Woolworths’ hotels arm is selling more than $600 million worth of liquor stores and pubs in a deal that will see it lease them back for the next 20 years.
ALH Group, which is 75 per cent owned by Woolworths, will sell 54 sites, including a number of pubs and 46 Dan Murphy’s or BWS stores, to property giant Charter Hall.
Chief executive Grant O’Brien said the company preferred to lease, rather than own, its sites.
“This is one of the largest hotel portfolio sales in Australia’s history,” he said.
“They are strong performing hotels spread across Australia and include iconic hotels such as the Norwood Hotel in South Australia, the Croxton Park Hotel and Manhattan Hotel in Victoria, the Villa Noosa Hotel and Parkwood Tavern in Queensland, the Hyde Park Hotel in Western Australia.
“The transaction is consistent with Woolworths’ strategic priority to act on our portfolio to maximise shareholder value.”
The deal will see ALH receive $603 million, with Woolworths agreeing to lease the sites back for the next two decades.
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Woolworths indicated it may use the proceeds of the sale to pay down debt.
Charter Hall said the properties were high quality assets with strong rental incomes.
Following expected completion of the transaction in October 2014, the ALH Group would retain ongoing operational control of the hotels and liquor stores.
The ALH Group is 75% owned by Woolworths and 25% by the Bruce Mathieson Hotel Group and operates 329 venues and 545 retail liquor outlets across Australia.
