High-profile restauranteurs and chefs are among the wave of city investors turning their sights to regional pubs and hotels, with country publicans seeking to cash-in on the trend.
The Commercial Hotel in Millthorpe, which hit the market this week, is a case in point.
Purchased in 2020 by siblings Andrew and Kath Logan who conducted extensive renovations before reopening earlier this year, the 1877-built property has now been listed with a $2 million price guide after a number of off-market approaches from interested parties.
"We expect a range of buyers to be interested in purchasing the hotel, including those already in hospitality who want to be part of a substantial increase in regional New South Wales produce areas," listing agent Deborah Cullen of Cullen Royle said.
Ms Cullen said that Sydneysider interest in the region was a trend years in the making but that "Covid has probably given more energy to it."
"People are seeing the value now in those regional areas and that Sydneysiders really enjoy getting out and being able to enjoy and being able to have that great food, wine and fresh air," she said.
"That other side of the Blue Mountains, [including] Bathurst, Mudgee and Orange, has a really strong draw for Sydneysiders."
Interest in the property, among the first buildings in the village, had been "immense" with prospective buyers including Sydneysiders, regional buyers, groups and individuals.
Celebrity chef Matt Moran's purchase of The Rockley Pub, a 47 minute drive from Millthorpe, was a sign that high-profile operators were taking note of this trend and turning their sights to the regions.
"We have recently seen Matt Moran purchase The Rockley Pub in nearby Rockley, which we believe is part of a broader trend for 'destination pubs' in regional Australia, with these hotels being turned into a vibrant town hub that both locals and tourists want to visit," Ms Cullen said.
Mr Moran said that while his purchase had been partially driven by sentimental reasons, he believed there would be an increased level of interest in regional hospitality venues.
"I think we will see a lot more movement in the hospitality landscape with people moving out of the city and into regional," Mr Moran said.
"Over the last year Australians have taken the opportunity to explore their backyard and support our regional communities.
"It is no secret that I am happiest when I am at the farm, and now seemed like the perfect moment to get back to my roots and start a new chapter in Rockley. The Rockley Pub is a passion project for me," he added.
Sydney-based hospitality tsar Justin Hemmes, who owns city properties including ivy and the Coogee Pavillion, has made waves this year with his purchase of several regional pubs along the east coast.
This year he has purchased the Whale Inn and The Quarterdeck in the NSW south coast town of Narooma, as well as the Lorne Hotel on Victoria's Great Ocean Road for a reported $38 million and the former Cheeky Monkeys bar in Byron Bay for a reported $13.5 million.
Mr Hemmes was contacted for comment but had not replied at the time of publishing.
Andrew Jolliffe, managing director of HTL Property, which specialises in pub and hotel sales, said that the recent transactions by Mr Moran and Mr Hemmes would heighten the rapid transformation taking place in the regional pub scene.
"There are regional pubs that have been 'upmarket' for some time, and the recent acquisitions by Justin Hemmes and Matt Moran will only deepen the capacity for offerings in sub-metro areas to mirror those found in more urbanised equivalents," he said.
The exodus of city dwellers during the Covid-19 pandemic to 'lifestyle' hotspots meant that city operators were increasingly keen to diversify their portfolios.
"We have offer and acceptance on another five hotels outside metro areas and which can be classed as lifestyle regions. Geographically, these areas are now frequented by considerably more people with greater discretionary income profiles," he said.
Investor syndicates are also making their presence felt in regional markets, with a consortium including the Laundy, Cruickshank and O'Hara families snapping up the Springdale Heights Tavern in Albury for a reported $22 million.
The purchase followed other recent acquisitions in Wagga Wagga including the Sportsmans and Duke of Kent.
Other regional sales of note this year include the Robin Hood Hotel in Orange, for $19 million and the Moonee Beach Hotel in Coffs Harbour, for $23 million.
Mr Jolliffe, whose firm facilitated these transactions as well as the Springdale Heights Tavern sale, said HTL had sold "in excess of one regional hotel" per week in this calendar year.
"It is patently clear that there exists both a market and investor appetite to extend capital geographically away from metro markets where the opportunity permits," he said.
"Population shift speaks partially to this phenomenon, but more likely the yield discount enjoyed is also a compelling determinate. In addition, Australia's Covid-19 inspired and rekindled association with regional areas has also reawakened the possibilities for alternative domestic investment... [That's something] we think will enjoy longevity well beyond the reopening of international borders," he said.