Subscriber OnlyBusiness

Car parking at Dublin Airport is big business, so why has the sale of the unused QuickPark facility stalled?

Many parties are interested in buying. But the longer the stalemate persists, the greater the likelihood of bidders drifting away

The former QuickPark car park beside Dublin Airport. It has 6,122 long-stay parking spaces but a sale process for the facility, owned by property developer Gerry Gannon, has stalled

Barry J Whyte
Wed Jun 26 2024 - 06:00

As recently as last week Kenny Jacobs, the chief executive of the DAA, was keen to let the public know there was no problem with parking at Dublin Airport.

He told the Oireachtas committee on transport that it was not “that big of a drama”, that people were booking early and thus securing parking, and that a third of all passengers came by public transport anyway.

It was a point he reiterated the following day on Pat Kenny’s radio show on Newstalk, telling him that there were “plenty of long-term spaces available for people going away for a week or two weeks”.

For added reassurance he said that the airport authority was applying for planning permission to build even more car parking space, one for staff and two more to expand their existing car parks for passengers.

READ MORE

All of which should’ve settled the question, had the DAA not gotten a blow last week from the planning authority, with Fingal County Council telling the airport authority that it would be hard to support more parking for its staff car park – the first one for which it submitted an application – because of the “national policy shifts towards a greater emphasis on public and sustainable transport modes and a shift away from private car use”.

The justification for the proposed car parking spaces as being replacement parking spaces “was not strong enough to support the proposed quantum of parking”, the council noted.

It puts a severe crimp on the airport’s ambitions to grow its revenues, even with more people getting to the airport by public transport.

And it puts even greater focus on property developer Gerry Gannon’s currently unused car park on the Swords Road – the former QuickPark site – which has almost accidentally become a piece of vital infrastructure for the airport.

The site, which Jacobs himself has described as “the best car park in the whole campus”, has also become the subject of a ferocious battle between a host of well-funded bidders interested in purchasing the facility and cashing in the huge demand for car parking at Dublin Airport.

With another busy summer travel season set to push the airport’s car parks to their limits again, many are asking what is blocking such a deal.

That battle to buy the former QuickPark site has raged for more than two years, since it was first put up for sale in 2022.

In the original sales prospectus, the attractiveness of the asset was obvious – it was the only privately-owned car park close to the airport, with 22 per cent of all long-term parking capacity. With no further car parks permitted under airport planning conditions, it was an alluring investment.

With the DAA seeking permission to increase the present annual passenger cap from 32 million to 40 million, the bidders could be forgiven for seeing it as a licence to print money.

They will probably have been aware of the details of the lawsuit between Gannon and his former tenant on the site, John O’Sullivan, who operated it under the QuickPark brand. As part of that dispute, the details of just how much the car park was making emerged.

As the court case revealed, it was generating enough cash that O’Sullivan could pay Gannon, as the landlord, a cumulative €16 million in rental payments between 2014 to 2019.

It piqued the interest of a great many bidders, who clearly saw the €70 million guide price as value for money.

Among the bidders were Euro Car Parks led by David Cullen, an Irish investment company called Innovest, and Joe O’Leary of BMOL Financial, and Pat Crean of the Marlet Group. Rumours circulated at the time that Noel Smyth, the solicitor turned property developer, had been interested in the site, but there was never any confirmation as to whether he put in a bid.

The car park was also of huge interest to DAA. Jacobs told the Oireachtas transport committee last week, that car parking will be a critical part of the airport’s revenue mix over the coming years.

Jacobs said that with State-owned DAA sitting on €815 million in debt, it needed to drive its non-aeronautical revenue, which makes up the majority of its revenue in Ireland.

“Driving non-aero revenue for us means selling more car parking spaces, lounges, fast-track, duty free products, foods and beverages and everything else we can sell to passengers at Dublin and Cork,” he said.

While the DAA doesn’t break out how much it makes from parking in its annual review, some information is available in its bond documents.

In 2015, when it had 22,902 spaces in Dublin and 4,014 in Cork, its full year’s revenue from car parking was €36 million, which constituted 5 per cent of its revenue. In 2019, the last full year before the pandemic, when Cork had 4,299 spaces and Dublin had 22,538, its revenue was up to €59 million. So income from car parking had risen by 64 per cent from fewer spaces.

Clearly, adding the 2,600 or so spaces from the QuickPark site would have been a substantial boost to that revenue figure.

DAA’s bid for QuickPark was successful, with a deal announced in the autumn of 2022. However, the Competition and Consumer Protection Commission (CCPC), the state’s competition watchdog, quickly moved in to investigate.

Earlier this year it blocked the deal on the basis that it would “likely to lead to higher prices for consumers because DAA would not have to compete to win car parking customers”.

Since then, the unsuccessful bidders have re-entered the fray. Several people to whom The Irish Times spoke have been in touch with the vendors or their agents attempting to find out when the process will reopen. At least one, Pat Crean of Marlet, has submitted a fresh bid, believed to be above the original asking price of €70 million.

To date, the process has remained curiously stalled, with little information coming out from any of the parties involved.

The significance of such a vacuum is more than just the effect on the ability of a number of wealthy investors to buy a lucrative asset, it’s about the availability of parking for Dublin Airport users, and the existence of a healthy price competition at peak times.

On capacity alone, the airport has several times this year found itself bumping against the limits of its car parking spaces, and not just in its short-term car parking spaces but also at times in the long-term car parking lots.

That led to a brief flirtation between the DAA and Gannon over the possibility of a short-term lease for the busy summer months. The CCPC even issued a formal notification that such a short-term lease would trigger no competition issues, provided it remained short term.

However, the proposal seems to be off the agenda and even the usually voluble Jacobs seemed to be at a loss to explain why.

“I do not think that process will go forward now. I understand the vendor withdrew because it may not be able to let us do it,” he told the Oireachtas committee.

Was Gannon simply not minded to do a deal with the DAA, Sinn Féin TD asked him? Or was Gannon simply not inclined to do a short-term deal with anyone? “My understanding is it is with anybody, not just us,” Jacobs answered.

He added that Gannon “is still actively looking to sell it”, though several interested parties have expressed confusion at that statement when compared to the brick wall that their queries are meeting.

The Irish Times contacted Gannon this week to ask why the short-term lease deal with the DAA fell through, as well as whether the site was still “actively” up for sale, and whether a formal process or private sale would be pursued. He did not respond before publication.

The vacuum of information has produced a stalemate in the process, with many of the interested buyers questioning the willingness of the supposedly active seller to actually sell.

In a statement provided to The Irish Times, David Cullen of Euro Car Parks, said: “We are puzzled as to why the car park remains closed with no sign of it returning to the market. The banking environment is much changed since it first hit the market and credit has reopened since then. We believe there is more interest than previously so would expect the car park to be back for sale in the near future.”

Another person familiar with the deal believed that the longer the stalemate persisted, the greater the likelihood of bidders drifting away.

“Capital will always find a home – it doesn’t sit around and wait. Investors are not going to sit and wait, especially with lack of clarity of visibility as to what will happen,” this person said.

“There is a thing called deal fatigue. When something has been around the block three or four times, maybe the investors will say, ‘I saw that before; maybe it’s gone a bit stale’.”

DAADublin AirportPat CreanGerry GannonKenny Jacobs