ANOTHER CHALLENGING YEAR LIES AHEAD FOR LICENSED PREMISES MARKET
04 January 2013
Over the past year we have sold more pubs than in any year since 2007, which unfortunately is not a sign of an improvement in the market but an indication of how difficult trading has become.
At the start of 2012, I acted on behalf of Bill Wolsey in the acquisition of 15 licensed premises which had been part of the MAR portfolio. This included a number of notable properties such as The Stables, Groomsport; Portaferry Hotel; Bryansburn Inn and Hillside, Hillsborough.
In 2006, I sold the Carmichael Portfolio of pubs to MAR and now six years later I am again involved with the Carmichaels who bought back The Stables, Groomsport, Groomsport Inn and The Bryansburn Inn. It is good to see them return to the market, particularly since they always had a reputation for good food at an affordable price. Needless to say, none of the above sales came to the open market which is very often the case in today’s market.
The fact that licensed premises are changing ownership is encouraging as old, tired pubs can be revitalised with new management carrying out refurbishment and introducing different themes. An obvious example is the former Hunter’s Bar on the Lisburn Road, rebranded by Beannchor as Cuckoo , which is doing a roaring business.
Over 90% of the sales completed in the last 12 months have been due to Receivership/Administration disposals with a majority of the properties closing without trading accounts. While most of these licensed premises have ceased trading due to a decline in business, some operators have been overburdened with debt due to other ventures within the property sector.
Hopefully, 2013 will be a turning point where the market improves resulting in a more "natural" sale of properties. To be realistic, I am not overly optimistic that business will improve in the licensed trade and it is likely to be more of the same as the last few years. Until banks start having confidence in the future of the licensed trade, life will be challenging.
A brief list of properties we have sold this year include:
Lansdowne Court Hotel
Limelight/Katy Daly’s/Spring & Airbrake
Quayside Inn, Newry
City Bar, Newry
Boat House Inn, Warrenpoint
Jack Ryan’s, Warrenpoint
Square Peg, Warrenpoint
Fort Lodge Hotel, Enniskillen
Coast Road Hotel, Carrickfergus
Lock Keeper’s Inn, Shaws Bridge, Belfast
The Village Inn, Waringstown
The Planters, Waringstown
The Farmers’ Inn, Dunmurry
The Oak Bar, Portadown
In addition, I am selling a portfolio of 14 pubs and a commercial property, which should complete early in the New Year. Finally, on an optimistic note the demand for liquor licences has picked up over the past six months and Mark Carron and I have recently sold five licences. Obviously, these have been predominantly for the off sales business, however, it is encouraging to see that there demand exists . Indeed, for the first time in the last few years we have almost run out of licences to sell.
I know most publicans have an interest in the general property market, which has been suffering as much as the licensed trade. However, Mark Carron and I held three auctions in 2012 comprising a mix of commercial, residential buildings and development opportunities that resulted in an average success rate of 90% yielding circa £4.7 m in sales. The latest auction on 23 November 2012 was our biggest auction since we re-engaged with the auction process in September 2011 achieving a success rate of 100% as all 36 lots were sold. Our policy of pricing properties properly and as competitively as possible is attracting purchasers along with offering price certainty by publishing a maximum reserve figure. In this current market, prices are at a five-year low, which is great for cash-rich buyers and those investors who have finance in place especially since there are extremely attractive opportunities for capable purchasers.
We envisage that our next auction in the spring will maintain momentum as we are already appraising properties for clients keen to use Osborne King. With strong end of year results from the London auctions houses, we also anticipate that 2013 will prove to be a fertile year for selling and buying property by auction. Our first auction of the year will allow both vendors and buyers to close sales prior to the financial year-end. We have an extensive database of purchasers based locally and further afield and are aware that novice buyers find our auction process straightforward and transparent. Osborne King’s first auction of 2013 will take place on Friday, 22 March 2013, with a closing date for entries for this auction on 1 February 2013.