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Boundary Hotel in East Bentleigh Source: Boundary Hotel
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  • The owner of Australia’s largest portfolio of freehold pubs, ALE Property Group, (LEP) has offloaded $73 million worth of “non-core” property
  • The sales account for a total of $72.86 million with a weighted-average yield of 4.4 per cent and a 24.2 per cent weighs average yield in premium to book value
  • ALE managing director Guy Ferrands said the six pubs were identified as non-core holdings following the receipt of the rental determinations late last year
  • Net proceeds of the sales are estimated at $71 million and will initially be used to reduce net debt
  • ALE Property Group shares are down 0.44 per cent to sit at $4.53 at the conclusion of the trading day

The owner of Australia’s largest portfolio of freehold pubs, ALE Property Group (LEP) has offloaded $73 million worth of “non-core” property.

Among the sales was the Boundary Hotel in East Bentleigh, Victoria which sold for $33 million and another VIC property, Morwell Hotel for $3.06 million.

ALE’s four remaining properties were all located in Queensland, with Kedron Park Hotel ($4.6 million), Edinburgh Castle Hotel ($7.5 million), Noosa Reef Hotel ($13.9 million) and Pelican Waters Inn ($10.8 million) going under the hammer.

The sales account for a total of $72.86 million with a weighted-average yield of 4.4 per cent and a 24.2 per cent weighs average yield in premium to book value.

ALE managing director Guy Ferrands said the six pubs were identified as non-core holdings following the receipt of the rental determinations late last year.

“They are all leased to ALH, Australia’s largest hotel operator, on long-term triple-net leases with annual CPI reviews and renewal options,” he explained.

“It has been some time since ALE has sold a property subject to this lease and we are pleased with how the market has received these assets.”

Net proceeds of the sales are estimated at $71 million and will initially be used to reduce net debt.

On settlement, ALE’s gearing is expected to decrease to approximately 35 per cent. ALE is currently viewings the value of its portfolio in preparation for its FY21 accounts.

The market for hotels and pubs is red hot at the moment. After recent transactions from Hotel Property Investments, pub broker HTL said the national hotel transaction volumes for the current financial year will now exceed the $1.3 billion record high of FY 2019.

ALE Property Group shares are down 0.44 per cent to sit at $4.53 at the conclusion of the trading day.

LEP by the numbers
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