In March 2017, White & Partners acquired the GGH at a yield of 10.3%, significantly below comparable market prices. The discounted price reflected the discrepancy between the hotel’s licensed trading hours (3am) and the Council’s approved trading hours (midnight).
Following acquisition, White & Partners focused on aligning the license and approved trading hours to 3am. White & Partners achieved this by engaging appropriate acoustic and town planning consultants, to emphasis to Council that the discrepancy was merely an administration error from the previous owners.
No objections were lodged to the application, which was approved in a short period of 6 weeks.
On acquisition of the Hotel, the valuer rightfully discounted the hotel’s weekly revenue to account for the trading hour discrepancy which resulted in an acquisition yield of 10%. With the operating hours now aligned, the hotel should revert to market yields, representing an unrealised arbitrage of circa $3.5 million in value. Investors have also benefited from an unrealised capital appreciation.
At the same time, White & Partners has finalised:
The open plan design will also be styled to embrace the inner western Sydney vibe, which appeals to a diverse group of patrons and allows the hotel to capitalise on its excellent location.
