THE Dublin licensed property market in 1996 will be remembered as a vintage year for pub property prices with some exceptional results being achieved. The pent-up demand for well-located, quality licensed premises continued unabated throughout the year.
The demand, coupled with the limited supply ensured that record prices would be paid for the pubs which matched market demands and expectations. Stable interest rates, a buoyant economy and the availability of finance at very attractive rates encouraged the sector.
In addition, the demand for well-located properties also ensured that the cumulative capital value of the market this year will be about £40 million - a dramatic increase on the previous year when the cumulative capital value was about £18 million.
The Dublin pub market got off to a brisk start with a number of substantial pub sales during the first quarter of the year - sales which were to set the tone for the rest of the year. The Stillorgan House was purchased for £1.35 million by Noel Cassidy of Cassidys Roost, Maynooth. Mr Cassidy is at present creating a new landmark licensed premises for south Dublin which will open shortly.
As a result of this purchase Louis Fitzgerald acquired Cassidys Roost for about £1.4 million.
In a private deal, the Sean Quinn Group acquired The Castle Inn, opposite Christchurch Cathedral and this, too, has recently re-opened having been extensively remodelled. A number of other notable sales occurred during the first quarter culminating with the sale of Fagans in Drumcondra for £1.31 million.
What was to emerge at the end of this first quarter was a new level of confidence in the trade. With interest rates at their lowest level for almost, 20 years and the economy buoyant, all "positives" returned to the trade and it was in up-beat form. The "feel good" factor once again returned to our pubs with trade volumes increasing for the first time in many years.
The total beer market grew in volume by around 2.5 per cent, with nearly every sector within that market showing positive growth. Most notable increases in volume were in the cider market, which grew by nearly 20 per cent and the long-neck bottle market which grew by over 13 per cent. The advent of the alcoholic fruit drink proved to be very popular, especially among the under-25 drinking set. Of course, the margins which these products yield is also very attractive and margins generally within the trade have improved during the year.
Demand for licensed premises continued to strengthen and some excellent results were achieved during the summer. The Harp Inn, Swords, was sold for £1.9 million at auction and was purchased by David and Mary Grant of the Beneavin Inn, Finglas. Subsequent to this purchase, The Beneavin was acquired by Niki O'Hara of The Cat and Cage, Drumcondra, for in excess of £1 million. The Red Windmill in Phibsborough sold for £1.13 million and the summer season concluded with the sale of The Purty Kitchen, Dun Laoghaire, for £2.025 million.
However, the sales in the final quarter of the year were to prove of vintage quality. The Finglas Inn achieved £1.85 million at auction and was a good indication of the overall strength of the market.
This sale was preceded by the highlight sale of the year - the famous Kehoes of South Anne Street - which attracted unprecedented interest. The property was sold for £2.01 million to well known publican Louis Fitzgerald, who acquired it for his son. This purchase represents a new focus for the Fitzgerald Group, acquiring a small premises with limited development potential.
The price paid reflects the growth in popularity of city centre premises. This popularity has been assisted by the success of The Temple Bar area and the knock-on effect to adjoining city centre streets. The Temple Bar area has witnessed the arrival of many "yes" pubs in the past 12 months. The Porterhouse Brewing Company opened its doors on Parliament Street. Temple Bar is now littered with top quality pubs - The Front Lounge, Turks Head, Thomas Read and the recently revamped Norseman, to name but a few.
The level of investment has been considered and ongoing. Louis Fitzgerald has created a "new" pub with the opening of The Quays pub, a former warehouse on Temple Bar Square. The licence for this pub was transferred from the former Crane public house opposite The Oak.
Martin Keane has expanded the ever popular Oliver St John Gogarty and Tom Maguire has impressively rebuilt The Foggy Dew. The Temple Bar pub is currently under reconstruction and due to open in the New Year. There are many other pubs in the area, all of which have benefited from the cluster effect and the increase in competition.
A notable feature of pub life this year was the number of premises which now have a late-night licence. Over the past number of years, social drinking habits in the Dublin area have undergone major changes. Dublin is now a cosmopolitan European capital city and the third most popular tourist destination. As a consequence, the demands for greater flexibility in the hours of trading have grown. There is a consumer led demand for longer opening hours.
A Dail Select Committee is currently reviewing the licensing laws and has heard submissions from all interested parties on the matter. This committee's report will be eagerly awaited by the trade.
What demands the trade will face in the future is hard to forecast. However, the market is looking forward with renewed confidence and the tangible evidence of this feeling of confidence is the competition among existing publicans to purchase a second or additional licensed premises.
The coming year augurs well for the trade. Those who are considering selling can look forward to a market in 1997 where there are a considerable number of active buyers with finance available. What those buyers need is supply - supply of quality properties in the right location. 1997 should prove to be yet another interesting year in the licensed trade.
