National Asset Management Agency - Annual Report 2012


NAMA's overriding commercial objective is to generate the best achievable financial return for the taxpayer. However, within the context of this commercial remit and consistent with Section 2 of the Act, an additional major objective is to contribute to employment and economic recovery and to the achievement of broader social and economic policy objectives. The Agency has sought to meet these objectives through a diverse range of activities, including the introduction of targeted property market initiatives and by facilitating public bodies in purchasing or leasing properties that are suitable for their purposes. In addition, NAMA is contributing in other ways, such as working to address the problems posed by unfinished housing estates or agreeing rent abatements with businesses to support jobs.

Examples of NAMA's on-going work in these areas are set out below.


NAMA contributes in a tangible way to sustainable recovery in the property market in Ireland through overseeing the phased and orderly release of property for sale by its debtors and receivers. All such assets are ultimately intended for sale but the actual volume of sales depends on the level of demand, the availability of credit and the absorption capacity of the market.

Facilitator of transactions

NAMA has acted to facilitate significant property transactions that might not otherwise have taken place by offering structured engagement between debtors and receivers and potential new investors. NAMA has, in this way, played a pivotal role in a number of notable property transactions and initiatives including:

  • Funding the completion of a partially built office block in Dublin subsequently acquired by Google.
  • The recent purchase of an unfinished building which is to become the Central Bank's new headquarters.
  • The acquisition by Scottish and South Energy ('SSE') of its new corporate headquarters at Leopardstown in south Co. Dublin.
  • An investment of €100m by the Kerry Group at Millennium Park in Naas.

NAMA is working actively with the IDA to identify suitable properties to meet the requirements of foreign direct investment. Among examples are:

  • A major office letting in Dublin for a multinational company which is expected to employ some 1,000 staff.
  • The complex site assembly for a major new IT facility in west Dublin.
  • A site for a major research centre in Leinster.
  • A major multinational letting in the Grand Canal Square office development which has reinforced perceptions of the Grand Canal Dock area as a global hub for IT and social media activity.
Vendor Finance

In May 2012, NAMA announced plans to advance, over the years 2012 to 2016, at least €2 billion in vendor finance to purchasers of commercial property securing its loans, mainly in Ireland. This initiative has the potential, based on funding levels of up to 75%, to generate new investor equity in the Irish market of between €800 and €900m, with the majority of new equity expected in 2013 and 2014. Vendor finance will be provided to new investors for periods of up to seven years but typically for three to five years, with the expectation that it will be refinanced by the banking sector when more normal market conditions return.

The first vendor finance transaction, involving the sale of an office building, One Warrington Place, in Dublin was completed in April 2012. NAMA has since concluded further vendor finance sales including the sale of Edward Square in Galway in May 2013. Further vendor finance transactions which are substantially agreed relate to, for example, the sale of a fully-let prime office building in the IFSC. A number of other vendor finance transactions are at an advanced stage.

NAMA's experience is that in circumstances where vendor finance is offered even if not taken up by the ultimate purchaser, the availability of financing on competitive terms has widened the potential investor base.

80/20 Deferred Payment Initiative

NAMA launched its DPI in May 2012. The initiative aims to provide home buyers with a level of protection against a fall in residential property prices over the initial five years of a mortgage. The initiative was launched in conjunction with Bank of Ireland, EBS and Permanent TSB and covers close to 400 residential properties under the control of NAMA debtors or receivers. Under the initiative, the home buyer pays 80% of the property's value upfront, with the remaining amount (up to 20% of the property's value) to be paid in five years by the mortgage provider (on behalf of the home buyer) directly to NAMA depending on the value of the property at that time.

The residential properties included in the initiative have been released on a phased basis, with the most recent launch occurring in March 2013. The properties, predominantly three and four bedroom semi-detached houses, vary in price range from €95,000 to €410,000 and are located in 13 counties across Ireland. Up to end-March 2013, sales had been achieved on 146 properties with a total sales value of €28m. Of the total sales, approximately 60% are availing of a Deferred Payment Initiative mortgage, with the balance, in line with trends in the wider residential market, mainly comprising cash purchasers.

Castleoaks, Dublin Road, Carlow
Churchfields, Clonlara, Co. Clare
Tír Cluain, Midleton, Co. Cork
Ardfield, Grange, Douglas, Co. Cork
Bridgefield, Curraheen Road, Bishopstown, Co. Cork
Castle Heights, Carrigaline, Cork
Cúl Árd, Carrigtwohill, Co. Cork
Rowen Hill, Mount Oval, Rochestown, Cork
Brightwater, Crosshaven, Co. Cork
Old Quarter, Ballincollig, Co. Cork
Drakes Point, Crosshaven, Co. Cork
Cooline, Cobh, Co. Cork
Highfield Park, Ballincollig, Co. Cork
Woodborough, Tower, Co. Cork
Belfield Abbey, Boreenmanna Road, Cork
Silken Park, Citywest, Dublin 24
Browns Barn Wood, Kingswood, Dublin 22
Carrickmines Manor, Glenamuck Road, Dublin 18
Goldenridge, Rush, Co. Dublin
Devlin Banks, Naul Village, Co. Dublin
Pairc na Rí, Athenry, Co. Galway
Oakfield, Park Road, Killarney, Co. Kerry
Cluain Bhearú, Athy, Co. Kildare
The Weir, Castlecomer Road, Kilkenny
Castlerock, Castleconnell, Limerick
Silverstream, Stamullen, Co. Meath
Loughmore Square, Killeen Castle, Dunshaughlin, Co. Meath
Ardfinn, Strandhill Road, Co. Sligo
Elderwood, Castlebridge, Co. Wexford
Aughrim Hall, Aughrim, Co. Wicklow

A house in Castlerock, Co. Limerick, which is one of the properties available through NAMA’s DPI.

A house in Castlerock, Co. Limerick, which is one of the properties available through NAMA's DPI.
In its Business Plan published in July 2010, the NAMA Board undertook to 'engage proactively with Government Departments, local authorities, State Agencies and other appropriate bodies in relation to their possible need for land/properties'. The Board also committed to giving first option (at NAMA's minimum reserve price) to State bodies on the purchase of property which may be suitable for their purposes.
In line with this commitment, NAMA has accommodated the release of lands and property for schools, health care facilities, community and recreational amenities and other uses. Examples include:
  • The identification of more than 70 sites as potentially suitable for new schools.
  • The sale of sites to University College Dublin and University College Cork.
  • The sale of the Opera Centre site in Limerick to Limerick City Council.
  • The release of lands in Baldoyle, north Co. Dublin to Fingal County Council for parkland.
  • Co-funding, with Fingal County Council, of an N2-N3 link road through lands in west Dublin to facilitate identified development requirements.
NAMA is also engaging with the Department of Health and the Health Service Executive in relation to possible sites and buildings for primary health care centres and other step-down and community health care facilities and it has participated in the process designed to identify a suitable location for the planned National Children's Hospital.

A CGI impression of the proposed design for the Opera Centre site in Limerick which was sold to Limerick City Council. The Board is committed to giving first option (at NAMA’s minimum reserve price) to State bodies on the purchase of property which may be suitable for their purposes.

A CGI impression of the proposed design for the Opera Centre site in Limerick which was sold to Limerick City Council. The Board is committed to giving first option (at NAMA's minimum reserve price) to State bodies on the purchase of property which may be suitable for their purposes.

The Beacon development in Dublin where 58 units were sold to Clúid Housing in 2012 for use as social housing.

The Beacon development in Dublin where 58 units were sold to Clúid Housing in 2012 for use as social housing.


NAMA is working closely with the Minister for the Environment, Community and Local Government and the Minister of State for Housing and Planning in relation to the delivery of social housing and all parties are committed to the maximum possible delivery of residential units under this important initiative. To date, NAMA has identified almost 4,000 residential properties as potentially suitable for social housing. Of these, demand has been confirmed by local authorities for over 1,500 properties (Figure J).

Once demand for a property has been confirmed by a local authority, NAMA facilitates contact and negotiation between its debtor or receiver and the local authority or Approved Housing Body ('AHB') to acquire the property. Contractual arrangements can take the form of a lease or purchase. In general, purchases are completed by AHBs and the properties acquired are then made available to local authorities under a payment and availability agreement. NAMA's experience is that once demand has been confirmed for properties and contracts signed there is no impediment to the early delivery of the properties by NAMA debtors and receivers.

To help further streamline delivery, NAMA has also established a special purpose vehicle, National Asset Residential Property Services Ltd., to take ownership of properties where there is an established demand. In 2012, 229 new social housing properties across seven counties (Cork, Dublin, Galway, Louth, Kildare, Kerry, and Westmeath) were delivered (203) or contracted (26) for social housing through NAMA's direct engagement with the Department of Environment, Community and Local Government and the various AHBs.

FIGURE J: Position (as at end-December 2012) in relation to houses identified by NAMA for social housing
FIGURE J: Position (as at end-December 2012) in relation to houses identified by NAMA for social housing
Delivered 203
Cork Cork County Council 53
Dublin Clúid Housing Association 58
Dublin Circle Voluntary Housing Association 7
Dublin Túath Housing 20
Galway Clúid Housing Association 13
Galway Túath Housing 13
Galway Galway County Council 4
Louth Túath Housing 15
Louth Drogheda Borough Council 12
Kildare Túath Housing 4
Westmeath Túath Housing 4
Contracted 26
Galway Galway County Council 3
Kerry Clúid Housing Association 15
Kildare Kildare County Council 8
Terms agreed 4
In active negotiation 363
Preliminary appraisal 244
By end-March 2013, an additional 110 properties had been sold or leased – 60 of the transactions had been closed and 50 were contracted for delivery later in 2013.


The Department of the Environment, Community and Local Government, in conjunction with local authorities around the country, prepared a survey in 2012 of unfinished housing developments. Based on this survey, NAMA has identified that it holds security over 327 or 18% of the 1,836 unfinished estates in the country. NAMA is funding, through its debtors and receivers, the cost of remedial work on these estates. Such work tends to range from relatively straightforward remediation to complex health and safety issues, with the former being predominant in NAMA's case. The estimated expenditure to date under NAMA's programme is €4m.

Where NAMA holds security over unfinished housing developments, it requires its debtors and receivers to prepare a Site Resolution Plan ('SRP') with input from stakeholders including residents, the bond holder, the local authority and NAMA. The purpose of the SRP is to provide an assessment of the commercial development options, with associated cost benefit analysis, including funding proposals. This may not necessarily be the full completion of the development but a pragmatic and effective solution that addresses the issues facing all stakeholders including residents. The first step in all cases is to ensure that initial health and safety works are completed, followed by a plan to resolve remaining unfinished elements of the estate, sometimes on a phased basis. The overarching objective is to explore every feasible option for resolving the unfinished development in question. The SRP process also provides a mechanism to maximise the value of property by securing commercial planning and development outcomes that reflect the current economic environment.

Site resolution can involve a variety of works, including completing roads and infrastructure and completing houses and apartments for sale or rental. In the case of NAMA debtors and receivers, funding for these works is advanced by NAMA and from bond securities (whereby local authorities call on bonds to be released by the bondholder).

NAMA is currently working through its list of unfinished developments. NAMA's progress in this area can be seen, for instance, in the inclusion of previously unfinished residential developments in the Agency's DPI and the sale or lease of completed properties for social housing. NAMA's strategy has also included the public sale of a number of unfinished developments. Notwithstanding this, progress on individual developments can be sometimes slow, particularly where debtors are uncooperative or where legal or title issues are an obstacle. In working to overcome such barriers, NAMA is committed to maximising its recovery from unfinished housing developments and ensuring the availability of the housing stock for beneficial use as soon as possible.

Where buildings are unsafe or otherwise not viable, demolition may be considered as an option. Whilst a decision to demolish any building or development is not taken lightly, it may be considered as a means of reaching resolution on properties where the development is unviable for economic, structural and safety reasons. Decisions are made, on a case by case basis, as part of the SRP agreed with each local authority.

In 2012, NAMA sanctioned the demolition of a block of 12 apartments as part of the agreed SRP for a residential development in Co. Longford. The local authority had sought the demolition of the apartment block on health and safety grounds. NAMA's analysis also showed that the level of investment required to make the block habitable and saleable could not be justified on commercial grounds. The apartment block was poorly constructed, located on a flood plain in the middle of an industrial estate and had become subject to vandalism and anti-social behaviour. The cost of demolition and remediation works was of the order of €150,000.


To end-April, NAMA had received 279 eligible applications for rent abatements from retailers through its debtors and receivers; of these only only ten applications have been refused. The aggregate annual value of abatements agreed to date is about €14m, that is, the rent due to NAMA that it has agreed to forego in order to help businesses to survive.

The objective of agreeing rent abatements in the first instance is to support the short-term viability of small and medium businesses around the country which are intrinsically viable but which are experiencing difficulties arising from current economic conditions. In cases where there is genuine hardship which can be ameliorated by rent abatement, NAMA achieves two significant benefits. Firstly, it helps to preserve the value of the collateral supporting NAMA loans by ensuring that tenants remain in business and continue thereby to generate rental income. Secondly, it safeguards jobs and economic activity in general. Any short-term loss of rental income arising from rent abatement is likely to be more than offset by these long-term benefits. The terms of NAMA's Guidance Note on Upwards Only Commercial Leases are not designed to confer benefits on businesses that are trading profitably or are part of trading groups that are in a position to honour their current contractual arrangements on rent.


A difficulty associated with the Irish residential market is the lack of independent professional research and data which would facilitate policy-making and commercial activity. In particular, there is an absence of reliable and unbiased information about the key factors that will influence the availability and cost of housing over medium- and long-term horizons. For this reason, NAMA has agreed to take a leading role in promoting and funding a two-year research programme on housing to be undertaken by the ESRI. The objective is to produce practical market insights that will facilitate informed decision-making by all market participants, including potential purchasers, investors and the construction industry.

The research programme will be overseen by a Steering Committee, on which NAMA will be represented, which will agree priorities and review outputs. Editorial control and responsibility for the research and for final output will rest with the ESRI.