Realising Value

Padstow Park Hotel

Padstow, New South Wales

Acquisition Date 2014

Acquisition Price $13.7 million

Sale Price $26 million

Equity Investment $8 million

Investor IRR p.a 26%

Asset Class Hotel

Investment Strategy Acquire, Develop, Distribute, Sale

Project Highlights
  • Since acquisition in 2014, the Trust has earned an unrealized return of over 30% p.a

In conjunction with JDA Hotels, White & Partners acquired the Padstow Park Hotel and operating business with the potential to realise income growth by refurbishing the facilities. White & Partners also recognised an opportunity to potentially transform an under-utilised land holding of 1,200sqm into a residential development. White & Partners capitalised on the limited number of gaming hotels to acquire the Hotel for $13.7 million reflecting a 10% yield on passing income.

Despite its dated appearance, lack of capital investment and strong local competition, White & Partners recognised that the Padstow Hotel benefited from being located opposite the railway station and within close proximity to the town centre. A train ride to the Sydney CBD takes 30 minutes.

After seven months of implementing new management and without any works, JDA Hotels improved net income by 23% from $1.3 million to an EBITDA of $1.6 million.

White & Partners achieved Development Approval in July 2015. The subsequent works comprehensively refurbished the Hotel including a new bistro, sports bar and gaming room. The refurbishment works were completed by October 2016 and successfully reposition the Hotel offering appealing to a wider clientele.

The Hotel was revalued at $22.5 million in March 2017, representing an appreciation of 64% in 24 months. White & Partner sold the Padstow Park Hotel in March 2018 for $26 million at auction, achieving a sale price 15.6% premium to valuation. Investors received a net equity multiple of 1.95x and an IRR of 25.4% over a 38 month term.