Endeavour Group Enters Sydney Pub Market
Pub and pokie company Endeavour has entered the Sydney pub market. The newly ASX-listed company joined forces with property developers Charter Hall in a $40 million purchase of Terrey Hills Tavern.
Terrey Hills Tavern is primarily a comfortable lounge bar and bistro. In addition to those facilities, the venue has a sports bar, beer garden, and is a live music venue. It is located on Aumuna Road, Sydney, and sprawls over 1.6-hectares. Well-known hotelier Chris Feros owned and ran the pub for the past 16 years. The sale marks an impressive return for Feros, whose family purchased the property for $13.5 million.
The Endeavour Group demerged from Woolworths and listed on the ASX on June 24. Woolworths and pub baron Bruce Mathieson owns 14.6 percent of Endeavour; he was instrumental in this massive $40 million purchase.
The deal sees Endeavour take control of the pub’s 20 pokies, which it adds to the 12,000 gaming machines it already owns across 332 venues in Australia and New Zealand. Charter House controls the freehold.
“Endeavour Group is pleased to welcome the Terry Hills Tavern to the group and consider it a great fit with our portfolio, adding to both our hotel and retail networks.”
Endeavour is a Behemoth of a Company
Woolworths and Endeavour demerged as the latter listed on the ASX. Consequently, the move instantly made Endeavour Australia’s biggest drinks and pubs retailer, one worth around $10.8 billion. Chief executive Steve Donohue promised shareholders the company would expand its pubs portfolio. In short, Donohue followed through on that promise.
“We aspire to not only improve our existing hotels but perhaps add to our network in a really considered and disciplined sort of way. We feel confident in our ability to bring a number of new hotels into the fold.”
Charter Hall, with whom Endeavour partnered for this latest venture, bought into the pub sector in 2014. It made a huge splash after forking out $603 million for a portfolio of assets leased to the Woolworths-backed ALH Group.
The two companies faced stiff opposition for Terrey Hills Tavern, HTL Property director Dan Dragicevich said.
“It is broadly accepted within the asset class that AAA grade properties such as this are in scarce supply, hence the importance of ensuring both visibility and accessibility on a very public and national level was paramount to the outcome achieved.”
The Syndey pub scene is a hotbed of activity, with properties much sought-after. Close to $300 million of pub assets have changed hands in the past month alone.
Huge Companies Have Faith in the Newly Listed Entity
Endeavour Group made plenty of noise when it listed on the ASX. Some of the biggest companies in the world invested immediately, showing the faith they have in the “new” company.
Amazingly, the 20 biggest shareholders in the company hold a combined 63.9 percent of the total shares. HSBC Custody Nominees Limited holds 16.59 percent, with Woolworths (14.6 percent) and JP Morgan (11.01 percent) the other two companies in double figures.
Citicorp, and BNP Paribas are among the top five biggest shareholders.
Those investors have a wait ahead of them to see the Terry Hills Tavern adding revenue to the balance sheet. COVID-related restrictions forced the closure of the venue in late June. A notice on the pub’s Facebook page explained the situation.
“We are closed until further notice. Due to the current government-imposed lockdown Terrey Hills Tavern will be closed until further notice. Any money paid for school holiday activities will be refunded. Please stay safe during this period and we look forward to seeing you all again soon.”
Sydney has seen a surge in new positive COVID cases, thus prompting premier Gladys Berejiklian to impose stricter measures. The new measures affect greater Sydney until at least July 30. Berejiklian wants zero new cases before reducing lockdown measures.
