Dublin's licensed property experienced yet another record year, with average prices for a pub rising from £1.5 million in 1998 to £2 million.

Smyth's, in Haddington Road, sold in September for £3.35 million, marking a record ratio of 6.2 times its turn-over of £538,000. The Blue Haven, in Templeogue, which made £3.05 million, sold at a ratio of 5.4 times turn-over.

John Hughes from Gunne Commercial's licensed and hotel division described 1999 as a "truly exceptional year". "There is still huge demand for Dublin pubs. The outlook for next year is also good. With capital gains tax still at 20 per cent, those publicans who are thinking of retiring are going to be encouraged to go to the market," he said

During the year, the Gunne Commercial agency experienced an increase of pub-owning groups increasing their portfolios. The Break for the Border group increased its position with the acquisition of the O'Dwyer brothers' portfolio, which includes the George, Bad Bobs and Zanzibar, for a reported £16.5 million.

The new group, renamed Capital Bars, increased its holding of Irish bars from four to 10, including O'Dwyers on Mount Street, the Rathmines Plaza Hotel and Savanah Bar, the Trinity Plaza Hotel and Fireworks Bar, on Pearse Street, which is due to open in February.

Mr Hughes also pointed out that the Competition Authority report of almost a year ago, which said there should be more licences in the capital, has had "no material effect" on the licensed market. "There is still a long road to go before the demand for pubs will be reduced."

The clearest indication of how the market held up was seen in the sale of the Chancery Inn, on Inns Quay. The pub sold for £905,000 in 1998. When it came to the market again this year, it achieved £1.3 million, Mr Hughes pointed out.

Other sales concluded during the year included: Whelans, of Wexford Street, Dublin, which fetched around £3.5 million; Polly Hops, Lucan, £3.6 million; Coopers, in Abbey Street, around £3 million; Cassidy's, in Camden Street, around £2.75 million; The Cock Tavern, Swords, £2.2 million; The Hill, Ranelagh, £2.2 million; and the Rathcoole Inn, Rathcoole, which made £2 million.

The concentration of interest continued to be in suburban pubs but Gunne Commercial pointed to a marked increase in interest in city centre premises. Sales in the city centre included O'Looney's, Christchurch, which sold for £835,000; the Millennium Bar, Parkgate Street, which sold for £980,000; and Fitzer Reids, Amiens Street, which sold for £1.7 million.

In the first six months of the year sales remained high, fulfilling expectations that 1999 would be another record year in the market, Gunne Commercial reported. July saw record breaking prices with the sale of the Blue Haven, Templeogue (£3.05 million) and Polly Hops, Lucan (£3.6 million).

During the year, low interest rates and capital gains tax remaining at 20 per cent continued to encourage interest by purchasers which, in turn, encouraged owners to bring businesses to the market.

Prices held up outside Dublin as well. In August, a record £1 million was paid for The Valley Lodge, in Carrickmacross, Co Monaghan.