The Mercantile put on the block

The oldest Irish pub in the country, The Mercantile at The Rocks in Sydney, is set to be auctioned on Thursday.
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The pub is leased on a long contract from the Sydney Harbour Foreshore Authority, (SHFA) by a private syndicate, of which the former NSW police minister Paul Whelan, and businessmen Terry O’Neill who is the licensee, and Laurence Coy are all partners.

In 2005 the same investor syndicate raised about $19.5 million when it sold the 40-year leasehold on the Orient pub, just down George Street from The Mercantile.

The sales agent for The Mercantile, the director of hotels at Knight Frank, Mick Wheatley, said recently the pub sector has been one of the busiest in the past year with private investors, syndicates and larger funds all competing for a foothold in the assets.

In the past year as much as $500 million worth of pubs have changed hands as investors such as John Singelton, former Qantas director Geoff Dixon and the Riversdale Group, as well as the Laundy, Short and Bayfield families, among other smaller players, have ear-marked the sector for significant growth.

The assets are attractive for capital and land growth as much as for food and entertainment, with poker machines relegated to a small room.

According to the buyers, gaming is not main the attraction, instead the focus is a good restaurant, lively and well-presented bar, and a place to watch a sporting event.

In late May, Mr Wheatley sold the popular Annandale pub to Oscars Hotels headed by Bill Gravanis, who plans to keep it running as a music venue.

The pending auction of The Mercantile comes hot on the heels of the deal by Peter Walker, as head a local syndicate, who has bought The Fortune of War Hotel, at 143A George Street, from a private investor for $4.3 million. Andrew Jolliffe of Ray White Hotels and Mr Wheatley brokered the sale.

It was another leasehold hotel property in the Rocks controlled by the SHFA until 2028 and consisted of three businesses under the one lease including The Russell boutique hotel and The Russell Wine Bar and The Fortune of War pub.

The entire property has 30 hotel rooms and 15 poker machines.

“The property has not been on the market for 28 years and is a rare investment opportunity within a normally tightly held market in the Rocks,’’ Mr Wheatley said.

‘‘The Mercantile is another asset which hasn’t been on the market for 28 years. It is the country’s oldest running Irish pub and a popular tourist’s drinking spot,” Mr Wheatley.

The original release of this article first appeared on the website of Shanghai Night Net.

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