Nama has turned up the heat on Dunnes Stores over the retailer's alleged blocking tactics in relation to a €40 million extension of The Square retail centre in Tallaght by filing a lawsuit against Dunnes over the row.

The High Court case filed this week marks the first time that the State property agency has directly challenged Ireland's biggest indigenous retailer in court.

Dunnes, headed up by Margaret Heffernan, has a fractious relationship with the agency, which has previously only backed its developer clients in disagreements with the company, rather than suing Dunnes itself.

National Asset Property Management (NAPM), the Nama subsidiary that takes direct ownership of properties rather than merely loans, has hired A&L Goodbody, one of the State's biggest corporate law firms, to represent it in its row with Dunnes over the delays.

Nama is financing the extension for The Square, one of its prime remaining retail assets, the redevelopment of which Dunnes argues will disadvantage its anchor store at the back of the atrium in the original shopping centre.

Dunnes has already legally mired the proposed extension, which would add 200,000 sq ft of new retail space and a six-storey car park, with a judicial review challenge to An Bord Pleanála’s decision 12 months ago to sanction it in the face of Dunnes’ objections.

That case is up again for mention later this month. However, NAPM this week escalated the row by seeking a High Court declaration over Dunnes’s actions, raising the possibility that its executives could end up facing off against Ms Heffernan in court for the first time.

The Square Management Company and Indego, the controller of the centre, are also named as plaintiffs in the suit.

South Dublin county councillor Mick Duff, also a Labour general election candidate, strongly criticised Dunnes for allegedly holding up the scheme.

“We badly need The Square redevelopment for the people of Tallaght,” he said. “I look forward to a swift conclusion to this and for building work to start as soon as possible.”

No comment

Nama was unavailable for comment while Bernard Hamill, a property asset manager who was installed to run The Square when Nama seized full control from Noel Smyth two years ago, declined to comment.

Dunnes, which has a policy of not interacting with news media, had not responded to a request for comment before publication.

With the retail recovery under way, a redevelopment would maximise the value of the shopping centre if Nama were to choose to offload it in future.