Some 46 pubs were sold here last year worth €52.46 million or €1.14 million on average. This compares with just nine pubs sold in 2011 worth €7.11 million or €790,000 on average.
12 pubs were sold in 2012 worth €9.64 million or €800,000 on average. In 2013 20 pubs were sold worth €15.09 million or €760,500 on average.
The figures were supplied by Morrissey’s Auctioneers and Bill Morrissey points out that as in years 2012 and 2013, the average value figure can move up or down based on the price category/value of the pubs that are sold in any given year.
“That’s to say that if more of the ‘greater value’ pubs are sold in one year compared to another, then naturally the average sale price for that year will be greater” he told Drinks Industry Ireland, “however that does not mean that the value of all other pubs have increased accordingly.”
He believes that the volume of activity in Dublin has increased dramatically to more ‘normalised’ levels due to:-
- an improved and growing economy
- increased market confidence and in turn
- spending which has fed directly into the hospitality sector including pubs, together with
- improved liquidity in the market in both banking and the private equity equity sector.
“This is emphasised by the number of pubs that sold in Dublin as a percentage of the total population,” he stated, pointing out that in 2010 this figure was 0.64% increasing to 2014 6.3% (a 900% increase) with forecast levels for 2015 current year being similar to 2014 ie in excess of 40 pubs being sold.
Outside the capital
And what about pubs outside the capital?
LVA Chief Executive Dónall O’Keeffe points out that rural licensed premises numbers have fallen from 8,617 10 years ago to 7,138 in 2015 indicating a 17% fall in pub numbers or a loss of some 1,434 pubs where the equivalent fall for the Dublin area had been under 2%.
CBRE’s John Ryan recently told the Commercial Property Section of The Sunday Times that, “Rural pubs are selling for house prices really and the value of the liecence. The drink–driving laws and the economic downturn have had a major impact on a lot of premises and especially those that haven’t geared up in terms of offering food.”
While many older rural pubs, having already paid off their forefathers’ mortage, still struggle, many taking on debt over the last few years have found themselves unable to support that debt as the business is simply too small to sustain a debt, he told Drinks Industry Ireland.
“The type of pub I’m talking about is that situated well into a rural area that has a bar, restaurant and accomodation overhead but without much to offer the business in terms of clusters of houses.”
Bill Morrissey points to a polarisation in the market.
“Those pubs that are located in prime areas are enjoying the benefit of an improved and improving market condition and market value while those pubs located in sparsely populated districts or pubs that do not enjoy a good population mix are not faring as well and still face challenging trading conditions.
“They’re going to have to trade their way out and there will be a noumber of pubs that will not have this level of trade and they’ll have to close.
“In areas overpopulated with pubs, they’ll have to look at alternative use.”
The pub property figures for 2015 are due next month.