Acquisition of The Limerick Arms

Dear Members

The Celtic Club is taking a major step forward on 1st July in acquiring the securely leased, prominently positioned Limerick Arms Hotel in South Melbourne for $5.3million. This investment decision is a key step towards securing the financial health of the club, generating income and improving the asset base.  It will also help address the need of the club and its members to access a venue for a range of social events and activities. By itself, it is not the definitive solution for a new home for the club but represents a decisive stepping stone which addresses immediate financial and social needs.

The Limerick Arms, a prominent three-storey corner hotel at 364-368 Clarendon Street was sold by Colliers’ Guy Wells, Oliver Hay and Tom Isaksson in conjunction with Cropley Commercial’s George Iliopulos on a short settlement.

The Limerick Arms offers a securely leased investment with a quality tenant who has extensive operational experience in a variety of pubs having operated the Limerick for more than seven years. The fact that there is a quality tenant plus the genuine security offered by the lease agreement were key features considered.  We do not wish to operate the business but merely to draw the rental income that it provides to our bottom line, while exploring opportunities to collaborate with our tenant.

The Limerick Arms Hotel, positioned on 347sqm at the corner of Clarendon and Park Streets in South Melbourne, is a prominent freehold hotel situated on the doorstep of the Melbourne CBD. Public transport is excellent and the venue is also well positioned for a key segment of Melbourne’s Irish Australian community.

The three-level hotel comprises a public bar and sports bar area, large outdoor seating area, main dining room and separate first level function room with outdoor deck area.  The hotel also provides accommodation rooms to the second floor and opportunities for capital improvement.

The prime location of the asset within the heart of the Clarendon Street retail precinct and its close proximity to the iconic South Melbourne Market, Albert Park, Royal Botanic Gardens and bayside suburbs were strong drawcards.

Mr Wells of the firm Colliers said the Limerick Arms represented an outstanding investment proposition, providing an opportunity to acquire a corner position in a tightly held retail precinct with strong underlying income.

“Having sold their CBD asset in 2016, the Celtic Club has now been able to secure a strong investment return with a popular corner pub and successful business underpinning their returns,” he said. “The Club will look to work with the tenant and potentially make use of the function rooms and spaces to have meetings and events while looking actively for an additional multi-purpose site to replace their previous CBD venue and now-closed North Melbourne leasehold.”

Club Treasurer, Carl Walsh FCA, added: “We are pleased to have been able to secure this asset with a yield of over 4% for the Club, which will underpin a return to surplus in our FY22 budget.”

In closing I would like to emphasise the vital point that this purchase is merely the first decisive step in exploring complementary venues and sites for the future activities of the reinvented Celtic Club.  This is vital if we are to renew the club and attract a new generation of members, at the same time as deeply respecting and catering for the needs of existing members. A tremendous amount of work has been done to secure this investment on behalf of the Club, and the attractive rate of return from the freehold, alongside the opportunity to work with the operator on hosting some Club activities on site was key to the decision by the Committee.

At our recent Member Forum, we spoke about our multi-site strategy, underpinned by strong financial returns, and we hope that Members are encouraged by our getting on with the job and achieving tangible goals.

Yours sincerely,

Patrick McGorry
President
Celtic Club

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