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Vegas Hotel to test hot pub market

The Vegas Hotel in Potts Point has previously ranked as the state’s No.1 gaming hotel and is now on the market.One of the city’s top 100 gaming pubs, the Vegas Hotel in Potts Point is being offered for sale, delivering what is expected to be one of Sydney’s most highly anticipated pub sales of the year.
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The sale will capitalise on the current bullish conditions that have seen 13 top Sydney gaming pubs transact in the last six months at an average yield of 8.5 per cent, according to Sam Handy and Daniel Dragicevich of CBRE Hotels, which has been exclusively appointed to steer the campaign.

In the past year there has been as much as $800 million worth of pubs change hands as the investors, who bought in when the sector was depressed, are now selling to traditional food and pub operators.

Geoff Redmond, hotelier and developer, is the current owner of the Vegas Hotel.

Listed Lantern Group has sold about 16 pubs, while businessmen Geoff Dixon and John Singleton are selling some assets from their n Pub Fund.

The Vegas Hotel has previously ranked as the state’s No.1 gaming hotel on the OLGR gaming rankings list with only eight other hotels in the state ever having reached this position.

CBRE director Sam Handy said the Vegas Hotel’s gaming room currently generates an average of $1,179,899 turnover per week and “presents a low energy, single-service point turnkey operation delivering an incredible cash flow”.

“It is well positioned to be elevated into a top 50 gaming pub given its core trading attributes and the locational gaming demand drivers within the precinct, which include Kings Cross train station, the Kings Cross Centre and a new state-of-the-art Woolworths literally across the road.”

It is within the changing retail precinct of Potts Point and near the station and the new Omnia residential development, which will see the construction of 135 apartments across 19 storeys and a new Woolworths supermarket.

The Omnia development is on the old Crest Hotel and Mercure Potts Point site, which was acquired by Sam Arnaout’s Iris Capital for $65 million in 2012 and traded three years later for a reported $150 million to Chinese developer Greenland Group.

Iris Capital are currently considered to be in the process of amalgamating another site within the precinct having recently acquired the Bourbon Hotel, Swans Club, Deluxe Backpacker Hostel and Empire Hotel.

CBRE’s agents said over and above the gaming opportunity, the Vegas Hotel site offers future mixed-use redevelopment potential underpinned by its B2 local centre zoning, 22-metre building height approval, attractive 3:1 FSR ratio and the fact there are currently three under-utilised floor plates above the ground floor hotel operation.

These development metrics provide scope to add a further three to four storeys above the existing building envelope and there is additional airspace to be realised with surrounding buildings recently approved at between 55 and 60 metres.

CBRE national director Daniel Dragicevich said the hotel currently has three under-utilised floor plates above the ground floor hotel operation.

“The existing 22-metre height approval confirms that there is opportunity to add a further three floors above the existing building envelope, which provides scope for a six-storey residential or accommodation development whilst leaving the ground floor of the hotel in place,” Mr Dragicevich said.

“Two recent and successful examples of hotels being converted into residential developments was Toga Groups redevelopment of the Mansions Hotel and Hampton Court Hotel in Potts Point. The Hampton Court Hotel was acquired for an estimated $30 million and redeveloped as a residential conversion comprising 121 apartments across eight storeys.”

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