The Oaks Hotel has sold for $140m, well below its original asking price.
Sydney’s sprawling The Oaks Hotel, which was listed for sale four years ago with an eye-watering asking price of $175m, has finally sold to a well-known publican family.
Patrick and Angela Gallagher, who run a string of pubs in Sydney and further afield, including Jacksons on George in the CBD, have purchased the Military Road, Neutral Bay, pub replete with 30 pokies for about $140m through JLL Hotels agents John Musca and Ben McDonald.
Back in 2022, when The Oaks Hotel first hit the market, it attracted scores of high-profile prospective buyers, including billionaire Justin Hemmes. There were also rumours that British chef Rick Stein was keen, with a movie producer also in the frame. But negotiations at the time broke down over the asking price demanded by the vendors, David and Andrew Thomas.
Multi-billionaire pub baron Arthur Laundy, who owns more than 90 pubs and has just purchased radio station 2GB, applauded The Oaks sale.
“It’s an excellent hotel, It has been run very, very well,” he said.
“Pat Gallagher has been in the hotel trade a long time. He is second generation and has done very well.”
The vendors of The Oaks Neutral Bay, David and Andrew Thomas.
Mr Laundy said it was hard to comment on the $140m price paid, as “I don’t know what it takes or makes”.
“I am sure Pat Gallagher, who has been around long enough, would know a good deal when he sees one,” he said.
The Thomas family’s ownership of Oaks started in 1975 when Mr Thomas senior acquired the leasehold interest in the hotel and subsequently expanded it over the years.
The Oaks is positioned on a prominent 2188sq m site with favourable planning guidelines allowing for up to a five-storey development.
The venue includes Taffy’s Sports Bar, Alala’s Bar, Bar and Grill, a large beer garden, a gaming room with 30 pokies, extensive first-floor function spaces and a high-end retail bottle shop.
Thomas family scion Andrew Thomas said in a statement it was the right time for the family to move on and the Gallagher family were the right custodians to pass the baton to.
“The Oaks is one of a kind and has been an enormous part of our family history,” Mr Thomas junior said.
One of The Oaks Hotel’s bars.
Selling agent Mr Musca said, as in all real estate sectors, the premier assets were infrequently traded, and in a rapidly consolidating pub market, The Oaks stood out as the most coveted traditional hotel in the country.
“Hotel trade more broadly continues to show unbridled year-on-year growth, outperforming most other retail and service sectors and continuing to enjoy some of the highest barriers to entry for any business category in the country,” according to JLL.
“So it stands to reason that breadth of capital escalation into the sector is accumulating at an astonishing rate.”
Rival pub owner Arthur Laundy says The Oaks will be well run by the Gallagher Hotel Management Group. Picture: David Caird
Gallagher Hotel Management chief executive Patrick Gallagher said the family was very excited about such a milestone acquisition.
Mr Gallagher paid about $20m for the leasehold of the Jacksons on George bar last year, picking it up from a group of investors including Maurice Terzini.
All up, Gallagher Hotels owns and operates 13 pubs around Sydney, including five PJs Gallagher’s Irish pubs, French-inspired venues the Union Hotel, Le Pub CBD and Le Pub Balmain, the Belgian Beer Cafe Heritage, Springwood Oriental Hotel, the Hunters Hill Hotel, Longueville Hotel and the Liverpool Hotel. Gallagher Hotels sold the Royal Hotel in Sydney’s Ryde to former Wallaby, the Sydney hotelier Bill Young for close to $40m, in 2021.