Tennyson Hotel
Padstow Park Hotel
Allawah Hotel
Location
Mascot, Sydney
Padstow, Sydney
Allawah, Sydney
Sale Price
$37 million
$26 million
$33 million
Net Investor IRR
55% p.a.
32% p.a.
16% p.a.
Period
2015-2016
2015-2018
2017-2019
Tennyson Hotel
Location
Mascot, Sydney
Sale Price
$37 million
Net Investor IRR
55% p.a.
Period
2015-2016
Padstow Park Hotel
Location
Padstow, Sydney
Sale Price
$26 million
Net Investor IRR
32% p.a.
Period
2015-2018
Allawah Hotel
Location
Allawah, Sydney
Sale Price
$33 million
Net Investor IRR
16% p.a.
Period
2017-2019
Investment Rationale
Location:
- RW Capital was attracted to the hospitality sector as assets were often situated within walking distance to train stations and had vacant land which presented development opportunities
- Acquisition: All three assets had a primary focus on entertainment and were acquired on 9-10.5% passing yields against a backdrop of yield compression
- Strategy: RW Capital’s strategy centred on enhancing net income through implementing new management, refurbishment and capital expenditure to create new gaming rooms
- Result: The venues saw net incomes rise by 23-25% as a result of RW Capital’s strategy. The increase in net incomes along with capital improvements allowed the properties to benefit from yield compression upon sale generating the attractive IRR’s noted above