Justin Hemmes, Sydney’s most prominent hotel owner, suggested that he might be interested in buying the Oaks Hotel in Neutral Bay, during an inspection of the premises on Friday.
Mr Hemmes’ private Merivale group specialises in refurbishing traditional pubs in a faux French style, an approach that has been hugely popular in Sydney’s eastern suburbs but has not been tried on the more conservative lower north shore.
“Well it is for sale,” Mr Hemmes said, when asked the reason for his visit. “It’s a beautiful place.”
Justin Hemmes and Oaks Hotel owner Andrew Thomas on Friday. Louie Douvis
One of the city’s best-known pubs north of the Harbour Bridge, the Oaks has been owned by the Thomas family since 1975, when brewer Tooth & Co sold the lease for $250,000. The price has been speculated at about $175 million, which could set a national record.
The pub, on Military Road, is named for an 80-year-old English oak tree covered in fairy lights located in its large courtyard. John Musca and Ben McDonald of JLL are managing the sale.
Mr Hemmes spent time chatting with co-owner Andrew Thomas in the pub’s dining room. Asked what he thought of the reported sale price, he said: “I haven’t seen the price.”
Another of Sydney’s well-known pub-owning families, the Laundys, said they would not bid.
Craig Laundy, a former federal MP, said there was too much “downside risk” because the hotel is tightly managed by the Thomas family, which is harder for a large pub group to do.
“They are extremely good operators and very tough to follow,” Mr Laundy said. “They are extremely hands on.”
Pubs are hot investments now. The Crossroads Hotel at Casula in Sydney’s south-west set a record when it sold for $160 million to former Sydney mayor Nelson Meers this year. Rich Lister Sam Arnaout recently paid close to $80 million for the Strathfield Hotel.
Hotel operator Australian Venue Co, backed by private equity giant KKR, paid about $100 million for the leasehold interests in eight Melbourne venues, including the famed Esplanade Hotel in St Kilda. In NSW, fund manager Harvest Hotels paid a regional record of $51 million this week for the Windsor Castle Hotel in Maitland.
The Oaks is best known for its beer garden. 
Generating about $23 million in annual revenue, the Oaks has multiple bars, including Taffy’s Sports Bar, the Bar & Grill restaurant, a gaming room with 30 poker machines, extensive first-floor function spaces and a high-end retail bottle shop. There is the potential for a five-storey development.
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