Iceland property with active volcano goes on the market

Reykjavik, Iceland

OWNING a private island is so passé. Get an active volcano instead.

The Icelandic family that owns a plot of land where a volcano emerged in March has received offers from prospective buyers interested in developing the site for tourism.

"I know this is for sale for the right price and we have already gotten at least two offers," co-owner Anna Thordis Gudmundsdottir said in an interview.

She is one of 19 heirs who own the farm property known as Hraun.

Thousands have flocked to see the eruption. Some have even tempted fate and barbecued hot dogs on the lava.

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The fascination with the volcano, which could remain active for years, is expected to turn the site into the country's hottest destination, literally, when tourism returns.

The landowners have worked with authorities to secure safe access for the public and have no intention to limit foot traffic on their land unless safety is compromised.

Icelandic law has for centuries protected people's right to pass through privately owned land on foot.

Still, increased tourism before the pandemic had sparked a debate about landowners' right to collect entrance fees from visitors to many of Iceland's natural treasures located on private land.

Prime Minister Katrin Jakobsdottir told a local broadcaster that the state is not planning to buy the land, but that potential new owners of the land would not be allowed to limit public access to the site.

"The state is putting funds toward securing construction and access, but the pre-condition is that the public's access will be ensured," she said.

The government has earmarked 70 million kronur (S$749,612) of public funds to build infrastructure and surveillance at the site.

Landowners do have an undisputed right to collect a fee for services provided on their land, providing lucrative business opportunities around sought-after tourist attractions.

The current owners expect the site will eventually have a service centre and a parking lot, and that exclusive licences will be issued to tourism companies to drive to the eruption site or land nearby with helicopters, said a memo sent to the minister of tourism.

The land has been owned by the same family for generations. Ms Gudmundsdottir said the family has considered selling the land over the years, although it has never been advertised for sale.

Her cousin Sigurdur Gudjon Gislason, the chairman of the Hraun landowners' association, told a local television station last week that the interested buyers are open to buying part of the land or all of it.

He did not want to discuss the asking price.

Geologists have said the eruption could last a long time, even years. It is barely an hour's drive from Iceland's capital and largest city Reykjavik and even less from the airport - plus a brisk one-hour hike - so it is conveniently located to become one of Iceland's top destinations.

It is also right around the corner from Iceland's famed Blue Lagoon.

The new eruption and Iceland's containment of the pandemic has already brought back some tourists. Hotel stays by foreigners in April almost tripled from a year earlier, showed latest statistics.

Ms Gudmundsdottir, speaking for herself, said she does not have any use for the land and is not interested in getting into the tourism industry.

"I would like someone else to build something nice up there for the public to enjoy," she said. BLOOMBERG