The 30th edition of CBRE’s Real Estate Market Outlook 2019 was launched in the RDS this morning at the company’s annual seminar at which Marie Hunt, Executive Director & Head of Research explained that 2018 pub sales in Dublin had been lower than anticipated for the second year running although the average pub value had increased year-on-year.
However the underlying trade conditions are good, she added, boosting pub valuations with many operators deciding to stay on in the licensed trade to take advantage of the increase in trade.
The report finds that around 19 pubs were sold in the capital last year with a combined capital value of €32 million. This compares with €24.5 million from 24 pubs in 2017.
“Strong economic performance together with bumper tourist activity have provided a welcome boost to the pub trade and in turn pub valuations, encouraging many publicans who might otherwise have considered exiting the business to continue to trade,” states the report.
Publicans are also able to access finance and can refinance or refurbish their premises, so many are reluctant to sell leading to the lower volumes sold last year.
This year, CBRE expects to see several pubs changing hands for alternative use but for those continuing with their business, CBRE is of the opinion that the recent VAT increase “will ultimately be absorbed by Dublin licensed premises and is likely to have a more significant impact on pubs in provincial locations”.
The report concluded that the main buyers of Dublin pubs in 2019 are likely to be some of the newer groups to have emerged in recent years seeking to grow their portfolio.
Wetherspoons has also indicated its intention to recommence purchasing pub properties in the Irish market this year.
While hotel sales volumes were indeed up in 2018, they were lower than anticipated. Some 34 hotels worth €730 million were sold last year and similar transaction volumes are expected this year.
However unlike last year, CBRE expects some city centre hotels to be traded and a steady increase in hotel values in Dublin, Cork, Kilkenny and Killarney can be expected.
In addition, 1,300 new hotel rooms were opened in Dublin in 2018 but CBRE expects between 1,500 to 1,700 to come onstream in this coming year.
“But we’re unlikely to see sites being bought for standalone hotels,” said Marie Hunt.
The event was opened by Myles Clarke, CBRE’s incoming Managing Director and the guest speaker on Brexit was Fine Gael Senator Neale Richmond, the Seanad’s Spokesperson on European Affairs who put the blunt realities of a no-deal Brexit before nearly 800 attendees.