Sydney Leisure, Gaming and Property Growth Fund (Lone Pine) No. 2

The SLGPG Fund (Lone Pine) No. 2 (the Fund) has been established to acquire the Lone Pine Tavern, located at 13-15 Rooty Hill Road, Rooty Hill, NSW 2766 (Lone Pine Tavern). The Lone Pine Tavern a single level hotel totally refurbished and extended in 2009, comprising of a public bar, a lounge bar, internal and external gaming areas (28 machines), large bistro, beer garden, designated function room, an internal and external TAB area and drive through bottle shop. The Lone Pine Tavern also has 165 car parking spaces.

The Fund’s investment objective is to provide investors with a regular income return underpinned by gaming and food and beverage revenue in addition to providing investors with the potential for capital growth upon disposal of the investment or a portion of the property. The investment strategy is to:

  • Purchase both the freehold and leasehold interests of the Property.
  • Engage the Hotel Manager to manage and improve the Business with a view to increasing earnings each year during the term of the Fund.
  • Potentially commission the Development Manager to undertake subdividing and other development strategies to improve the value of the Investment with a view to crystallising that improvement through the sale or development of a portion of the Property.

The Lone Pine Tavern has been chosen because it fits within the parameters of the Manager’s chosen investment strategy of high yielding hotel assets within the Western Sydney growth corridor. In particular this asset has been chosen because of its high yield and the mix of business earnings currently weighted towards food and beverage operations which the Manager believes can be reweighted towards a higher percentage of gaming earnings. The Manager believes this increase in gaming earnings will offer a more stable form of income which should then be valued by the market using a lower discount rate for valuation purposes.

The key features of the Lone Pine Tavern are:

  • Large multi-revenue business with approximately $9,500,000+ in annual gross revenue.
  • Strategic 9,789 square metres (approximately) site opposite Rooty Hill retail precinct and adjacent to Rooty Hill Train Station.
  • 28 Poker Machines, with only 8 machines currently situated in areas that conform to regulated smoking conditions and with outdated hardware and software.
  • Close proximity to Rooty Hill RSL, which is Australia’s largest RSL club (726 gaming machine entitlements, $84 million in revenue), which are strong business drivers.
  • Impressive hotel with modern fit-out in one of the fastest growing local government areas in Sydney (340,000,000 residents 2016, forecast 32 percent population growth by 2036).
  • Excellent further development potential with future accommodation/ residential potential (subject to council approval).

The Fund is only open to persons who qualify as wholesale clients (as defined in section 761G(7) of the Corporations Act) or sophisticated investors (as defined in section 761GA of the Corporation Act).