A famous deal brewing Investors are returning to the property sector in droves as they seek out higher-yielding returns, and the hospitality industry is the spotlight. While freehold and leasehold pubs have the limelight, first for being sold at inflated prices and then bought back at market values, the sector is having a renaissance. Stand-alone and brewery-style restaurants are gaining a foothold in investment portfolios, with valuations now at more realistic levels. Super fund managers say property is close to 10 per cent of their portfolios, and with investment-grade office, retail and industrial assets in short supply, pubs are viewed with cautious interest. One of the latest is the King Street Brewhouse on King Street Wharf in Sydney, which is being sold by the Jones Lang LaSalle Hotels and Hospitality Group. A similar property at the southern end, Helm Bar, formerly Pier 26, was sold for $17.5 million in July 2008. Listed company Amalgamated Holdings sold the 1750 square metres pocket of land containing the Pier 26 Bar and retail harbour cruise ticketing tenancies to Peter Wadsworth. The site has an 80-year head lease let from the Sydney Harbour Foreshore Authority. At 1315 square metres, the King Street Brewhouse is famous for launching the James Squire brand of beer, and is believed to be the largest strata retail premises ever offered for sale on the King Street Wharf. It is flanked by some of the most successful hospitality businesses in Sydney, including Bungalow8, Cargo Bar, Malaya, Steersons and Nicks. The whole area was built by Brookfield Multiplex. The King Street Brewhouse occupies the northernmost position on the wharf next to the $5 billion Barangaroo development. Jones Lang LaSalle Hotels and Hospitality national director John Musca says that with the movement of more than 25 million people a year into the Darling Harbour and King Street Wharf precinct, and the two largest Sydney harbour infrastructure redevelopments in the city, at Barangaroo and Darling Harbour, set to double that, this will become one of the busiest capital-city waterfront precincts in the world. "Barangaroo is to be home to an estimated 23,000 workers with over 560,000 square metres of office space and will include a world-class hotel and the mooted Packer casino," he said. The Sydney international Convention and Entertainent Precinct Darling Harbour project spans 20 hectares of convention, exhibition and hotel development with new light rail access. "This area is undergoing a growth the scale of which has never been seen in Sydney before," Mr Musca says. The King Street Wharf Brewhouse was the virtual birthplace of the James Squire microbrewery brands and the John Singleton-owned Bluetongue Brewery before SAB Millers takeover of Fosters. Mr Musca said that with the sale of draft beer forecast to grow at 5 per cent to an estimated $455 million, the King Street Brewhouse site has a solid brand and trading footprint. In addition, with rents on the wharf averaging $1500-$2000 per square metre, the site represents a AAA property investment.