Manly's Hotel Steyne sells for $65m

Australian Financial Review
by Larry Schlesinger
6 May 2019

Sydney property tycoon Sam Arnaout's Iris Capital has bought Manly's Hotel Steyne for about $65 million making it his fifth pub acquisition in the space of nine months.

In a veritable changing of the pub ownership guard, 43-year-old Mr Arnaout acquired the historic waterfront pub from industry veterans John Singleton, Arthur Laundy, Robert Whyte and investment banker Mark Carnegie.

The 160-year-old hospitality venue at 75 The Corso opposite Manly Beach was put up for sale in February as the high-powered investment partners sought to sell out at the top of the market.

Hotel Steyne last changed hands for $27 million in 2010 when Singo & Co bought it from Sydney bookmaker Bruce McHugh and his family.

Since then, millions have been poured into refurbishing the three-level hotel on almost 2000 square metres, including adding upmarket venues like The Glasshouse with its Gin & Tonic Bar.

The corner venue was originally built in 1859, and then remodelled by brewer Tooth & Co in 1936.

The sale to Iris Capital gave the Sydney development and investment company its 21st venue, standing alongside inner city pubs like the Colombian Hotel and Gaslight Inn.

Mr Arnaout, who is also developing $700 million East End project in the centre of Newcastle, called the Hotel Steyne Australia's "leading hotel property".

“This positions our company, Iris Capital, as a genuine hospitality leader in this part of the world, and complements our macro coastal investment strategy," he said.

The acquisition of the Hotel Steyne follows Iris Capital buying the Shaft Tavern in Newcastle for about $12 million in November and his September swoop on three regional pubs, the Sydney Junction Hotel in Hamilton, the Gunyah Hotel in Belmont and the Argenton Hotel in Glendale last September purchased for about $30 million.

Hotel Steyne was marketed and sold by Andrew Jolliffe and Dan Dragicevich of pub and hotel specialist HTL Property.

Mr Jolliffe said that on the back of "already strong and strengthening business fundamentals, the pub sector was a well capitalised, represented and operated asset class that remains outweighted by demand when considering transactionable supply".

“When considering the sale of the Hotel Steyne in the context of our recent key transactions concluded in multiple states nationally this year, it remains our considered view that market strength and depth are not only positive, but also currently serve to embolden an already robust asset class," said Mr Dragicevich.