Capital gains
Belfast may not have the tourist pull of its southern Irish rival Dublin, but as Michelle Perrett found, it has a lot to offer.
Stag and hen parties flock to Ireland's capital Dublin for a bit of the "craic" and party atmosphere but few would consider hitting Northern Ireland's vibrant capital of Belfast.
Since the ceasefire in the troubled province there has been a change in the fortunes of the city. The city centre, which was previously out of bounds during the night because it was a potential terrorist target, has been opened up and style bars such as The Apartment, Bar Bacca and Irene and Nans have started to appear.
The traditional entertainment areas of Lisburn Road, Great Victoria Street and Dublin Road are continuing to thrive and Ireland's first out of town retail entertainment centre The Odyssey has opened.
Belfast even put itself forward as European City of Culture. Although it has not made it through to the second round entering at all was something that was unthinkable five years ago.
Guinness and Six Continents have left the market selling their pubs on to other operators in Belfast. Botanic Inns, the largest pub company in the region, now has 12 pubs. This may not be massive by UK standards but for Northern Ireland - which comprises of mostly owner-operated outlets - it marks an important development.
The city has an estimated catchment area of one million people and has 30,000 students - giving it a large number of potential customers.
Surprisingly, the city and the whole of Northern Ireland has a declining number of pubs. Under Northern Irish law, pub licences are renewed every five years but there is no legislation to allow for the granting of new licences.
Five years ago there were 1,643 pubs in the province but this is expected to fall as some pubs close and others fail to renew their licences.
Licences can be transferred to alternative premises within certain regional limits. This means that licences are valuable commodities, with some reportedly going for up to £250,000 and that's even before an operator has purchased a property.
In England and Wales increasing numbers of pubs are transferring from managed to tenanted and property agents are crying out for good quality freeholds but the trend in Northern Ireland is for pubs to be bought freehold.
About 97 per cent of pubs are freeholds with tenancies and leased operations being the exception rather than the rule. Pubs in Belfast can be expected to change hands for anything up to £5m.
Nick Rose, from property agents Gerald Eve, says: "Licensed property values in Northern Ireland are the best performing across the UK. It's an old fashioned attitude that leasing is dead money. It's a freehold market - it's owner-occupied."
But John Martin, leading property agent at Osborne Clarke in Belfast, says the price of pubs is pretty stable in the province.
He said: "There will always be price increases for quality pubs in Belfast but in general there has not been an increase."
Mr Martin also believes that the whole region is already saturated with pubs. Competition in the industry is intense.
There has been no increase in tourism since the ceasefire which means that all pubs are competing for the same amount of business.
He said: "The customer has a great choice and it keeps everyone on their toes.
"The market is going to be competitive over the next 12 months with a lot of pubs trying hard to hold onto the business they have.
"If you're not fast and efficient you will lose the business to someone else."
He believes that the new Odyssey centre, the first out-of-town, mixed-use retail scheme, will take business away from the city and will dilute the market.
The Odyssey Centre is a 200,000sq ft leisure centre just outside Belfast which boasts a number of restaurants and bars, an ice rink which is home to the Belfast Giants Ice Hockey Team, a 12-screen Warner Village cinema and Ireland's first Hard Rock Café.
Richard Green, from leasing agent Insignia Richard Ellis Gunn, says that the new development was slow to start because it was a new concept for the country but business has picked up with the last unit about to be let.
"The unique aspect of the Odyssey is that it has four licences," he said.
Operators are reported to be paying in excess of £25 per sq ft in the scheme and Ultimate Leisure, the nightclub operator, is about to open an 11,000sq ft Beach nightclub, its first move beyond mainland UK.
Indications are that other mainland operators have also been looking at the scheme.
But Ultimate is not the only England-based operator to open in the province. JD Wetherspoon has nine sites in the province and plans to continue its roll-out to a target of 50. This comes despite "operational problems" at some of its sites.
Although some mainland operators are looking at Northern Ireland for potential sites the whole licensing and property situation makes opening a large capital investment for any operator.
The market in Northern Ireland and in particular Belfast is expected to remain competitive over the next year with the cost of pubs and licences remaining at premium rates.
But the province is continuing to develop with a large range of bars and new style operations opening.
It could become the new tourist destination and be as renowned as Dublin for being a party capital.
Related articles:
JDW boss rubbishes Northern Ireland expansion claim (30 January 2003)
