Inn was tops at £5.5m Baggot
While some spectacular prices were achieved on the Dublin pub market in 2000, like the much talked about £5.5 million for the Baggot Inn in May, it was also a year when unrealistic price expectations meant that a slew of pubs were withdrawn at auction.
A total of 38 pubs have changed hands in the capital, compared to 45 last year. Suburban pubs ranked among the highest sellers this year: the Grange in Deansgrange sold for £4.3 million at the end of January and the Millennium bar in Swords fetched £4.15 million. Auction sales were abysmal this year - only two pubs sold at auction in the first half of the year, Slatterys in Capel Street for £2.25 million and the Tap in Phibsborough for £1.26 million. According to John Ryan of Gunne Auctioneers, that trend continued in the latter half of the year. "Only three or four sold at auction, including the Wicked Wolf in Blackrock for
£3.8 million and Cassidy's in Stillorgan for £3.45 million." Post-auction sales were relatively high, at 42 per cent compared to 15 per cent last year, according to Morrissey's.
KCR House in Kimmage sold after auction for close to £4 million in October and the Laurel Lodge in Castleknock fetched £3.9 million in June post-auction. A combination of factors led to some publicans bailing out of the business. "Interest rates moved upward and the last quarter point rise corresponded with the Intoxicating Liquor Act 2000 which meant longer hours, additional staff and not necessarily the additional turnover. There was also the Government price freeze and the Mandate staff pay deal which meant higher wage costs," said Bill Morrissey of Morrissey's.
These market conditions produced a fresh batch of properties on the market with vendors harbouring over-optimistic price expectations. At the same time, banks began to tighten their lending belts.
Auctioneers say the market is still strong but prices are levelling. Bill Morrissey predicts limited growth next year, particularly if profits are squeezed by increasing interest rates and spiralling labour costs.
City centre "in" pubs catering for the young are doing well, and although planners are now reluctant to give permission for more, a large number of sophisticated venues - such as Dakota, Viva, Cocoon, AKA, Fireworks and Coyote - have opened in the past year.
The single state-wide licence area brought in under the Intoxicating Liquor Act 2000 in July has meant that it is possible to transfer licences from rural areas or towns to a major population centre. As a result, the value of Dublin licences has dropped from between £200,000 and £700,000 to £120,000-£150,000, and rural licences have shot up from £70,000 to £120,000.
Approval was recently granted for a licence transfer from Ballina, Co Mayo to 64 Dame Street, now Jasko's restaurant, where Kevin Fitzsimons and Pat Whelan plan to open a licensed premises.
While the new legislation is designed to bring pubs to areas which are "underpubbed", few believe that the legislation will lead to a glut of new pubs on the market. Planners want pubs of 2,000 to 3,000 sq ft in the middle of housing estates, whereas publicans generally want a premises on the periphery of two or three estates. The exorbitant cost of building a pub is also a factor.
Auctioneer John Younge does not foresee a total deregulation of the pub trade. "The new act has freed up the licensing market, but there is still the matter of building a premises and obtaining planning permission. In theory, deregulation is all very well, but in practice, the planners and Gardai do not want to see a free-for-all in the high street."