| Bulk of 2010 pub sales likely to be 'insolvency ca |
 Less than one per cent of licensed premises in the Dublin market changed hands last year, reflecting the cautiousness in the property market at present.
At 0.64 per cent of the total in the Dublin area, only five licensed premises changed hands in 2009, according to the Licensed Premises Review of 2009 from Morrissey’s Auctioneers. This contrasts with the best year for pub sales over the past 10 years - 2006 - when 4.77 per cent of pubs in Dublin changed hands.
Two of the 2009 five were sold at between €2 million and €4 million while another two were in the €4 million to €6 million bracket and one was in the €6 million to €8 million league.
Activity last year was down 16.5 per cent on that for 2008, returning a huge 81.3 per cent decrease in activity compared to the 10-year average for licensed premises sold.
The auctioneering company reports that the capital value of the Dublin licensed trade market has dropped to €22.1 million from €34.5 million in 2008, a 36 per cent fall reflecting “reduced market activity together with the fall in capital values compared to previous years”.
At its peak - 2006 - the capital value of licensed house transactions/sales in Dublin stood at €180.3 million.
There was a 23 per cent fall in the average price achieved for a licensed premises in the capital from €5.76 million in 2008 to €4.42 million last year, still well above the average prices being achieved from 2000 to 2004 (€3.14 million to €3.16 million).
“This average figure is however somewhat distorted due to the type of and the limited number of properties which were sold in 2009,” adds Morrissey’s.
All Dublin sales last year were by private treaty where this only accounted for 29 per cent of all Dublin sales in 2000, the majority of the others being sold post auction at that time.
Licence values themselves also fell to between €65,000 and €75,000 compared to the €175,000 being paid just two years ago.
This reduction in value is a direct result of the fallback in demand from the off-trade sector, according to the company, “... together with the realisation that there is a natural oversupply of licences available in the market. The recent increase in supply to the market is due to a number of licensed premises ceasing to trade which had become non-viable due to current economic conditions”.
As for 2010, the company anticipates a slow start to the year with the market continuing to adopt a ‘wait and see’ approach.
“The first tranche of impaired property loans should be successfully transferred into NAMA by the end of Quarter One followed by additional transfers which will go a long way to stabilising the Irish banking system and making available a much-needed injection to the economy which should in turn stimulate the market,” states Morrissey’s, “We are of the view that the worst is perhaps over and a floor will be firmly established in the market in 2010 with an increase in activity in the market as the year progresses, albeit with reduced prices being achieved in comparison to previous years.
“We expect that the bulk of the activity will be insolvency cases as a result of businesses getting into difficulties which are over-geared and have suffered a sustained reduction in the volume of trade.” |
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