ALE's Royal Exchange sells for more than $14m

Landmark inner Brisbane hotel, The Royal Exchange in Toowong, has sold at auction for $14,050,000 on a yield of 4.01%, achieving a record yield for ALH investments and smashing its $12.5m reserve.

Lockdowns across Sydney and Melbourne did not deter investors from the Burgess Rawson auction today where 23 properties of the 28 were cleared to a combined value of $76.5m and on an average yield of 4.7 per cent.

The hotel was owned by ALE Property Group which last week reported having sold six properties in FY21, achieving 24.2 per cent above book value and a profit of $179.2 million for the year, up $159.2m from FY20.

The Royal Exchange sits on 2,453 sqm with multiple bars, beer garden, 40 gaming machines and parking. There is a busy on-site BWS with 3 further detached bottle shop licenses with net income of more than $560K per annum. It has been purchased by a Queensland based investor.

ALE also has listed Melbourne’s Tudor Inn Hotel for sale, taking advantage of the market appetite for strategic income producing assets.

ALE owns 78 pubs around the country, the majority of which are leased to the Endeavour Group.

At last week’s annual reporting presentation, ALE said, “Our tenant is keen to grow its business, both within existing outlets and by acquiring new outlets.”

ALE said it intends to work with Endeavour to realise this aspiration when it makes sense for ALE shareholders and that “ALE provides Endeavour with the potential for an alternative source of capital”.