As a result, some publicans might see 2020 as an opportune time to capitalise on the current high demand for pub properties in the capital believes commercial property specialist CBRE which released its Outlook 2020 annual report this week containing predictions for the year ahead in each sector of the Irish property market.
The prices being achieved at the moment will certainly encourage publicans close to retirement to consider their options, states the report.
“We may see an element of ‘profit-taking’ from some strategic sellers during the year” CBRE states, “but the main source of supply will be sole traders opting to exit the trade.”
While the number of pub sales in the Dublin market during 2019 was similar to the previous year, the quality of those that traded was remarkable with a number of high-profile licensed premises changing hands during the year at very strong prices. Most of the activity in the Dublin pub market during 2019 was centred on Dublin city centre pubs such as Bruxelle’s, Davy Byrne’s and The Old Stand.
Retirement from the trade was also the motivation for the sale of Uncle Tom’s Cabin in Dundrum and The Leeson Lounge in Dublin 4. “Purchasers in the main comprised existing publicans, attracted by the unique opportunity to add these high-profile pub properties to their portfolios,” states the report.
The number of pub sales in the Dublin market has remained relatively low over the last three years but the volume of transactional activity in 2020 should be broadly similar to last year, predicts CBRE.
“Demand remains strong and there is bank funding available, but purchasers remain selective and are willing to hold out for the ‘right’ pub property,” states the report, adding that, “The next iteration of pubs in the capital are likely to be contained within new mixed-use developments such as new entrant Brewdog who commenced trading in the Capital Dock scheme in Dublin Docklands towards the end of last year”.
CBRE’s report points out that some publicans are obtaining 7-day pub licences for restaurant properties without applying for planning permission for pub use.
“This is creating blurred lines around what is a pub and what is a restaurant. This is a grey area and needs clarification. We also understand that Government are intending to conduct a review of existing licensing laws concerning opening hours for pubs and nightclubs during the course of 2020.”
CBRE expects a good pipeline of hotel properties to be formally offered for sale in the Irish market during 2020 including some Dublin hotel properties. The property consultants expect sales here to mirror the volume of hotel transactional activity witnessed last year (more than €665 million) with the vast majority of hotel transactions expected to comprise single asset sales as opposed to portfolio sales. A number of the hotels that will be offered for sale during 2020 are likely to be re-trades of properties purchased in recent years.