Entrepreneurs invest $200 million into leisure empire

Three of Sydney's biggest private investors have pooled their resources in order to launch a $200 million hotel leisure fund. These investors hope to build a portfolio of pub assets.

The investors involved in this deal need to finalise a few details before it becomes official. They believe that they can purchase 15 to 20 good properties with their current budget.

The reason that pubs have been chosen is that these investors have been successful with them in the past. It is also important to note that real estate experts have predicted pub prices have hit rock bottom. As sale prices are unlikely to drop anytime soon, this is a great time to buy a pub.

It is fair to assume that some of $200 million will go towards advertising and marketing. Pubs tend to be successful with very small marketing campaigns. In fact all some small businesses do is utilise printing services in order to hand out flyers on the road. Pubs which are part of a franchise may advertise on television. As the fund has a high budget it is likely that the pubs they do purchase will already be experiencing some success. The pubs in the portfolio currently include the Peakhurst Inn, Glebe and Kinselas at Darlinghurst.

Sydney is a city which is full of budget, mid-range and luxury entertain options. Investors who want to get into the hospitality industry should be prepared for some volatile results. While pubs are often a financial success it is important to remember that the country is still recovering from an economic recession.