Fortitude Investment Partners sold 11 Adelaide-based pubs for c.$160 million, delivering a return of two times invested capital.

GM Hotels, established as a partnership between Fortitude and Greg Maitland in 2015, consisted of leasehold and freehold assets in South Australia all with diversified revenue streams in gaming, food and bar and retail sales.

Our results

The sale of GM Hotels generated an internal rate of return (IRR) of greater than 15% and a return of two times invested capital.* The group sold its venues to local and national buyers including ALH, Harvest Hotels and RD Jones Group over the course of 2022 and into 2023.

* Past performance is not an indicator of future performance.

10.9x

EBITDA multiple AT POINT OF EXIT

10% p.a.

cash yield during investment

50%

growth to group earnings during investment period

CHALLENGES OVERCoME

  • Navigated regulatory challenges around gaming, sluggish local trading conditions and COVID-19 impacts to deliver capital growth and a consistent cash yield.

  • Sold surplus land and invested significantly in renovating and upgrading venues.

  • Capitalised on market adjustments from COVID-19 and acquired an additional freehold venue as well as the land at two existing leasehold venues.

 

Investment reasoning

Strong focus on yield versus capital growth and leveraging cash-generating assets and promising entry valuations. Partnership with the highly experienced licenced venue operator and team with extensive industry knowledge unlocked asset values.

 
 
 

growth in adverse conditions

We delivered investors a consistent cash yield of 10% per year net of fees.

 
 

record venue sale

Emu Hotel sale in Adelaide’s southern suburbs to ALH and Charter Hall fetched $32 million - a South Australian pub sale record.

 
 
 

Strong local knowledge

Greg Maitland, Hugo Burton and the GM Hotels team are highly experienced in the SA hospitality industry with deep knowledge about local assets.

 
 

Realising upside opportunities of the assets

We realised the benefit and the sale and development of excess freehold land, selective renovations, other venue purchases and associated freehold land.