On-trade

11 Dublin pubs sold last year

Even in a year where the pub trade was effectively closed down, 11 licensed premises were sold in Dublin, states Lisney auctioneer in its 2021 Outlook.

 

 

"The supply of pubs for sale will remain limited, at least in the first half of the year" - Lisney.

“The supply of pubs for sale will remain limited, at least in the first half of the year” – Lisney.

It’s clear that the pandemic has hit the licensed and leisure industry sector of the economy the hardest, with trade volume in pubs down by 75% in 2020, according to the Central Statistics Office.

In its Outlook 2021 report Lisney points out that, “The three main drivers of turnover in pubs are tourists, nearby workers and nearby residents. For city centre pubs, the first two cohorts have been absent from the market due to travel restrictions and remote working while the resident population in central areas is relatively low.

“In the suburbs, businesses have benefited from people being at home, spending more time in their local area and possibly having greater levels of discretionary spend, albeit restricted in numbers by Social Distancing.”

Lisney also points out that for the limited time premises were allowed to open last year many traded well, averaging about 70% of previous levels in well-populated areas.

Certain government supports have assisted the industry and it’s likely that more supports will be introduced over the course of 2021, states Lisney.

However despite the pandemic 11 Dublin pubs transacted in 2020 (six in Q1, three in Q2 and one each in Qs3 & 4)  with a further seven ‘sale agreed’ or with contracts exchanged and remaining to close in 2021 at the end of December.

The 11 Dublin sales comprised Grainger’s on Meath Street, Murray’s in Kilmainham, The Sackville Lounge on Sackville Place and Madigan’s on Abbey Street Lower (both forming part of a larger property acquisition), The Magic Carpet in Cornelscourt, The Old Storehouse in Temple Bar, The Black Forge Inn in Drimnagh, Ruin Bar on Townsend Street, The Dark Horse (plus commercial investments) in Blackrock,  The Queens in Dalkey and the Investment Interest in JK Stoutman’s on James Street.

“This is reflective of the fact that publican appetite to acquire high-profile and established licensed premises will remain, albeit possibly constrained by lending availability in the short-term,” states the report, “Those well-resourced will be keen to engage with sales processes for the right opportunity.

“In addition to traditional demand, requirements from well-capitalised funds has emerged recently. These funds are targeting the upper-tier of the Dublin city market and have a preference for scale, seeking established pub groups or alternatively, acquiring several high-value premises simultaneously. The recent sale of The Old Storehouse in Temple Bar to one such fund is an example of this demand and we’re aware of other funds actively reviewing Dublin city opportunities.”

Lisney continues, “While this demand is positive, the sales process was more protracted in 2020, often with closing dates delayed and this could be the case again this year. Furthermore, there were sales that fell through (such as The Concorde on Edenmore Avenue and Becky Morgan’s on Grand Canal Street), likely victims of ill-timing due to Covid.”

This, along with the perceived lack of purchasers in the market, impacted on many potential vendor’s confidence, “… fearful that offers will be opportunistic and low. As a result, several vendors that had been considering offering their business for sale deferred their decision and are waiting until later this year when they believe there will be more certainty. This will mean that the supply of pubs for sale will remain limited, at least in the first half of the year”.

Lisney points out that deals will continue to occur off-market and the emergence of international investment in the sector will be particularly positive and could push the value of the market well ahead of previous years.

The auctioneer predicts, “The market trends from 2020 will remain in the opening months of this year with perhaps more positive trading conditions emerging in Q2 and into Q3. With the vaccine likely to be rolled-out in the coming months workers can start returning to offices (albeit likely on a more agile basis) and Social Distancing precautions are likely to become less stringent over time, allowing for greater levels of trade. In terms of a recovery, some pubs will bounce back quicker than others with well-populated areas doing better than those relying on tourism. Hotspots such as Temple Bar will take longer to get back to pre-Covid levels of trade.

“Sadly” it concludes, “there will also be sales as a result of the financial impact the pandemic has had on smaller scale publicans. Some will decide not to reopen and potentially retire while others will not be in a financial position to reopen. This may lead to redevelopment opportunities, particularly outside of Dublin.”

 

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