Market on the up as 13 city pubs achieve €14m in total
DEALS totalling more than €14m have been done for 13 Dublin pubs this year and most of those have been bought by private buyers rather than major companies, according to research by the Irish Independent.
With two British pub chains and a Northern Ireland player now exploring the Dublin market, it looks even more promising for publicans wishing to retire, or for banks that wish to recover some of their losses.
However these new competitors, who include British chains JD Wetherspoons and British brewery group Greene King, are encountering competition from private buyers who are believed to have outbid them already for a number of sales this year.
Agent Bill Morrissey, who is currently completing the sale to Wetherspoons of the 40 Foot in Dun Laoghaire and The Tonic in Blackrock, Co Dublin, at prices around the €1.5m mark, points out that private buyers have also become active in the market.
He recently agreed a deal for the sale of the Thomas Read pub on Dame Street in Dublin and he points out that it is a private buyer rather than a pub chain that is buying it. He declined to comment on the sale price but it is believed to be between €2.5m and €3m which is comfortably over the €2.2m guide price which he had been quoting for the property.
This deal includes two pubs each with high profile frontage onto Dame Street and Parliament Street as well as 10 apartments.
Morrisseys have sold a majority of the pubs in Dublin this year including The Belgard Inn in Tallaght which is believed to have achieved around €2.5m but it is understood to have been bought for redevelopment by a discount retailer rather than a publican.
The agent also sold Rosie O'Gradys pub in Harold's Cross, Dublin for around €1.7m but here the value was probably influenced by the development prospects offered by the large car park and adjoining retail premises.
On Dublin's northside Morrisseys sold The Kinsealy Inn for around €900,000. As many as seven pubs sold for around the €1m plus mark including Russells in Ranelagh, where the agents CBRE achieved around €1.8m.
John Ryan of CBRE points out that this year's sales are well down on the 2007 average sale price of €5.8m. Ryan believes that the market for well-located Dublin city centre pubs is currently helped by the growth in tourism numbers.
However both he and Bill Morrissey agree that most "locals" are still suffering from the depressed levels of consumer spending as local residents don't have the money to spend because of negative equity or unemployment.
Nevertheless Morrissey says that prices have bottomed out and have improved for prime units in city centres.
The recovery also appears to be reflected in recent pub sales by Allsop Space. In July it sold Nancy Hands, Parkgate Street, Dublin 8, for over its €650,000 to €700,000 guide price.
However unlike most of the sales this freehold public house may be considered more of an investment property as it is let for 25 years from 2008.
Also in July Allsop Space sold The Excise Building, in the IFSC for over their €650,000 guide price.
Including pubs outside Dublin, these newcomers sold 27 public houses in the 12 months to July this year with a combined value of €8.7m and they plan to offer three more at auction next month, two of them in the midlands.
CBRE is also bringing a number of pubs in the Greater Dublin Area to the market in the near future. These will include The Salmon Leap Inn in Leixlip, which is currently closed but because of its 0.8 acre site could appeal to a British pub chain wishing to redevelop it. In its current condition its asking price may be around €200,000.
John Ryan also expects that others which are likely to come to the market could include The Player's Lounge in Fairview, the Deadman's Inn in Lucan, and The Belfry in Manor Street, Stoneybatter, Dublin 7.
Among those which Morrisseys is expected to bring to the market are The Meetings, in the popular tourist village of Avoca, Co Wicklow, a pub, bed and breakfast and craft shop with residential accommodation which has a €550,000 guide price.
Allsop Space spokesman Robert Hoban says that while its recent pub sales attracted interest from overseas buyers and UK pub chains the latter were outbid by private buyers.
The firm has introduced a new service whereby it will offer larger pubs and other commercial properties for sale by private treaty initially to allow prospective buyers more time to consider all aspects of the business.
Meanwhile John Earley of Property Partners Earley also reports a pick-up in activity in the small towns in the west of Ireland as families are availing of the much keener prices for well-located premises to go into business.
His agency sold 14 pubs in the past year with prices ranging from €105,000 up to €247,000. Earley says a combination of good value for money and a renewed market interest from families in well-located premises has rejuvenated what was a relatively slow market up until now.
The agent's stock of pubs currently on the market include the Kilbride Inn which is at final offers stage which has a €100,000 guide price and Charlie's Bar, Church Street, Roscommon town, with a €160,000 guide.