Decline in prices to continue as fewer pubs are selling
PRICES for pubs are expected to continue to fall this year and most of the sales will be generated from insolvencies resulting from lower drink sales and unsustainable debts, say pub property specialists Morrisseys in their annual review.
They report that only five licensed premises changed hands in Dublin in 2010 at an average price of €970,000, compared with an average of €4.42m in 2009.
Last year's activity was dominated by sales of leasehold businesses, which have lower values than freeholds.
They accounted for three of the five sales, and included the Residence Club in Stephens Green and Ron Blacks in Dawson Street.
The falling value is also reflected in the lower multiples of turnover, which now range between 1.5 times and 2.5 times turnover compared with between 1.75 and 3.0 times turnover in 2008/9.
Meanwhile, rival estate agency CB Richard Ellis estimates that almost 60 hotels were in receivership or liquidation at the end of 2010.
"We expect a continuation of this trend with many hotels, particularly outside Dublin, going into receivership over the next 12 months," says CBRE director Paul Collins.
While hotel owners and their banks have been trying to trade through difficulties or using temporary management firms, he expects banks to crystallise their losses this year.
However, Dublin hotels should benefit from facilities such as the National Convention Centre and Aviva Stadium.