With five Cork pubs sales closed in 2012 ranging in value for €200,000 to €1.5m, and another one or two close to completing, the year has shown a marked increase in activity compared to the previous four years.
That’s according to bar sales expert Cearbhall Behan of Frank V Murphy & Co, though he admits 2008 to the first half of 2012 “was pretty dismal.”
Deals done in 2012 include Instinct on Sullivans Quay, BSide Bar, Bandon, Oscar Madisons in Kinsale and Kennedys on Blarney Road, as well as the Viscount deal for over €1.5m which completed in 2012.
Mr Behan says the level of transactions in the licensed sector in Cork city and county significantly increased in the latter half of ’12, mostly via bank or receiver sales, and “which typically lack certified figures, trading history and goodwill.”
Turnover in the bar sector was down about 30% and “the main difficulty facing the sector is that many licensed premises purchased from 1999 onwards were based on certain levels of turnover being achieved. However, turnover levels have declined by an average of 30% and now many businesses are unable to sustain the existing level of borrowings.”
The drought of finance available for bar purchases “continues to create downward pressure on licensed and commercial property values, with the majority of purchasers unable to secure bank finance,” notes Mr Behan.
As a result, where there is viable demand for city centre and suburban pubs, most operators opt to lease rather than purchase, he adds.
The food element of the trade “continues to gather momentum as we adopt more of a European attitude toward food and alcohol, with many larger premises incorporating food within their business model.” However, bars in rural areas without food continue to see a sharp decline in alcohol sales, mainly due to drink driving legislation as well as emigration or employment shifts.
Below-cost retailing of alcohol has increased market share between off-sales and on sales with the off-licence sector now accounting for nearly 50% of alcohol sales, says Mr Behan, leading to price wars in the off-licence sector between the main supermarkets. Most bar licences are selling for €65,000 to €70,000.
Details: Frank V Murphy & Co, 021-4274204
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