Sydney pub group and Queensland property companies collapse

The carnage in the Australian property sector shows no signs of abating, with a major Sydney hotel group, Landmark Leisure, placed in receivership.

The group, which owns the Vegas Hotel and Mansions Hotel in King Cross, the Oxford Hotel in Darlinghurst and the Peakhurst Inn in Peakhurst, was placed in the hands of receiver Peter Walker of Ferrier Hodgson yesterday, by lender BankWest.

BankWest, which is now owned by Commonwealth Bank, is believed to be owed $90 million by the group.

Walker was not available for comment at the time of publication, but told the Australian Financial Review that Sydney’s controversial new 2am lock-out laws (which prevent pubs and nightclubs from admitting patrons after 2am) had had a “pretty significant effect on revenues”.

The collapse of Landmark Leisure is more evidence of how much trouble the pub sector is in, as high debt and falling discretionary spending increase the pressure on pub owners to pay down borrowings.

Last week Sydney’s Cauliflower Hotel as placed in administration, while Melbourne pub group Cornerstone Hotels collapsed earlier this year.

Meanwhile, two Queensland property companies, Indigo Real Estate Property and Indigo Projects Management, have been placed in administration.

The two companies are part of the Indigo Private Group, which are linked to sharemarket-listed property lender, Indigo Pacific.

In a statement to investors, Indigo Pacific managing director Steve McKay said it was now uncertain whether the $27 million debt owed by the two collapsed companies would be repaid.

“The recoverability of the loan to Indigo Private Group is dependent on Indigo Private Group continuing as a going concern. This latest development confirms that the recoverability of the loan must be considered doubtful,” he said in a statement.

McKay says Indigo Pacific “has sufficient funds to meet normal operating costs on an ongoing basis” while the company negotiates “the best outcome”.