning guidelines allowing development up to 5 storeys (STCA), highlighting the significant value-added potential of the asset. The venue includes Taffy’s Sports Bar, Alala’s Cocktail Bar, Bar & Grill Restaurant, the famous large beer garden, a games room with 30 poker machines, extensive first floor reception areas and a bottle store top of the line.
JLL managing director John Musca suggested“As in all real estate industries, prime assets are often only brought to market once in a lifetime, which is even more prevalent in the highly protected hospitality industry where assets of this magnitude and this quality will simply never be endorsed or replicated again in Sydney’s high-end demographic locations – we’re basically talking about one of the best asset class hotels”.
Unlike other asset classes which have seen the cost of debt dampen market momentum, the hotel market has continued unabated with nearly $2 billion in capital flowing into the sector over the past 12 months and trade rebounded strongly from the initial challenges of COVID-19. Scaled flight is increasingly competitive from institutional and private owners across the country, with liquidity levels at all-time highs. This has been the catalyst for the biggest exodus of generational hotel owners in nearly 3 decades, with over 50% of the last 20 deals in the Sydney metro area representing generational owners leaving the industry. With the lack of succession options, the increasing growth of large hotel groups and the scarcity of supply of quality assets, individual private family operators are slowly retreating across the country.
More recently, the asset class has seen an escalation in participation from family offices and non-traditional investors nationwide, usually with the backing of experienced pub operators. The Smorgan family’s recent acquisition of the Continental Hotel in Sorrento, the Fairfax family’s Sydney pub portfolio and the recent purchase of the Great Northern Hotel Byron Bay by Johns Lyng (ASX:JLG) Group CEO Scott Didier are all examples.
“For those who have amassed wealth in mining, media, software, logistics or any other sector, once you have finalized a business case, owning an iconic pub hotel is actually much more rewarding and exciting than any other form of investment”, suggested Mr. Musca.
JLL Senior Vice President Ben McDonald offered, “It’s hard to imagine a hotel in the country evoking as much emotion, brand heritage and rites of passage as the illustrious Oaks Hotel. It will be a remarkably fulfilling asset for the happy owners of the next generation.”
With strong cash flow and valuable underlying land ownership, category-leading Oaks is expected to generate interest of more than $175 million, with the sale expected to be the largest hotel sale ever in the category. national advertising assets.
Family representative Andrew Thomas said: ‘After a series of unsolicited approaches, it seems the time has come for the family to move on and we will leave the Oaks with fond memories and many friends. … It holds a very special place in the Australian hospitality landscape, and we can’t wait to see its next incarnation under the new custodians.
The family will remain a committed industry stakeholder with their continued ownership of the Winston Hills Hotel and Gateway Hotel.
Expressions of Interest will close at 4:00 p.m. AEST on Tuesday, September 6, 2022.
To request a copy of the Information Memorandum, please contact one of JLL Hotels & Hospitality Group Managing Director John Musca and JLL Senior Vice President Ben McDonald via the contact details below.