Average price of Dublin pubs falls again

Twenty licensed premises changed hands in 2013 in the Dublin pub market, according to Morrissey's Licensed Premises Property Review 2013 & Outlook 2014 .

This represented 2.74 per cent of the number of Dublin pubs and is up from under 2 per cent in 2012 and 2011, but down from peaks of over 4 per cent at the height of the boom. But 2013’s turnover was still above the 10-year average of 2.29 per cent.

Transactions in the Dublin market were up 66.67 per cent compared to 2012 and the overall capital value of these increased by 56.53 per cent from €9.64 million to €15.09 million.

The average sales price in 2013 decreased to €0.76 million compared to €0.8 million in 2012, reflecting a greater number of licensed premises that had ceased trading compared to 2012.

Of the pubs that sold, most (70 per cent) were transacted by private treaty while just 10 per cent sold at auction and the remainder by tender.

“Demand from purchasers was for premises which are well located with an established population nearby and good transport links,” according to Morrissey’s.

The agency says there is still an oversupply of pubs nationally and that continued consolidation of the pub stock will remain a factor going forward but this would "ultimately contribute to a recovery of the industry". There are currently 7,400 licensed premises in Ireland together with 1,000 hotels. Since 2007 there has been 11 per cent decline in the number of licensed premises nationally and this trend looks set to continue over the short to medium term as there is not enough demand to sustain the current pub population.

In Dublin, Morrissey’s estimates that the number of licensed premises has declined by 5.8 per cent, with numbers now standing at 730.

By the close of 2013, according to Morrissey’s, there were signs of stabilisation in certain sectors of the pub market, with anecdotal evidence of trade stabilisation and some growth but this is dependent on the product offering, management and the location of the pubs in question.

However, the industry faces strong headwinds, principal among these is the ongoing decline in bar sales. The cumulative decline in the volume of trade over the past five years is estimated nationally at 34.2 per cent. Some 75 per cent of the sale of alcohol in Ireland was through the on (pub) trade in 2001 but this is now down to 45 per cent.