Sunday, July 24, 2016
Jamie's Italian, Cargo Bar up for grabs as Keystone assets hit market
Carolyn Cummins July 25 2016 - 5:44AM Carolyn Cummins The receivers and managers to food and beverage group Keystone Group have kicked off the long-awaited sale of 17 well-known venues, including the Cargo Bar and the national Jamie's Italian chain, as they try to recoup more than $80 million to repay debt. The agents at CBRE Hotels Daniel Dragicevich, Sam Handy, Tim Grossmann and Leif Olson, are steering the campaign for the leaseholds of a variety of pubs and food and beverage outlets across the country. Food and beverage group Keystone are selling their waterfront icon Cargo Bar at Kings Street Wharf, Sydney. Food and beverage group Keystone are selling their waterfront icon Cargo Bar at Kings Street Wharf, Sydney. Food and beverage group Keystone are selling their waterfront icon Cargo Bar at Kings Street Wharf, Sydney. Where have all the good times gone? As the famous Cargo Bar goes up for sale, we look back at the unlucky Sydney venues which haven't survived. Keystone went under last month when it failed to renegotiate an $80 million loan with financiers, the private equity group KKR and Olympus Capital. The assets include Bungalow 8, Cargo Bar, Chophouse Perth, Chophouse Sydney, Gazebo, Kingsleys Brisbane, Kingsleys Woolloomooloo, Manly Wine, the Sugarmill Hotel, The Rook, the Winery and the national Jamie's Italian franchise. Morgan Kelly, from the receivers Ferrier Hodgson, said the sales process would be conducted as either a recapitalisation of the group, or a sale of one or more portfolios of assets. The Jamie's Italian will be sold as a group. The Jamie's Italian will be sold as a group. He said the expression of interest process has fielded interest from more than 120 parties. This interest has ranged from parties looking at a group-level investment through to those interested in groups of properties and individual properties. "A group-level investment offers the synergies of an existing head office function including marketing, payroll and purchasing, and represents a rare opportunity to acquire immediate size and scale to a portfolio," Mr Kelly said. National director at CBRE Daniel Dragicevich said the Keystone portfolio consisted of some of the most well-known and highly regarded venues and brands across the country. "We expect significant interest from all sectors of the hospitality market, both nationally and abroad," Mr Dragicevich said. The Colombian Hotel is being sold as the owner, the McHugh family, has relocated overseas The Colombian Hotel is being sold as the owner, the McHugh family, has relocated overseas Photo: supplied "Whilst the 17 venues will no doubt attract interest from portfolio buyers, it's expected that there will be intense competition from parties seeking to acquire segments of the portfolio and individual piecemeal businesses." Mr Kelly said he was conducting a focussed sale strategy, specifically targeting buyers with the balance sheet strength and operational depth to be able to manage these acquisitions. "The Jamie's Italian franchise restaurants would remain grouped together and sold as a nationally integrated restaurant brand," Mr Kelly said. Pubs are hot tickets for traditional operators, who see the demand rising for places that offer a wider range of food and beverages, not just beer and burgers. The lock-out laws in the City and fringe areas have also seen a change in the venue offerings from late-night drinkers to people coming in for a higher-quality meal in a more family-oriented atmosphere. One asset being sold is the The Colombian Hotel, a three-level former Westpac Bank building, on the corner of Oxford and Crown Streets in Darlinghurst, through Andrew Jolliffe and Joel Fisher of Ray White Hotels Australia in conjunction with Gerry Quinlan of Manenti Quinlan & Associates. The hotel has been operated for over a decade by the private McHugh family. Mr Jolliffe said the timing of the sale comes at a "transformative period" for the eastern suburbs and CBD commercial property market, which has seen new and improved hotel offerings attract a more sophisticated and discerning clientele to the area. This includes the revamp of a number of Oxford Street venues including Justin Hemmes' The Paddington, Kaine Bayfield's Light Brigade Hotel and the soon to re-open Paddington Inn, by Bruce Solomon and Matt Moran. Mr Jolliffe, the Asia Pacific director of Ray White, said the vendor was selling due to relocating overseas. There is now access to well-priced debt, and a demand for A-grade hotel properties not matched by supply, which is attracting buyers for pubs," Mr Jolliffe said. "We have seen a resurgence in commercial property values in Oxford Street after a period of suppression given development in other areas, however what is clear to astute investors is that the various infrastructure investment strategies being deployed at both state and federal level will have a significant impact on the value of commercial property in the Oxford Street precinct", Mr Quinlan said.