THE smoke is clearing from the smoking ban fall-out, and a measure of reason has been restored to the Irish pub market.
After several years of rampant price inflation and trading in pubs, the ban on smoking in the workplace hit pubs - and die-hard smokers hardest. But, just as Irish society adapted to the detox fatwa, the licensed trade has begun to change it ways too.
Bars have literally had to clean up their act: more are doing more and more food and adding value and variety to their bills of fare, and bars have to compete for custom with wine bars, cafe society, hot chocolate shops and eateries providing convivial meeting points on the street, under awnings and warmed by gas heaters.
Bar sales picked themselves up off the floor during 2005: high selling examples included Waterford's Muldoon. selling for €10 million, Cork's Bishopstown bar, selling for €6.5/€8 million, depending on various reports of the private deal, and the highlight sale, the whopping €20 million-plus paid for the Old Orchard Inn in Rathfarnham bought by publican Charlie Chawke. It included three investment units and an acre site with development scope.
CB Richard Ellis Gunne reckon that the total capital value of the pub market in Dublin was €142 million for 37 sales, with the average price of a Dublin pub increasing to €3.8 million, up from €3.1 million the previous year.
"The results would indicate a growing level of optimism re-emerging within the industry which is by all accounts beginning to rally after many months of doom, gloom and negativity," said John Hughes of CBRE Gunne.
A Glenageary pub the Deerhunter sold for about €5 milion, forming part of a redevelopment site "and reflects the fact that as land values escalate in the Irish market, many publicans are now discovering that their pubs and car parks may have higher alternative use value in certain situations," noted Mr Hughes.
Dublin trophy sale of the year was the Victorian masterpiece the Stag's Head, bought at auction by pub veteran Louis Fitzgerald for €5.8 million after very competitive bidding.
Around the rest of the country there were significant pub sales as well, at price to match all but the biggest Dublin acquisitions. Kinsale bars bounced back with the Folk House making €3 million, bought by property developer Gerry Gannon who also bought the Bulman, 2004 Pub of the year, for €2 million, while agent Maurice Cohalan completed a local trio of sales with the Shanakee also making c €2 million.
In Cork city centre, bar sales included Westimers for €3 million, The Manhattan and O'Flaherty's making over €2.5 million each, the Deanrock over €3 million, Redz for c €4 million, the Lakelands in Mahon for over €2 million, and the Goat Broke Loose for c €4 million, as part of a site assembly.
"The market is quite buoyant, especially at the top end in high density population areas. The Smoking Ban is now seldom mentioned in transactions," said pubs estate specialist Frank V Murphy, adding that licences were selling for €160/€170,000.
Other strong sales included Muldoons in Waterford for c €10 million, Axis Mundi, also Waterford, for €3.5 million, the Ivy Inn, Naas c. €3.75 million, PV Fallons, Longford c. €6 million, O'Riains, Killarney for €2.25m, Corner House, Clare €2.3m, Five Lamps, Naas for over €2.5m, Drogheda's The Thatch for €3 million, Maloneys, Tuam €1.85 million, The Tudor Inn, Blessington for €2.08 million.
"2006 looks set to be another year of considerable sales activity for the licensed property market. Building on the emerging confidence and bearing in mind the anticipated momentum in consumer spending following the release of funds from SSIA savings accounts, the prospects for the trade look promising," said CBRE Gunne's John Ryan, predicting another round of debate on codification of the licensed trade.