There are positive signs for Melbourne’s COVID-hit hospitality scene, with after-dark institutions being snapped up by investors getting into the industry for the first time.
Dapper Exhibition Street cocktail den 1806’s leasehold has changed hands to industry debutants and will continue to run as normal on a 3+5+5-year agreement.
“What’s happening is big bars run under management are having passive investors going in there, taking over, and bringing new blood to it,” CRE Brokers’ Lloyd Nunn said.
“So both 1806 and The Vic buyers have never worked in hospitality before; they’re purely passive investors, both venues have a management team in place and the new owners are very good within their own businesses — and also like a drink too.”
Mr Nunn, who also runs Bar Sales Melbourne, brokered the three leasehold deals and said while businesses had been lost during COVID, some “viable” hospitality venues were doing better than ever.
“Good venues, that are well operated and on decent rent, have absolutely smashed it since November; there are a large number of venues out there making more profit now than they’ve ever done, he said.
“However, there are quite a few CBD venues that are in trouble because their daytime and after-work trade is reduced, but their late-night trade is still there.”
Venues that had collapsed couldn’t afford their rent, even with a reduction, when they weren’t able to trade, Mr Nunn said, while those that were doing better than ever were getting through well with “rent relief, JobKeeper — basically all the government stimulus packages”.
But there are still difficult times ahead.
“Things will change at the end of March when stimulus packages are withdrawn and then we’ll see what happens in April,” Mr Nunn said.
The buyers of 1806 and Vic Bar will run the businesses as is under management. The Noble Experiment will also continue to run as normal.
1806’s leasehold is understood to have sold near its $750,000 listed price, with the new owners likely to update some aspects of the venue. All the staff are staying on.
Mr Nunn said 1806 was “pumping” and the scene was “vibrant”.
“A lot of venues spent a fortune on refurbs and are now reaping the benefits”, he said, including newly-opened The Brunswick Ballroom, previously The Spotted Mallard, which he sold the leasehold of last year.