DAA has been told its bid to buy land between the airport runways is “not acceptable and therefore rejected”, in a move raising the stakes in a sale critical to its future.
Brothers Ulick and Des McEvaddy and three co-owners put the 105-hectare landbank up for sale in May, hoping to realise €210 million or even more from their property in the centre of airport grounds.
A successful DAA bid would block another party from taking control of lands crucial to its long-term growth.
But as the sale enters the final stages, the owners’ estate agents have dismissed a bid from the State airport operator and said they are pushing ahead in talks with another unnamed bidder.
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There was no comment on Wednesday from brothers Brian and Luke Comer – the Co Galway property developers who control the Comer Group – on reports linking them to a bid.
The land comprises three adjoining lots held by the McEvaddys and fellow-owners Seán Fox, and Brendan and Orla O’Donoghue.
Keen to avoid being seen to pay a “ransom” price, the DAA is said to have tabled a bid in the region of €75 million.
Although that bid of July 28th was far ahead of previous DAA proposal to buy the land, the McEvaddy estate agents Jones Lang LaSalle (JLL) have said it was insufficient.
In a letter to the DAA on Tuesday referring to its bid and “subsequent conversations”, JLL said: “Having reviewed same with our client, we can confirm that your offer is not acceptable and therefore rejected.”
It added: “We have now received client instructions to proceed with another party. We would like to thank you for your interest in our clients lands and for partaking in the process.”
The DAA acknowledged the letter but indicated it was not withdrawing its bid. “DAA is still interested in buying the land and our offer remains on the table at a realistic valuation,” said a spokesman.
“DAA has made a sensible commercial offer but won’t pay crazy prices.”
[ DAA ‘still interested’ in purchase of land between Dublin Airport runwaysOpens in new window ]
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The DAA has serious concerns as a public body about the risk overpaying for farmland with no planning approval, even though it is zoned for airport use.
Although the sale comes amid concern the airport will soon reach capacity as travel recovers after the pandemic, senior airport figures insist a new terminal won’t be needed for 20 years.
As interest rates rise, all bidders face steep repayments on any loans to fund the purchase of airport lands that are unlikely to yield any financial return for many years.
The cumbersome planning process and time for construction work mean that any new owners face a long wait before any return on what would be an inherently speculative investment.
Senior airport figures believe such considerations may constrain rival bidders. However, the value and certainty of the offer from the other unnamed party remain unclear.
The DAA also has the option of pursuing a compulsory purchase order, deploying sweeping powers to buy the land without owners’ consent if it is deemed to be needed for public infrastructure in the common good.
That option is complex, however, with limited control over the outcome and a relative absence of flexibility over the price. The price to be paid for land under compulsory acquisition is often settled by arbitration, a process lacking certainty that can end up before the courts.
In a recent report, the Law Reform Commission said “arbitrators do not have to abide by set procedures or guidance, and this can result in a lack of predictability and consistency for owners and acquiring authorities.”
