Dublin’s pub market sees record sales in 2024
Rory Browne, divisional director, Licensed & Leisure, Lisney says the licensed premises sector faces several challenges in 2024, including staffing issues, rising utility costs, VAT on food sales, group debt warehousing, and the availability of bank financing
Twenty pubs were sold in Dublin during 2024 with a total market value of approximately €69.6 million, a significant increase from 2023 when the same number of sales generated €47.3 million. What a difference a year can make.
Lisney’s Rory Browne explains the disparity in sales between the two years. “If you look at transactions completed north of €5m, there were five of them in 2024 but there were only two of them in 2023. And in 2024, there was one very big ticket which was Devitt’s [on Camden Street]. You never know when these assets will become available. McSorley’s of Ranelagh is also a good example of a high-value 2024 transaction.”
A total of 21 licensed premises were publicly offered for sale in Dublin during 2024, a notable reduction on the 34 offered publicly in 2023 and publicans accounted for 55% of volume sales last year.
Developer activity saw a significant increase in 2024, representing 20% of transactions. This increased appetite from developers was largely driven by one key transaction, the Dunnes Stores acquisition of Union Café & Kennedys Bar for €7m in Mount Merrion.
Despite accounting for only three transactions in 2024, private equity investments represented 39% of the total market value. “Private equity buyers have a very different view on the market,” explains Browne. “They are just a vehicle to make money and they have money to deploy and are looking at a certain set of criteria. It is very much profit-driven and they are only going after the high-turnover units with very strong bottom-line profits and they are continuing to run them as pubs.”
“Some recent examples of private equity sales where they are still run as before are Devitt’s on Camden Street, Foley’s on Merrion Row and The Brazen Head. They were all private equity sales but they are long-established known pubs with big turnover and strong bottom line profits but they have been bought to be used as pubs. They are using established operators already in the industry to run these pubs so the customer wouldn’t see any difference – even most of the staff could be the same and still be operated the same way,” he says. These pubs are operated by seasoned publicans to ensure nothing changes after the sale to ensure uninterrupted continuity to the business.
Retirement driving supply
Some recent examples of private equity sales where they are still run as before are Devitt’s on Camden Street, Foley’s on Merrion Row and The Brazen Head (pictured)
The main factors driving supply in 2024 were retirement and business realignment, with 80% of the sales completed publicly being retirement-driven. The lack of succession planning is an issue in the licensed trade and the next generation are not as inclined to take over family businesses as the previous generation.
Browne believes that this is probably one of the reasons that private equity is finding more opportunities. “The older stock are married to the trade but the next generation don’t want to take on the family pub because they see that there are easier ways to make money and not have to work unsociable hours,” says Browne.
According to the Lisney report, the licensed premises sector faces several challenges in 2024, including staffing issues, rising utility costs, VAT on food sales, group debt warehousing, and the availability of bank financing. The national minimum wage is set to increase by 6.2% to €13.50 in January 2025. Additionally, new labour-related measures such as statutory sick pay, increased public holidays, pension auto-enrollment, and PRSI increases are adding further financial pressures on operators.
Despite lobbying by the Licensed Vintners Association (LVA) and the Vintners Federation of Ireland (VFI) for a return to the 9% VAT rate on food sales to protect jobs, the VAT rate for alcohol has remained at 23%, while the food rate continues to stand at 13.5%. “Running a food-led business incurs significantly higher staff costs,” says Browne. “We are likely to see considerable changes in the coming years, especially as larger suburban pubs increase their food offerings, with some even trading at a 50/50 or 60/40 ratio for food versus drinks.” He mentions that some popular suburbs in South Dublin report impressively high sales on Sundays, far exceeding the weekly totals of city pubs, but notes that outside densely populated areas, business declines sharply. While food sales can drive foot traffic, they also contribute significantly to overhead costs, making it difficult for pubs in less populated areas to sustain these expenses.
Strong off-market activity
McSorleys of Ranelagh was one of Lisney’s, high value sales of 2024. It was bought by The Grand Slam Bar group made up of Noel Anderson, Rob Kearney, Dave Kearbey, Sean O’Brien and Jamie Heaslip
Off-market activity again featured strongly in the licensed premises market in 2024, accounting for 55% of transaction volume and 76% of total value. These transactions underscore a growing preference for discreet sales processes, particularly for high-profile premises for which there is known demand.
In the last year, an appetite remained for well-located Dublin city premises as seen by the sales of Bar Eilé cornering Baggot Street and Mespil Road, Foley’s on Merrion Row, Cassidy’s on Westmoreland Street, Cassidy’s on Camden Street, McSorley’s of Ranelagh, and Devitt’s on Camden Street. Of these six sales, five transacted off-market.
“The market has changed in how it operates,” Browne observes regarding the rise of off-market activity. “While off-market transactions have always existed, there is now a greater awareness of them. For instance, if I know someone who is considering retirement and I believe their pub is valuable, we might discuss a potential deal informally on the golf course, and a transaction can occur within the community.”
Debt warehousing scheme
In 2024, six of the properties publicly offered for sale were directly linked to challenges arising from the conclusion of the debt warehousing scheme. This may have been due to operators facing a number of financial pressures last year, including the 6.2% increase in the minimum wage.
Businesses that had not engaged with Revenue to clear their legacy debt or to agree PPA’s (phased payment agreements) by the 1 May 2024 were in a number of cases unable to trade out of these difficulties.
I asked Browne whether the debt warehousing scheme was really about putting off the inevitable for businesses that were in trouble after Covid? “Many people who availed of it were never going to succeed anyway,” he replied. “There was too much that they weren’t able to deal with. I don’t have any publican clients that hadn’t honoured their warehousing commitments and I’ve a lot of clients who didn’t even avail of it”.
License values remain stable
Some of the high-profile sales in Dublin of 2024 include The Queens in Dalkey
License values have remained stable throughout 2024, averaging between €50,000 and €55,000, consistent with 2023. According to Lisney, the off-licence sector has been a driving force behind the applications for new licenses, largely for the establishment of new retail opportunities, such as supermarkets and convenience stores. Demand from forecourt retailing remained at almost nil for the second year running, perhaps indicating that operators within this sector had achieved their target of licensing their existing identified stations over the past number of years.
Lisney anticipates future supply of licenses will mostly likely be from businesses that have become unviable or that are located within lesser populated locations. Typically, the delivery of licences from such sources ultimately results in a repurposing of the property for other uses.
In Q4 of 2024, Lisney noticed an increase in licensing queries posed from the Restaurant Sector of Ireland. A number of operators in this sector feel that moving from a traditional ‘restaurant’ to a ‘gastro bar’ may assist in a reduction of staff costs.
The provincial market in 2024
The provincial licensed premises market experienced a surge in activity, highlighted by several high-profile sales, particularly within the well-established provincial cities. The market saw a notable shift with the JD Wetherspoon group’s sale of four premises in Cork, Galway, Waterford, and Carlow. Of the properties offered, three were successfully transacted, achieving a total combined value 56% below the asking price – reflecting a recalibration of market expectations.
Appetite outside of populated cities and large towns remained subdued, with little demand. Closures of non-viable businesses within sparsely populated rural areas continued, and this sector of the market struggled persistently. The availability of public licenses from these locations will likely increase.
The market continued to favour well-located, quality premises in populous areas and established tourist destinations, while the future of many rural pubs remains uncertain.
Outlook 2025
The Ivy in Drumcondra was another high value sale of 2024
According to Lisney, demand in 2025 is expected to concentrate on large suburban venues and prime city centre locations, where the potential for premium pricing will offer greater flexibility to adjust prices in line with cost inflation. By the end of 2024, there were a further nine sales agreed which bodes well for early 2025 activity.
Publicans will remain as the dominant purchaser class. Developers are also expected to remain active, particularly in pursuing suburban sites large enough to accommodate the critical number of units needed to justify development. However, licensed premises sites are typically only suitable for apartment projects, and demand for such sites outside prime areas, except for social and affordable housing, has declined significantly due to rising construction costs.
The trend of off-market sales is expected to continue into 2025, particularly for high-value city centre properties. With a limited but highly active and well-funded buyer pool, these discreet transactions align with the preference of many publicans who prioritise privacy.
According to the Licensed and Leisure Team at Lisney, the outlook for 2025 is strong: “The 2024 Dublin licensed premises property market saw a steady flow of transactions, with sales volume reflecting the activity levels of 2023. We predict continued demand for city centre locations, though a softening of profitability is expected for certain businesses and trading locations. This is due to rising staff costs and increases in product prices that cannot be fully passed onto consumers. While most businesses will remain viable, operators are likely to see lower returns in 2025, which may influence decisions to sell versus hold. As a result, we anticipate a decline in demand for some suburban food-driven businesses that have had to absorb cost pressures.”
