PUBLISHED: 28 JUN 2014 02:46:49 | UPDATED: 28 JUN 2014 02:46:49

KAREN MALEY

Investors are keeping a close eye on the hotel and gaming industry as supermarket giant Woolworths weighs up whether it will unload about $650 million worth of pubs and liquor stores through a sale to a trade buyer or press ahead with a sharemarket listing.

The pubs are held within ALH Group, which is 75 per cent owned by the supermarket and the remainder controlled by pub baron Bruce Mathieson. ALH is the country’s largest and most profitable pub operator.

If Woolworths opts for the trade sale route, analysts believe the country’s largest owner of pub freehold properties, ALE Property Group, is in the box seat. ALE is one of the listed real estate sector’s most solid performers, averaging a near 20 per cent compound return for the past decade. But although ALE has the potential to lob an aggressive bid, and could potentially tap shareholders for extra funds to finance the purchase, the trust has a distinctly conservative approach to acquisitions and has not bought a pub in five years.