how the froth blew off the pub sales market
The glass is more than half empty as punters and incomes drain away
Dublin's Thomas Read Group grew into a chain of more than 20 pubs as Ireland's economy boomed in the mid 1990s. After property prices collapsed and drinkers stayed at home, the bars are being sold off.
A receiver, who has the power to sell assets to recover debt, is seeking buyers for nine of the city's most fashionable hostelries.
The bars on the block include Ron Black's, home to the Champagne Bar during the boom; and the Harbourmaster in Dublin's financial district, minutes walk from Citigroup and JPMorgan Chase offices.
"The sale of the Thomas Read pubs will be an acid test for the market," said John Ryan, director of hotels and licensed premises sales at CB Richard Ellis Group in Dublin.
In a country famed for its pub culture, the industry is mirroring the rise and fall of Irish fortunes.
Pubs surged in value as Ireland transformed into one of Europe's richest countries from among its poorest, with developers snapping up buildings to refurbish and cater to free-spending Irish drinkers or convert into apartments.
Property brokers now estimate prices for pubs have sunk as much as 40pc with Ireland suffering the worst collapse in its modern history.
The benchmark ISEQ stock index has lost 48pc over the past 18 months, with pub supplier C&C Group, the maker of Magners cider, dropping 37pc.
"At the height of the Celtic Tiger, it was a different process entirely -- there would be full auction rooms with any sort of a decent pub," said Aidan Heffernan, an auctioneer at Dublin-based Sherry Fitzgerald Group.
"The day is fast coming to an end when we would have 15 or 16 pubs in a town."
Last month, Mr Heffernan sold the Royal Denn pub in Athboy, northwest of Dublin, for €470,000. Six years ago, the owners rejected a €750,000 offer, saying it was too low.
The sale of the Thomas Read pubs and one restaurant will be a better gauge of the collapse of the market, said Mr Ryan.
Only one Dublin bar has been sold publicly so far this year, he said.
Six changed hands last year, less than 1pc of the total number of pubs, dropping from 4.8pc in 2006 when more people wanted to get into the trade, according to Morrissey's, the auctioneer handling the sale of Thomas Read.
Bill Morrissey, who is overseeing the sale, has said he has received more than 30 "solid"expressions of interest.
Thomas Read, which started life as one pub in 1991, sought protection from creditors in November last year. It controlled 13 bars and restaurants in Dublin and another eight bars at the city's airport, the company said.
After it failed to find an investor, a receiver was appointed in March on behalf of ACC Bank, the Irish unit of Dutch lender Rabobank, according to documents lodged at the Companies Registration Office in Dublin.
The documents don't say how much ACC is owed.
The problems for bars are not confined to Ireland. London-based Regent Inns, the owner of the Walkabout pub chain, was put into administration on October 20.
In Ireland, sales are tumbling as unemployment edges beyond 12pc and taxes rise. That's amplifying a trend toward drinking at home, started by the 2004 ban on smoking in public places.
Bar takings fell 13pc in August from a year before, according to the central statistics office.
"The bar trade here is incredibly challenging," said Andrew Richards, head of the Irish unit of Britvic, which sells fruit juices and sodas to pubs.
"People are much more mindful of their spending than in the past."
At least 4,800 pub jobs were cut in the past year, the Vintners Federation of Ireland said in an August report.
Demand for bars as sites for homes is also evaporating.
In 2006, a developer paid about €12m for a north Dublin bar to turn into apartments overlooking Dublin Bay. The site is still idle awaiting the start of work.
Three years on, home prices are down 25pc and the Government is creating asset management agency NAMA to purge lenders of souring property. That's leaving estate agents looking for any signs of life in the market.
"If they sell and make satisfactory prices, it will be a big boost," Mr Ryan said of the Thomas Read sale.
"The boy meet girl thing is always there, and Irish people like to go out."