This sentiment forms part of its CBRE Ireland Outlook 2018, the 29th edition of its annual report containing finalised figures for transactional activity across the various commercial property sectors. It was published this morning at a special launch attended by over 800 at the RDS in Dublin.
As reported earlier, activity in the Dublin licensed market was more subdued than anticipated during the last 12 months, with 20 Dublin pubs totalling approximately €22 million sold during 2017 compared to 30 transactions totalling €43 million the previous year.
But with the economic backdrop up, tourist numbers up, turnover up and therefore value up, market conditions in the licensed trade are largely reflective of the strong economic and trading conditions that have encouraged publicans to remain in business, believes CBRE.
“Good trading conditions boosted turnover and profitability, leading to a corresponding uplift in the value of the underlying asset, which encouraged many publicans to continue trading,” states the report, “In addition, many publicans who might otherwise have been under pressure to sell their licensed properties, successfully refinanced their holdings over the last 12 months and are now continuing to trade as opposed to offering the property to the market.
“We expect to see an increase in the number of Dublin pub properties being offered for sale in 2018 on the basis that some publicans will want to take advantage of the considerable pent-up demand for Dublin licensed premises and use it as an opportunity to take profit and in some cases, exit the trade.”
Capital Gains Tax changes might also release sales of pubs in the capital, pointed out CBRE’s Executive Director & Head of Research Marie Hunt, who presented the report.
In the hotel sector 36 hotel sales concluded in the Irish market in 2017, totalling over €405 million between them following three years in which more than 60 hotels changed hands each year.
According to Marie Hunt, hotels were responsible for 6% of overall commercial property investment last year as hotel investment becomes a significant feature of the commercial property market.
A further five hotel properties totalling almost €160 million sold as investments during the last 12 months, reports CBRE, which concludes, “Unlike 2017, CBRE expect to see some Dublin hotels coming to the market during the 12 months”.
If this materialises the property consultants believe we could see up to €500 million of Irish hotels changing hands in 2018 with a sizeable proportion of these transactions occurring off-market.