Redcape Hotel Group has bought Caves Coastal Bar & Bungalows at Caves Beach from Oscars Hotels for about $40 million. Oscars paid $35 million for the waterfront venue in early 2022.
It is Redcape's latest move in a rapid expansion across the Hunter and Central Coast and another sign that hotel groups are paying well for venues with several income streams.
The deal at a glance
- Asset: Caves Coastal Bar & Bungalows, 27 Mawson Close, Caves Beach NSW
- Price: about $40 million
- Site: almost one hectare of waterfront land, freehold going concern
- Accommodation: 18 freehold bungalows plus management rights to a pool and nearby resort villas
- Venue: bar, bistro, function and conference rooms, 17 gaming machines
- Trading: weekly revenue above $200,000
- Buyer: Redcape Hotel Group
- Seller: Oscars Hotels (Bill and Mario Gravanis)
- Agent: JLL
From local pub to coastal destination
The venue began as the Caves Beach Hotel and was redeveloped into a broader hospitality destination with accommodation and events. Oscars bought it from the Malouf family's Royal Hotels and Marty Short in early 2022.
Redcape's regional push
Redcape has been one of the busiest pub buyers this year. In July it bought nine pubs from Iris Capital, including Newcastle's QT Hotel. In May it paid $36 million for The Entrance Social Club Hotel near Wyong. Caves Coastal adds a premium waterfront venue with accommodation to that portfolio.
Why the price stacks up
The venue earns from food, drinks, gaming, functions and accommodation, so it is less exposed to any single part of the business. A waterfront freehold of almost a hectare is also hard to replicate on the NSW coast, which supports long-term value.
Hunter hospitality is hot
Syndicates, pub groups and operators have been active right across the region this year, from Newcastle's Cooks Hill to the Central Coast. Strong local population growth, tourism and regional migration are all supporting trade.
Why accommodation lifts value
Adding accommodation to a pub changes the business. Guests eat and drink on site, weddings and conferences fill the function rooms and the venue becomes a destination rather than just a local. Revenue is spread across more days of the week and more types of customer, which lenders and buyers like.
Coastal locations add a tourism layer on top of local trade. With strong holiday demand along the NSW coast and growing local populations, venues like Caves Coastal can trade well year round, which helps justify a price around $40 million.
What it means for the market
- Venues with accommodation and events are trading at strong prices
- Hotel groups are building regional clusters through serial acquisitions
- Waterfront freeholds keep their scarcity value
Lessons for owners
- Diversify the income: accommodation and functions lift resilience and value
- Invest in the venue: a strong redevelopment can reposition a local pub as a destination
- Market the experience: photography, video and renders of upgrades help buyers price the potential
What to watch next
Watch whether Redcape keeps buying on the Hunter and Central Coast and what upgrades it plans for its new waterfront venue.