PRESS STATEMENT – 4 January 2018

PRESS STATEMENT – 4 January 2018

 

NAMA has today issued an end-of-year summary of progress made in 2017, and since its inception, on a number of its key objectives and targets. Highlights include the following:  

  • 100% of government-guaranteed NAMA Senior Bonds now redeemed – final €2.6 billion of the original €30.2 billion senior debt issued was redeemed by end-October 2017. This means that, in 2017, NAMA achieved its primary objective and eliminated the associated contingent liability of Irish State over three years earlier than originally envisaged.
  • Since inception, NAMA has generated over €40.5 billion in cash and, subject to favourable market conditions prevailing, it currently expects to return a surplus of €3 billion to the Exchequer by the time it completes its work in 2020.
  • NAMA’s Residential Delivery programme has continued to deliver new homes in the areas of most demand in 2017. It is estimated that 7,200 units have been delivered between 2014 and end-2017 through NAMA funding. An additional 9,500 units are under construction or have planning permission with another 8,500 units to have planning submitted during 2018.
  • Major progress has been made on sites within the Dublin Docklands SDZ area with over 90% of sites having full planning and strategies in place. NAMA retains an interest, through its receivers and investment partners, in sites with the capacity to deliver 3.3m square feet of commercial space. Of this, some 57% is under construction and a further 30% has planning permission. Additionally, construction has commenced on 480 residential units in the Docklands area and planning permission has been granted for a further 900 residential units.
  • Over 2,400 social housing units have been delivered by NAMA to end-2017, excluding those provided under Part V arrangements.

Senior Debt Redemption

 

During the course of 2017, NAMA redeemed the final €2.6 billion of its government-guaranteed senior debt. €30.2 billion of senior debt was originally issued by NAMA in 2010 and 2011 to acquire bank loans and, when issued, it was intended that this debt would be redeemed by 2020. The final redemption was made over three years ahead of schedule. This means that NAMA’s primary objective has been achieved with the elimination of a €30.2 billion (at its peak) contingent liability of the Irish State.

 

Cash Generation and Remaining Portfolio

 

NAMA continued to generate cash from its portfolio management and disposal activities in 2017. In excess of €40.5 billion cash has been generated by NAMA since inception – primarily from asset and loan sales as well as rental receipts from properties controlled by debtors and receivers.  

 

NAMA continues to manage a diverse portfolio of loans valued at €3.7 billion[1] and expects to generate a profit for 2017. Subject to favourable market conditions prevailing and the effective management of its remaining portfolio of assets, NAMA expects to deliver a surplus of the order of €3 billion by the time it completes its work.

 

Residential Delivery

 

NAMA has the capacity to fund the delivery of 20,000 residential units by end-2020, if commercially viable.  It is estimated[2] that 7,200 units have been delivered between 2014 and end-2017 through NAMA funding.

 

Construction has begun on sites which will deliver a further 2,500 units. An additional 7,000 units have received planning permission but are not yet under construction. Planning applications have been lodged, or will be submitted during 2018, for another 8,500 units.

 

Dublin Docklands SDZ 

 

A key priority for NAMA is to facilitate the timely delivery of Grade A office, retail and residential space within the Dublin Docklands’ SDZ and Dublin’s Central Business District. There is capacity to deliver 4m square feet and 2,000 residential units in the SDZ area, of which NAMA retains an interest in circa 80% of this potential.

 

Progress highlights to date include:

  • Construction is underway on 6 sites with a capacity to deliver 1.9m square feet of commercial space and 480 residential units;
  • Planning permission has been obtained for an additional 1m square feet of commercial space and 900 residential units.

 

Social Housing

 

Since the start of 2012, NAMA has delivered 2,456 houses and apartments for social housing, excluding houses provided under Part V arrangements.

 

NAMA provides whatever funding is required to make social housing units habitable and has established a special vehicle, NARPS, to purchase suitable units for onward leasing to local authorities and approved housing bodies. To date, NAMA has invested approximately €350 million in remediating, completing and purchasing properties for social housing use.

 

Unfinished Housing Estates

 

NAMA exposure to unfinished housing estates has reduced from a peak of 335 in 2010 to just 8 estates. It is expected that these remaining estates will be resolved during 2018.

 

Home Building Finance Ireland (HBFI)

 

In his October 2017 Budget speech, the Minister for Finance announced that the Government had decided to establish a new vehicle, Home Building Finance Ireland (HBFI), to increase the availability of debt funding to commercially viable residential development projects.

 

HBFI will draw on the expertise and skill in residential development funding that resides in NAMA but will be a legally independent entity.

 

The €750m initial funding for HBFI will come from Ireland Strategic Investment Fund (ISIF). HBFI funding has potential to fund the construction of 6,000 units in the coming years. This will be additional to the output from NAMA’s residential delivery programme.

 

New legislation is currently being drafted and, subject to Oireachtas approval in early 2018, it is expected that HBFI will commence operations in mid-2018.

 

 


[1] Post-impairment value of NAMA loan portfolio at 30 June 2017

[2] Final year-end data not yet available