Sunday 18 November 2018

Dublin pub sales hit €33m as landmark pub secures €3m

Liquid market: The leasehold interest in the Old Stand (pictured) has been acquired by the O’Malley Brothers
Liquid market: The leasehold interest in the Old Stand (pictured) has been acquired by the O’Malley Brothers
Davy Byrnes is on the market at €6m

Donal Buckley

The sale of the leasehold interest in the Old Stand Pub in Dublin city centre brings to 18 the number of bars sold in Dublin during the first 10 months of this year, with a combined value of €33m.

The latest of these sees Dublin publicans Eamon and Michael O'Malley purchase the leasehold interest in The Old Stand for a sum believed to be around €3m. The vendors, the Doran brothers, are also selling their other city centre pub, the famous Davy Byrnes, which has a €6m price tag.

Both of them are considered two of Dublin's foremost upmarket pubs as they are located close to the prime Grafton and Wicklow shopping streets.

Specialist pub agent John P Younge, who is handling both sales, explains that the Old Stand leasehold sale arises from a 35-year lease from March 1997 which has about 14 years to run. The landlord, Dublin City Council, recently secured a 16.7pc rent increase to €122,500 and there are five-year rent reviews.

The purchasers will also have rights to renew the lease on similar terms to the existing lease and these renewal rights are one of the factors which enhances the value of the lease.

Located on the corner of Exchequer and Saint Andrew Street at the junction with trendy South William Street, the property rises to four storeys and comprises bar areas extending to 98 sq m (1,054 sq ft) on the ground floor, a basement with cellar and kitchen extending to 61 sq m (659 sq ft) as well as three upper floors each with about 93 sq m (1,000 sq ft) of storage.

Purchasers, the O'Malley brothers, already own a number of Dublin pubs including The Yacht in Clontarf and The Autobahn on Glasnevin Avenue.

Meanwhile Mr Younge has set November 22 next as the closing date for best and final offers for Davy Byrnes at 21 Duke Street, Dublin, a two-storey, over-basement premises which is being sold as a share sale.

Almost all of the property is held on a 900-year lease dating from 1991 at a rent of £10, or less than €13 a year. A section of a rear passageway is held on a 50-year lease at €20,000 a year dating from 2013.

Both the ground and first floor of the premises extend to around 139 sq m (1,500 sq ft) each while its basement extends to about half that floor area.

John Ryan of CBRE says that one of the features of this year's pub market has been the sale of bars for alternative uses. He cites the impending sale of Kiely's of Donnybrook for which Knight Frank had been guiding €5m and which has been marketed as a development site.

Meanwhile in Mount Merrion the development company Oakmount, headed by Paddy McKillen Jnr and Matt Ryan, just this week brought another pub/restaurant - Kennedy's Bar and Union Café - to the market as part of a larger development property which includes the former Stella Cinema, also known as the former Flanagan's furniture store and car park.

With frontage onto Deer Park and two other roads, the 0.76 hectare (1.88 acre) site is considered to have potential for up to 193 apartments and 282 sq m (3,035 sq ft) of commercial space. Knight Frank is guiding more than €32m for it.

Suburban pubs on large sites have come back into the crosshairs of developers following the upsurge in demand for residential properties including build-to-rent projects.

For instance, Brady's Castleknock was sold with planning permission for 36 apartments for more than €3m, and The Black Horse Inn, Inchicore for more than €2.5m.

The biggest pub deal of the year so far also had development potential and includes investment properties. Loyola Group, headed by Brian O'Malley, bought Baker's Corner licensed premises for well over its €5m guide price.

To date Loyola has focused on the pub and restaurant trade rather than property development.

John Ryan who handled the sale says Baker's Corner pub extends to 1,180 sq m (12,700 sq ft) and comprises a ground floor lounge bar, public bar, a catering kitchen and an off-licence. Its first floor accommodates a function room, stores and offices and it also has a cellar. Outside is a smoking area and car park with over 100 spaces.

Also included in this sale was The Forge investment property comprising three retail units, two office units and three apartments generating more than €150,000 in annual rents. One of the tenants, Paddy Power bookmakers, pays annual rent of €80,000.

Loyola saw off publicans, developers and investors who were also interested in the 0.5 hectare (1.235 acre) property which is zoned 'Neighbourhood Centre'.

John Younge says another feature of the market has been development activity by publicans themselves as some, such as Gleesons of Booterstown, have added on bedrooms and some have become inns.

Charlie Chawke, who has nine pubs, said in an interview recently that he plans to develop a hotel and apartments at The Goat pub site in south Dublin.

Despite the return of developers and investors to the market, the number of pubs selling this year looks set to fall below the 31 which sold in 2017 and the 35 in 2016 when turnover topped €67m following the sale of the Camden de Luxe hotel complex.

Nevertheless the average price has increased by about 50pc from an average of €1.18m in 2017 to €1.775m so far this year.

John Ryan says this increase is encouraging and also reflects the better trading conditions being experienced by established publicans.

Another south Dublin pub to sell this year saw a group of private investors headed up by John Martin acquire their first pub, Stillorgan Orchard, for well over CBRE's €3.25m guide price.

Renowned for its thatched roof, the mainly single storey premises extends to around 650 sq m (7,000 sq ft) which accommodates a lounge bar, cafe bar, a large catering kitchen and storage areas, two smoking areas and a car park with capacity for 50 cars.

Investment pubs to sell were the Eagle House Glasthule and Karma Stone, Wexford Street.

Indo Business

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