Hotel entrepreneur Justin Hemmes sells property to reduce debt

Entrepreneur Justin Hemmes, who owns the glamorous Sydney entertainment complex the Ivy, has been forced to offload two properties to meet debts associated with the Ivy.

The Hemmes family is selling a six bedroom home in the exclusive Sydney suburb of Vaucluse and a restaurant in upmarket Potts Point.

Hemmes father John told Sydney’s Daily Telegraph newspaper that the family wants to reduce debt associated with the $150 million Ivy complex, which opened in April 2008.

The family’s Merivale group, which is run by Justin Hemmes, owns a portfolio of clubs, bars, restaurants and pubs in Sydney, including Establishment, Hotel CBD and up market eateries EST.

Rumours of financial troubles have dogged Hemmes for the past few months, with reports in Sydney newspapers and hospitality sector trade publications suggesting Merivale Group faced receivership.

Hemmes has consistently denied this speculation and his father told the Daily Telegraph that both properties were difficult to rent out and it was easier to sell them. The six bedroom home, which adjoins the family’s Vaucluse mansion, called The Hermitage, will go to auction on 19 May and is expected to fetch as much as $13 million.

The downturn has hit the hotel and clubs sector. The empire of Sydney pub baron Mark Alexander-Erber (better known as Pubboy) collapsed last year and Melbourne hotel group Cornerstone collapsed into administration in late March.

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