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Pub sales on the increase as sector bounces back

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Thomas Reads in Dublin sold for some €3m

Thomas Reads in Dublin sold for some €3m

Thomas Reads in Dublin sold for some €3m

Close to €40m worth of pubs and restaurants have been sold or are at sale agreed at present, in the latest sign of renewed interests in the hospitality sector.

Data from pubs specialist Morrisey's shows the firm has sold properties worth a total of €16.5m in recent months, with another €23.5m in bars and restaurants currently with terms agreed but yet to formally close.

Among the high profile pubs to exchange ownership has been Thomas Read's, which went on the market last year with an asking price of €2.25m but ultimately sold for €3m.

That pub, along with the adjoining The Oak bar, which was included in the deal, was the last of the former Thomas Read chain of pubs, which was run by the late Hugh O'Regan.

While Thomas Read's was the most valuable sale in euro terms, there have been a number of other significant deals in the Dublin area and further afield.

Bellamy's was one of the best known bars in south Dublin, thanks to its close location to Lansdowne Road and the RDS.

The pub went on the market for about €825,000 last January but was eventually bought for an estimated €1.3m by a conglomerate including Irish rugby internationals Jamie heaslip and Rob and Dave Kearney.

The pub has since been renamed and reopened.

The pub market was disproportionately hit during the downturn, with the on-trade contracting by an estimated 20pc between 2007 and 2011. However Morrissey's Rory Browne said the market was beginning to level off after years of decline.

"Throughout 2014 the Dublin Licensed Premises Property Market has born witness more towards stabilisation than recovery which has been facilitated by less restricted access to loan finance thereby affording prospective purchasers the ability to be more active within the market," he said.

"Morrissey's have witnessed a notable increase in both the appetite and demand for well-located Licensed Premises that afford potential for future growth and development of the business. This increased level of demand is illustrated through a larger volume of enquiries for premises offered for sale than had previously been experienced which has also had a direct correlation through to a greater volume of inspections being made and in turn offers submitted than had heretofore been experienced.

"This current stabilisation has assisted in the introduction of renewed confidence with more traditional "private" instructions now coming on stream whereas in recent years the market had been predominantly led by insolvency related instructions," he added.

Other pubs to have sold in the last few months have been the Forty Foot in Dun Laoghaire which was bought for €1.5m, while The Station House in Raheny on Dublin's northside went for an estimated €1.1m.

"The renewed market confidence is experienced against the backdrop of the insolvency related cases which were a contributory factor to sub-par returns thereby influencing weaker Capitalising Ratios and Price Earnings Ratios," said Mr Browne.

"The foregoing events have facilitated reinforcement of the markets belief that transactions are now realigning with more traditional activity and in a somewhat stabilised environment than was previously in force.

"Looking forward we anticipate the Dublin Licensed Premises Property Market to witness an increase in activity through bona-fide owner-operator / private led instructions thereby illustrating vendors renewed confidence and belief in a recovering environment which will in turn generate further activity and assist in yielding stronger returns," he added.

Activity so far has been largely restricted to the Dublin market but there are now hints of movement in the provinces. Morrissey's report the Master Deery's pub in the centre of Monaghan town was bought for more than €1m while a number of smaller deals have also gone through around the country.

Even so, Mr Browne sounds a note of caution on the state of the market outside the major urban centres.

"Activity and demand within the provincial market has however not been wholly mirrored by that of the Dublin Market with the appetite for Licensed Premises being limited to centrally positioned operations within established towns and cities that enjoy a strong resident population complemented by a resilient commercial environment," he noted.

The pipeline for sales is now seen to be increasing sharply in Dublin, however. As much as €23.5m worth of deals are currently at "sale agreed" but are yet to be formally closed out. Beyond Morrissey's, other agents are also reporting strong growth in the pub market, with fewer sales now taking place on the instructions of a receiver or in a similar distressed manner.

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