Monday, January 24, 2011

Only five pubs sold in Dublin last year | The Post

Only five pubs sold in Dublin last year
23 January 2011 By Samantha McCaughren Business Correspondent

Only five pubs changed hands in Dublin last year, with values reaching a new low as investors and banks went cold on the sector.

The total value of deals was less than €5 million, compared with €180 million at the height of the market in 2006 – when 37 Dublin pubs changed hands.

The low value of the transactions was partly because three of the sales in 2010 were for leasehold interests, not for the premises themselves. Auctioneers Morrissey’s said that the total value of transactions fell from €34.55 million in 2008, to €22.1 million in 2009 and €4.85 million in 2010.

The average price for a pub was just under €1 million last year, down from €4.4 million in 2009. One of the five pubs which changed hands was Pravda in Dublin 1. It was taken over by businessman Brian Montague who reopened it in October as Grand Social.

He also bought the nearby Winding Stair restaurant and bookshop, as the three businesses were being sold in a package after the Thomas Read pub group went into receivership in 2009.

Pravda was sold by Morrissey’s on behalf of Martin Ferris, the receiver for the Thomas Read Group, as was Ron Blacks on Dawson Street.

The other three pubs sold last year were the Parnell Mooney on Parnell Street, Residence on St Stephen’s Green and The IN in Dalkey. However, prices paid for licences increased slightly throughout 2010, mainly due to a reduced supply of licences available for transfer.

These are mainly bought for off-licences. Values rose by around €35,000 throughout the year, with prices in December ranging from €75,000 to €85,000, but still a long way off their peak of €175,000 in 2007.

Bill Morrissey of Morrissey’s said the optimism this time last year had proved to be unfounded.

‘‘The expectation that the market was bottoming out with green shoots on the horizon by the end of quarter one did not materialise. The challenge for the licensed trade throughout 2010 was again to continue to reduce operational overheads and, at the same time, maintain volume of trade," he said.

Potential sellers and buyers found it difficult to gauge ‘maintainable turnover’, given uncertainty surrounding the pub trade which made it difficult to calculate valuations. Prices paid at the close of the year ranged between 1.5 and 2.5 times’ net turnover, compared with 1.75 to three times’ net turnover in 2008/2009.

Less than 1 per cent of the Dublin market changed hands for the third year running, compared with the ten-year average of around 2.65 per cent.

The market trends seen in Dublin were mirrored in the rest of the country. But Morrissey said that the rural market was harder hit than cities and large towns, with continued reports of pub closures – the bulk of which were in sparsely-populated districts.

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