IN 2007, Warwick's iconic Palace Hotel exchanged hands for a cool $2.7 million. Today, the property is under contract for about one third of that amount.

The hotel, at the corner of Percy and Palmerin Sts, and the Westside Bottle shop both shut up shop in December last year and went into receivership shortly afterwards.

Director of hotel brokering company Power Jeffrey and Co, Peter Power, said the Palmerin St hotel and the Westside bottle shop had been snapped up by an unnamed buyer.

Although he couldn't offer an exact sale price, he confirmed it was under the $1 million mark.

"It is sold subject to the usual liquor licensing requirements, which will take a number of weeks to satisfy," he said.

Rumours have been circulating throughout the Rose City over past months, with some naming Woolworths as a potential owner.

While Mr Power was unable to reveal the name of the buyer as yet, he said it was somebody with "substantial" property holdings in the local area.

Mr Power offered some insight into the future of the hotel site, saying it was likely to remain operating as a pub.

"At this stage, we're not exactly sure ourselves what the plans are, but they will certainly continue to trade as a hotel and I believe they will be renovating and upgrading the property," he said.

Mr Power said the property had been on the hotel market for six weeks, a standard time frame for hotels.

He said an expression of interest campaign had sparked responses from six different parties.

The new owner's vision will soon be evident, with the property expected to settle within eight to 10 weeks.