The State Property Fund initiates propose to increase the minimum guarantee fee for participation in real estate lease auctions in airport passenger terminals to 40 subsistence minimums
This initiative is a response to the crisis observed during the auctions for the lease of premises in airport passenger terminals.
Regarding the extension of the lease agreement of a ticket offices of Turkish Airlines
Thus, on December 2, 2020, an auction was held to extend the lease agreement for a room on the third floor with an area of 10.3 sq. m of the passenger terminal "D" of the Boryspil International Airport. The current tenant is Turkish Airlines Inc.
The starting price of the lease at the auction was equivalent to the amount paid by the current lessee for the last month of the lease under the ongoing agreement and amounted to UAH 12,925.76. As a result of the auction, the rental price rose to UAH 150,000, which was offered by the winner of the auction. Link to the auction - https://bit.ly/373V7zo
The current tenant refused to exercise his pre-emptive right to renew the lease agreement at a new price set at the auction, which would have increased for him almost 12 times.
At the same time, within 3 working days, as required by law, the winner of the auction signed a protocol of completion of electronic bidding, however, in the future did not enter into a lease agreement. Similarly, the contract was not concluded by the auction participant, whose bid was the second largest.
The unscrupulous winners of this auction lost the amounts of registration and guarantee fees, which in this case amounted to UAH 472.30 and UAH 25,851.52, respectively, for each. These amounts were received by the state budget, and those who made the highest bids but refused to enter into a contract also lost the right to participate in subsequent auctions for the lease of the same premises.
However, the issue of extending the lease agreement of Turkish Airlines has not yet been resolved.
Regarding the attempt of Skyap Airlines LLC to obtain at the auction premises for air ticket offices
On November 24, 2020, an auction was held on the lease of a part of the premises of the passenger terminal "D" Boryspil International Airport with an area of 10 sq.m. This is a new lease agreement, not its continuation.
The starting rental price was determined as 1 percent of the residual book value of the premises and amounted to only UAH 5,131.41. The winner of the auction, a individual person entrepreneur, raised the cost of renting this object to UAH 85,700.01. The second place was taken by Skyap Airlines LLC, which offered 1 kopeck less. As a result, both participants alternately refused to sign the protocol on the completion of electronic bidding within the statutory period. Link to this auction - http://bit.ly/3cYQoTf
Both winners of this auction lost the amount of registration and guarantee fees, which in this case amounted to UAH 472.30 and UAH 1,051, respectively. These amounts were received by the state budget. They also lost the opportunity to re-participate in the lease auction of the same leased object.
The example of these auctions reveals a lease problem among airlines, in particular, that both current and potential tenants of real estate in airport terminals may face.
Unscrupulous bidders, who, taking advantage of rather low amounts of guarantee fees, participates in auctions without much expense, win them, raising their rates dozens of times, and eventually refuse to enter into lease agreements.
The State Property Fund offers a solution
In order to prevent participation in auctions for the right to lease real estate at the airports of those dishonest persons who pursue the goal of disrupting the auction, the Fund initiates amendments to the Procedure for Leasing State and Municipal Property to establish an increased guarantee fee for participation in auctions.
If the airport is interested in the winner of the auction being the airline and not any other bidder, given the need to prevent deterioration of the operating activities of the airport and airlines, the landlord will exercise its right to limit the possible purposes for which the winner may use the premises.
In particular, the re-auction for the extension of the lease of the premises in which the ticket offices of Turkish Airlines are located, will contain an additional condition that the winner of the auction will be prohibited from using the leased premises for:
• placement of health care facilities, pharmacies, veterinary clinics, medical laboratories;
• location of food and trade establishments (except for ticket sales);
• placement of currency exchange offices, ATMs, vending machines, telecommunications, business entities that provide communication and Internet access services, sales of printed products;
• placement of luggage packing points, travel and real estate agencies, recreation areas for passengers.
Although the law does not allow determining the specific purpose for which the object can be used by the tenant, it is allowed to define up to 5 groups of purposes that are prohibited for the tenant. In this way, the range of permitted activities is significantly narrowed. In particular, the sale of tickets will be included in such a range of permitted activities, and other activities most common in passenger terminals will be banned.