A deal was struck following an auction of the Gateway Island hotel yesterday afternoon.

Auctioneer Andrew Dixon, of L.J. Colquhoun Dixon real estate, said it was a good result for the multi-level building on the prime 4360sq m block.

“We were of the opinion that the property was worth in the vicinity of $1.1 million and $1.2 million,” he said.

“The reserve was for $1.25 million and it sold at slightly below that.”

Mr Dixon said the property was bought by an undisclosed syndicate which was unlikely to change the operation of the tavern in the immediate future.

The auction attracted a crowd of about 30 people, but secured just two bids.

A vendor’s bid of $1 million attempted to start the ball rolling, but stopped short with just one offer of $1.02 million.

The property was resubmitted for auction and drew a bid from another potential buyer for $1.04 million before it was passed in at $1.045 million.

Negotiatio ns were then carried out with the highest bidder before an agreed price was reached.

Yesterday was the first time in nine years that the Three Monkeys Tavern was up for sale.

Owner Tom Christian and his family paid $1.03 million for the hotel in March, 2000, leasing it to various operators since then, including current operator Tony Ventura.

The property is rented for about $120,000 per annum plus GST and outgoings, with the lease extending to June, 2011.

The hotel cost $2 million to build for Fritz Walter as the Palatinat Brewery.

Then Victorian premier Jeff Kennett opened it in 1998 but within three years the company associated with Mr Walter went into receivership owing more than $1 million to a bank.

Gold Coast couple Greg and Deborah Davis reopened it as lessees as a hotel and function centre called City Hall.

In 2004, the name was changed to the Three Monkeys when Corryong men Jonothan Pole and Stephen Nugent took over the lease.