A surge of interest in regional hospitality real estate by metropolitan-based investors has helped boost the sale of two Armidale pubs in the past week.
First, the Whitebull Hotel sold for the record price of $13.25 million, and now it has been announced The Royal Hotel has been sold for more than $5 million.
The off-market sale was managed by HTL Property, who said the vendors were a syndicate of local businessmen with diverse corporate backgrounds including accounting and construction.
The buyer is the Roche Group which holds significant pub, hospitality, and accommodation assets in both the Hunter Valley and Mid-North Coast regions, including the Mercure Hotel and Harrigan's Irish Tavern at Pokolbin, as well as the Hunter Valley Gardens.
The Roche family also has a rural aggregation at the nearby Jeogla and Wallamumbi stations.
HTL Property is a national operator specialising in the hotel industry.
Managing director Andrew Jolliffe said they had transacted on more than $40 million worth of hotel assets in the New England region in the past month, with more sales to be announced in the coming weeks.
"I think the domestic market has looked a bit inwards because borders have been closed, and people have been travelling to regional areas for recreation and reconnected with these areas," Mr Jolliffe said.
"It's given them some confidence to turn those recreational thoughts into commercial investment thoughts."
There had been an 'extraordinary increase' in the number of metro-based investors prepared to invest regionally, according to Mr Jolliffe.
"We've always had a handful, but now we've got substantially more," he said. "We think the paths that have been well worn over this past 18 months will retain interest regionally in pubs and accommodation being attractive investment assets for capital that's domiciled in metro areas."
The Roche family will retain all of the current management and staff and say it will be 'very much business as usual' at the Royal.
"There are no immediate plans for major changes to the business," said Roche Group executive chairman Dominic Roche.
"However, we will look to improve the overall hotel offering with a more food and beverage focused operation, and some management synergies and operational expertise coming from our group's wider hospitality operations."
Mr Joliffe said other factors as well as 'highly desirable yields' in regional areas were driving sales.
"Increased regional migration, regional infrastructure spending, a lower susceptibility to COVID-19 related lockdown measures; and a robust agriculture-led rural economy are all major drivers of positive sentiment in the regional hotel space," he said.