Harley Payne and his son Tom bought the Grand Hotel Armidale for an undisclosed amount, but when it went to market, the value of the gaming machine entitlements, land and buildings was estimated to be at least $3 million.

But that is a drop in the ocean of what is proving to be a multimillion dollar regional hotel market.

Xavier Plunkett from HTL Property did the latest Armidale freehold interest hotel deal in conjunction with Leonard Bongiovanni.

Mr Bongiovanni said the price achieved was largely in line with the advertised price expectation.

Mr Plunkett said the sale is indicative of a robust regional hotel market, particularly in the New England Region.

"We have seen $110 million worth of pub sales in the region in the past 18 months alone," he said.

The hotel was sold within the first week of an expression of interest campaign on behalf of the vendor Steve McEvoy.

Mr McEvoy will continue to hold a stable of freehold hotel investments on the NSW mid-north coast.

The Grand Hotel is now held by is a newly formed partnership between Harley and Tom - both highly regarded owners of the St Kilda Hotel in Armidale.

The venue will continue to be run by the current lessee.

Second generation publican Brett Neilson bought the 15-year lease to operate the Grand Hotel in February 2021. He also owns the operating lease for the New England Hotel in Armidale, which he purchased in 2019.

"We are delighted with the acquisition and feel it will be a good long-term investment for our family," said Tom Payne.

"Obviously, we have the capacity to run the venue in the future should the opportunity arise, however right now, we are very comfortable with the current passive rental return."

The prominent brick hotel features a public bar, bistro, gaming room, beer garden, car park with 22 carparks on the title, all of which sit on 1667m2 of land located on the corner of Rusden Street and Ohio Street, with 56.1m* of street frontage.

Mr Plunkett said the hotel is strategically located 800m from Armidale CBD, 400m from Armidale's industrial district, and 200m from Armidale Hospital.

The 'passive rental return' is currently $109,200 in annual rental revenue and will increase to $151,800 by August 2022.

"The sale price represents a yield of about 5.15 per cent by mid-2022," Mr Plunkett said.

"The Paynes were attracted to a combination of the stable and secure rental income, the underlying asset value; the geographical proximity to their current assets in Armidale, and the positive economic sentiment enjoyed in the region."

HTL Property is a national operator specialising in the hotel industry.

Managing director Andrew Jolliffe told the Express last year there had been an 'extraordinary increase' in the number of metro-based investors prepared to invest regionally.

"I think the domestic market has looked a bit inwards because borders have been closed, and people have been travelling to regional areas for recreation and reconnected with these areas," Mr Jolliffe said at the time.

"It's given them some confidence to turn those recreational thoughts into commercial investment thoughts."