There is a gold rush under way in the sizzling Dublin pubs market, which is swinging like a prohibition-era speakeasy.
Sales in bars rose 5.5 per cent last year, according to official State statistics, but that arc soared far higher in Dublin. The Licensed Vintners Association (LVA), which represents the capital's publicans, estimates growth in the city was in the "high single digits", as pubs enter their fourth year of solid improvement.
The price of city pubs is skyrocketing, and everyone from boomtime property developers to US private equity houses are piling into the sector. In a throwback to the last boom, pub barons are back in vogue.
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This time round, who are they?
"Some of the big names from the last boom, such as Charlie Chawke and Louis Fitzgerald, are still there," says John Ryan, director of the hotel and pub division of property agents CBRE. "But now there is a new, younger cohort. The sector has its mojo back."
In the city centre, the most active investors currently are the Press Up Entertainment group, the Mercantile Group, and, latterly, NolaClan.
Paddy McKillen Jr’s Press Up, whose near 30-strong group of bars, hotels and eateries includes high-end concepts such as the Stella in Rathmines and the Vintage Cocktail Club, is by far the largest and most acquisitive on the scene.
It recently bought Residence on St Stephen’s Green, which will reopen in April. This year, including hotels and restaurants, Press Up will open up to nine new venues across the city, including ambitious redevelopments such as the three-storey Aungier House and new builds like the Devlin hotel in Ranelagh.
Press Up is asset-hungry and lavishly funded. The group, whose sales last year topped €52 million, appears to be ultimately controlled by Isle of Man companies linked to McKillen’s developer father, after whom he is named.
At the top end of the bar market, Press Up’s biggest rival is the emerging NolaClan group, which in December opened 9 Below, a reservations-only bar on St Stephen’s Green that aims to deliver five-star hotel-style service. Pints cost €8.
This week, The Irish Times revealed that Alan Clancy, NolaClan's founder, has linked up with major developer Jerry Conlan to fund its assault on the city.
Conlan has taken a stake of more than 25 per cent in the group, whose big hits include House on Leeson Street and Xico on Baggot Street. NolaClan wholly or partially owns about 10 venues, including some outside Dublin, but it has firm plans for more in the city, particularly in the white-hot Dame Street locale.
“Alan is an ideas guy: he loves devising new bar concepts,” said one industry insider. “In recent years, he has tried to buy anything that moves.”
Leaseholds
Clancy, who has been funded by Kish Capital and Warren Private, also owns shares in at least six pubs outside of NolaClan. Unlike Press Up and Mercantile, he appears to prefer acquiring leaseholds, which has helped him expand his footprint so quickly in recent years.
A decade ago, the low-key Westmeath man was running a small group of pubs on Dublin's northside for Howth businessman Michael Wright.
In 2009, while the market lay moribund, they opened the Wright Venue, a cavernous 50,000sq ft nightclub in a retail park in Swords. The concept melded a kaleidoscope of ideas gleaned from a year-long odyssey, which took the two men to clubs from Beijing to Ibiza. The venue was a celebrity hit.
By 2011, Clancy had branched out on his own with Mrs Robinsons in Greystones, 15 miles outside the city, financially backed by publican Vincent O’Reilly, who sold the Graduate in Killiney for €10 million before the crash.
The following year, they picked up the lease on 37 Dawson Street (formerly Ron Blacks) for €400,000, after UK-based Argentinian steakhouse chain Gaucho got cold feet. In 2013, Clancy opened House, and the group took off.
Clancy separately owns bars in Chapelizod (the Villager), New York, Kilkenny (with Dublin GAA star Bernard Brogan) and, soon, Athlone (with Blizzards drummer Declan Murphy).
With Naas developer Conlan – one of the “Maple 10” investors who tried to save Anglo Irish Bank in 2008 – NolaClan’s focus will be on the Dame Street area, close to the group’s Oak pub.
Exchequer hotel owner Conlan, who has re-emerged from the ashes of the boom with backing from US group Grand Coast Capital, has already signed NolaClan up for a huge bar on 37 Dame Street, which used to house the Migrant Rights Centre Ireland. Conlan is also redeveloping the nearby Exchequer in a scheme that envelopes the Globe pub, which Conlan appears to have bought recently.
Conlan is separately developing two other boutique hotels in the vicinity of Dame Street with Grand Coast, both of which have bar concepts that could benefit from Clancy’s expertise.
Dame Street is in the Dublin 2 area, which is “the hottest area in the country right now for bar turnover”, says Donall O’Keeffe, chief executive of the LVA. “The city market is in terrific shape, especially with all the tourists and the national events taking place in the city.”
The seven-venue-strong Mercantile Group, which takes its name from its flagship pub/hotel on Dame Street, is investing €30 million in a refurbishment programme across the group to capitalise on the boom in tourists and locals.
The flagship hotel will soon be redeveloped, with the number of rooms rising to 100, while the venue’s frontage will stretch as far as Rick’s Burgers on the corner of South Great George’s Street.
‘Superpub’
The group has just spent €4 million revamping Opium on Wexford Street. It last year refurbished iconic gay bar the George and also Nolita. This year and next, it will spend more than €4 million overhauling Café En Seine on Dawson Street, the quintessential “superpub” of the last boom and this one.
Mercantile is now wholly controlled by two Irish-American families: the Regans, who hail from Kerry, and the Breslins, originally from Kells, a few miles over the Meath border from Clancy’s hometown of Clonmellon.
Mercantile’s venues are less numerous than, say, Press Up’s, but far larger. A recent buyout of its minority partner, Danu, valued the group’s net assets at about €55 million.
The group is currently focusing its capital on refurbishing its existing portfolio, but group chief executive Pat Burke says it could still expand its footprint over time as opportunities present themselves.
“Our business never stands still . . . as consumer confidence continues to grow and there is more discretionary spending out there, people are ready to be more choosy and will gravitate to bars that have innovated,” he said.
Burke, a former senior executive at accountants Grant Thornton, personifies the more financially disciplined approach to business-building that is evident among those expanding in the city’s pub industry.
Also active in the city in recent years have been Jar owner the Loyola Group, run by Stephen Cooney (son of senior counsel Garrett Cooney) and the Bodytonic group run by Trevor O'Shea, who owns MVP and the Bernard Shaw.
Over the last year, the suburban pub market has also taken off again. There is demand from publicans in the €1 million to €2 million asset price segment, especially from family businesses looking for a second or third property.
The group run by industry elder statesman Louis Fitzgerald, owner of properties such as An Poitín Stil and the Stag’s Head, may be smaller than it was before the debt-fuelled crash that hit the sector, but he is expanding again.
With his nephew and son, Fitzgerald recently completed the purchase of the Gondola in Newcastle, west Dublin. He says it will be renamed the Annie May, after the first names of his mother and his wife’s mother.
“It is the names of the two lads’ grannies. The next generation are helping me run much of the business now. We’re on the lookout again,” says Fitzgerald.
Ryan says that many suburban pubs, especially those with car parks suitable for residential redevelopment, are now being viewed by some owners in terms of their “alternative use value”. O’Keeffe, too, says this is an increasing factor.
Builder Greg Kavanagh, for example, is said to have already acquired three such pubs, including the Golden Ball in Stepaside.
Another of the old pub barons who remained upright at end of the crash, Charlie Chawke, now sits on two of the best potential redevelopment sites: the Orchard Inn in Rathfarnham and the Goat Bar on Kilmacud road.
Perhaps the next wave of suburban pub barons will not be publicans at all, but housebuilders.
Sláinte.
