Palace and Tivoli: Could We Lose Our Theatres?

With news that both The Tivoli in Brisbane and The Palace Theatre in Melbourne are set to go under the hammer, both cities seemingly omnipresent fear of losing another high quality entertainment venue has come to the fore again.

Neither The Tivoli, built in 1917, nor The Palace, initially erected as The Douglas Theatre in 1860 before it was destroyed by fire and reopened in 1912 as Brennan's (National) Amphitheatre, have heritage protection and are both in boom areas with large residential and commercial demand.

One of the CBRE sales agents looking after The Palace's sale, Mark Wizel, admitted to Property Observer this week that interest has “centred on the highest and best use for the property being a high-density residential project subject to the relevant planning approvals”. Though Scott Callow, another of the agents, indicated there was strong early interest from nightclub operators looking to restore the venue as well. It is expected to fetch somewhere in the vicinity of $15 million.

Current operators of The Palace Theatre, which is owned by property developer and nightclub identity Jerry Pilarinos, issued a statement in response to news of the sale, indicating they'd be looking to continue operating as per normal.

“The landlord has decided to place the building on the market,” the statement begins. “The venue and its activities will continue as an operating business into the foreseeable future. As a matter of priority, the Palace will be working towards a lease extension with the new building owners if a sale eventuates.”

The Tivoli has been owned by the O'Rourke property development family company Dromahair Pty Ltd since 1999 with that company's managing director John O'Rourke serving as the venue's manager since 2004. While it was purchased for $1.65 million, the family have invested millions of dollars into making it a premier live music venue and, as such, it is expected to fetch a large amount more than that. Leon Alaban of Ray White Hotels Australia, who are marketing the property on Dromahair's behalf, told Property Observer the family were looking to let the market stipulate its worth.

With both venues able to continue operating as per normal at the present time, opportunistic entertainment promoters may consider either of the venues a viable business prospect. But with both lying in such high-demand areas, property developers won't be leaving either venue alone.