Pub and hotel valuations that separate the property, the licences and the operating business.

A pub valuation in Australia separates three assets bundled inside one venue: the property interest (freehold or leasehold), the statutory licences (liquor and gaming), and the operating business. Prismi values Australian pubs and hotels using EBITDAR analysis for leasehold venues, going-concern methodology for freeholds, and gaming machine entitlements evidenced at the valuation date — concluding at the most supportable position within an evidence-led range.

When a pub or hotel valuation is required

Pub and hotel valuations arise at sale and purchase (freehold going concern or leasehold), partnership and shareholder entry or exit, family transfers and group restructures, refinance, family law property settlements and estate matters. They also arise where advisers are working through small business CGT concession positions under Division 152 ITAA 1997 — noting that a freehold pub leased to a third-party operator raises active asset questions under s 152-40, because the main-use-to-derive-rent exclusion can apply, whereas an owner-operated freehold going concern sits differently. Whatever the trigger, the basis being applied is market value under IVS 104 — the price a willing-but-not-anxious buyer and seller would agree — and reports are prepared with ATO market valuation expectations in mind so the reasoning is already on file if a position is later reviewed. Prismi prepares the independent valuation and the evidence behind it; we are not a registered tax agent and do not provide tax or legal advice — concession eligibility remains a matter for the client's tax adviser, supported by our valuation evidence.

Three assets in one: why the split matters

The split matters because a freehold going concern and a leasehold pub are valued on entirely different bases despite looking like the same kind of venue. A freehold going concern bundles the land and buildings, the statutory licences and the trading business into a single walk-in-walk-out asset, typically valued on capitalisation of the combined earnings or a yield basis. A leasehold pub is the trading business and licences only, with occupancy secured by a lease, and sells on a business multiple after a market rent. Most pub valuation disputes we see trace back to muddling the two — applying a going-concern yield to a leasehold business, or capitalising earnings without charging a market rent for the freehold the same entity happens to own. Where the engagement requires the land and buildings to be separately valued, we coordinate with a certified practising property valuer; Prismi's report values the business, licence and entitlement components and documents the apportionment logic so the combined position is internally consistent.

Gaming machine entitlements and liquor licences

Gaming rights are separately identifiable — and in most states separately tradeable — assets, and the state regimes differ materially. In New South Wales, hotel gaming machine entitlements can be transferred between venues, generally in blocks, and transfers can attract compulsory forfeiture of an entitlement subject to exemptions, which affects the realisable value of a holding. In Queensland, hotel operating authorities are bought and sold through a state-administered market and generally only within the region where they originated. In Victoria, entitlements are allocated to venue operators for fixed terms under a state allocation system rather than traded on an open per-unit market. Entitlement pricing moves with regulation and demand, so the working file evidences value at the valuation date from regulator data and observed transfers, not rules of thumb. The liquor licence is assessed on category, trading conditions, patron capacity and transferability — a licence with extended trading approval attached to the premises is a different asset from one that is conditional, personal or under regulatory review.

EBITDAR and rent benchmarks for leasehold pubs

Leasehold pubs are analysed on EBITDAR — earnings before interest, tax, depreciation, amortisation and rent — so operating performance can be assessed independently of the rent actually being paid. Actual rent is then tested against market: rent-to-revenue ratios are benchmarked against comparable venues, and a venue paying materially above the sustainable band has its maintainable earnings and multiple adjusted accordingly, because the next owner inherits that occupancy cost. Lease tenure, option structure, market review clauses and assignment conditions are documented in the working file as primary valuation inputs, not background. A strong EBITDAR venue on a short, over-rented lease can be worth less than a modest venue with long secure tenure at affordable rent — the supportable range reflects that.

Revenue mix: bar, gaming, food, accommodation and TAB

The departmental split drives the supportable multiple. Gaming revenue is typically high-margin and recurring but carries regulatory and social-licence risk that the multiple or discount rate must reflect. Bar sales are the traditional core; food is lower-margin and labour-intensive; accommodation adds a property-like income stream assessed on occupancy and rate; TAB, Keno and wagering commissions are agency income governed by their own agreement terms. Two pubs with identical EBITDA but different mixes are not worth the same, and a purchaser, financier or reviewer will test the departmental analysis first — so the report presents it explicitly rather than burying it in a blended figure.

What the working file needs

• ·Three to five years of financial statements and management accounts, with revenue split by department (bar, gaming, food, accommodation, TAB/Keno)
• ·Gaming schedule — machine count, entitlement or operating authority holdings, and net gaming revenue by period
• ·Liquor licence details, conditions and any regulator correspondence
• ·Lease, options and rent review history for leasehold venues; title, outgoings and any related-party rent arrangements for freeholds
• ·Normalisation detail — owner remuneration, related-party transactions and one-off items
• ·Capital expenditure and fit-out history, including any compliance or gaming-area works required
• ·Accommodation trading data where relevant — occupancy, average rate and channel mix

Which Prismi tier fits a pub or hotel valuation

Most leasehold pub engagements are served by the Comprehensive report from $3,995 + GST (15–25 business days). Venues with material gaming income, freehold going concerns requiring component apportionment, and related-party or CGT positions likely to be tested generally warrant the Defensible Valuation File from $8,995 + GST (25–35 business days), documented so the position is defensible if reviewed. Multi-venue groups, partnership disputes and adviser-led matters testing several transaction structures fit the Valuation Range & Scenario Review from $12,995 + GST (30–45 business days). The Essential report from $1,495 + GST (10–14 business days) suits small non-gaming leasehold venues where an indicative position is sufficient. Retrospective valuation dates add $495 per historical date, additional entities $750 each, and rush delivery 30%. Pub and hotel valuations are frequently commissioned for family transfers, partnership exits and related-party restructures, which is exactly where APES 225 Valuation Services independence requirements bite hardest — every Prismi report is senior-reviewer signed, carries an independence statement, and the working file is retained for 10 years. Fees are fixed at engagement and never contingent on the outcome — if a target value is demanded, we will say so and decline the engagement on those terms.