The licensed property market in Ireland has seen unprecedented growth over the past number of years. The demand coupled with the shortage in supply of quality
licensed property saw the market achieve record prices.
In recent years, pub prices have increased by as much as 200% in some cases. This was very much in vogue in the early nineties; presently this can be as high as five times. This trend is set to continue into the future with existing pub owners being the main purchasers of most quality properties that come to the market.
First time buyers find it increasingly impossible to enter the licensed trade market, as a single individual would find it extremely difficult to secure the finance necessary for such a venture. The traditional practice of the bar person being able to purchase his or her own pub after working their way through the system has ceased to exist. It is now mostly existing publicans with the necessary equity wanting to expand their portfolios who snap up most of the prime licenced properties today. People looking for a good investment are now looking to the licensed trade, the continuing favorable low interest rates, 50% reduction in capital gains and high profit margins make this sector very attractive to the astute investor. Partnerships/shared ownership is now manifest among today's licensed fraternity. This approach has become extremely popular. It enables would be publicans to enter the market by being able to raise the necessary collateral and thus minimise any risk. This is an ideal opportunity in the short to medium term to create equity and help to foster further investment opportunities. Properties occupying prime locations in big cities such as Dublin, Cork, Limerick and Galway are most in demand as capital values continue to increase. Our flourishing tourist trade and vibrant economy are the main factors propelling this burst of growth in the licensed trade and this is most evident in the bigger cities.
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