Australia’s oldest Irish club, the Celtic Club, has purchased the Limerick Arms Hotel in South Melbourne as it looks to secure its long-term future.
The Celtic Club has purchased the freehold component of the Limerick Arms Hotel for $5.3 million. The three-storey pub is positioned on a 347 sqm block at the corner of Clarendon and Park Streets. It comprises a public bar and sports bar area, large outdoor seating area, main dining room and first-level function room with outdoor deck area. Accommodation rooms make up the second floor and there are opportunities for capital improvement. The pub already has a long-term tenant in place.
The freehold sale was overseen by Colliers’ Guy Wells, Oliver Hay and Tom Isaksson, in conjunction with Cropley Commercial’s George Iliopulos.
“The Limerick Arms offered 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,” stated Wells.
“The tenant and the security offered by the lease agreement was a strong drawcard for the purchaser, the Celtic Club.”
The Limerick Arms Hotel purchase was made as part of a multi-prong investment strategy for the 134-year-old Celtic Club. The club sold it’s CBD venue in 2016, and has since been operating out of a section of the Metropolitan Hotel in North Melbourne, but the pub recently closed. The Limerick Arms has been acquired not only as a revenue stream, but the club’s management hopes to work with the pub’s operators to make use of some of the space in the hotel for events.
“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 attractive,” stated Celtic Club president Professor Patrick McGorry AO.
“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.”
Club treasurer, Carl Walsh FCA, added: “We are pleased to have been able to secure this asset with a yield of over 4 per cent for the Club, which will underpin a return to surplus in our FY22 budget.”
The Celtic Club is also looking for a more permanent home for their members and activities.
Wells says the sale price and yield of the Limerick Arms Hotel freehold is indicative of the scarcity of inner-Melbourne pub assets on the market.
“Of the inner city food and beverage pubs to be marketed in 2021, all have been transacted on yields of sub 4.5 per cent and with short settlement terms reflecting the availability and willingness of purchasers to deploy capital.”