NAMA €2 billion Irish investment programme to include significant new commercial development to meet FDI demand – NAMA Chairman

  • Agency will address a shortage of supply for top-quality office accommodation in the Dublin Docklands area
  • €750m benefit to taxpayer from asset transfer reversals and new security, up from previous estimate of €500m
  • 80:20 Deferred Payment Initiative to be extended
  • NAMA providing €1bn funding to IBRC Special Liquidators

The National Asset Management Agency (NAMA) has provided further details of its plans to develop new commercial and residential projects as part of its €2 billion investment programme in Ireland in response to emerging demand in key markets. 

The Agency’s Chairman said today that these plans include the development of significant additional office accommodation within the Dublin Central Business District, particularly focused on the Docklands, in response to the on-going expansion of the country’s key financial services sector and the development of new business and technology hubs in line with Government enterprise creation policy.

Speaking to the Association of European Journalists in Dublin, NAMA Chairman Frank Daly said the Agency expects to make significant investments in the Dublin Docklands to cater for the future job creation arising from the country’s continuing strong performance in the global financial, technology and other key service sectors and to meet NAMA’s commercial objective of maximising value from the management of its acquired assets.

NAMA is also evaluating residential projects where demand exists in Dublin and in other major growth centres throughout the country.   

Speaking in the context of NAMA’s €2 billion Irish investment programme, Mr Daly illustrated the Agency’s plans by reference to the Dublin Docklands:

“We hold security over a considerable number of properties and lands on both sides of the River Liffey and are currently assessing the commercial feasibility of a wide range of projects – not least those in the undeveloped part of North Wall Quay in the north Docklands”, said Mr Daly.

“The Dublin Docklands has been a marked success from an investment perspective, already accommodating over 40,000 employees in the technology, banking, financial, commercial law and other service sectors.

“The area is expected to require significant new development over the medium term, particularly of commercial office space, to accommodate the continued expansion of the financial services sector and the creation of new business and technology hubs in the wake of the move by companies such as Google and Facebook to the area”.

Mr Daly stated that the timing of investment is linked to the resolution of planning and infrastructure issues and welcomed in this regard the decision by the Minister for the Environment to designate part of the Docklands as a Strategic Development Zone (SDZ).

“The SDZ designation will help to provide clarity on the planning objectives of the local authority and represents a significant step forward in terms of unlocking potential investment through NAMA and other sources, and delivering on the development potential of the area in response to the growth needs of the economy”, he said. 

Mr Daly also stated there may be need for an entity at a national level to take a central, co-ordinating, policy development role in relation to the residential property market, particularly in terms of identifying the areas where future housing shortages are likely to arise and how such shortages might be addressed. 

“One of the legacies of the boom is the regional mismatch between housing supply and demand: some parts of Ireland will be attempting to absorb excess supply for a long time to come whereas others are already showing signs of supply shortages, particularly parts of Dublin and some other cities”, he said. 

Mr Daly also said:

  • NAMA has approved sales with a total value of €11 billion since inception. The Agency has completed asset disposals of €7 billion (from 3,900 individual transactions) and is close to completing a further €2 billion. 80% of sales have been in Britain, reflecting favourable conditions and strong demand in that market.
  • The Agency is currently overseeing sales of €1.5 billion of property in Ireland through its debtors and receivers. It is also managing the sales of Irish loan portfolios of more than €1.1 billion.
  • The Agency expects to realise about €750 million by reversing asset transfers by certain debtors and taking charges over previously unencumbered assets – up from a previous estimate of €500 million. Money realised from these sources will be used to pay down debts owed to the taxpayer.
  • Interest in the 80:20 Deferred Payment Initiative for residential mortgages has been relatively strong with sales of €21m to date and further properties will be included in this initiative shortly. 
  • The Agency has agreed to sponsor a major research programme by the Economic and Social Research Institute (ESRI) to produce, for the first time, comprehensive information on the residential property market in Ireland – such as the key factors influencing the availability and cost of housing over the medium and long term. This project will benefit people buying houses, investors and the construction industry. 
  • The Agency is providing a €1 billion credit line to the Special Liquidators of IBRC to meet their ongoing funding requirements.

IBRC liquidation

Mr Daly also referred to the legislation recently passed by the Oireachtas (Irish parliament) to appoint Special Liquidators to IBRC and direct the Agency to acquire the unsold residual element of the IBRC loan portfolio later this year.

“This new portfolio will significantly increase NAMA’s workload”, he said. “Potentially, depending on the scale of loan transfers, the size of our balance sheet could increase by close to 50%”.

Mr Daly said NAMA will not have much visibility on the portfolio to be acquired until the Special Liquidators complete the valuation and sale process for IBRC’s loans.  The valuation and sales process is scheduled to complete in late August. “The prospective acquisition of the residual IBRC portfolio represents a major challenge for NAMA. As with our original portfolio, we will be guided in that challenge by our primary commercial objective – which is to obtain the best achievable return for the Irish taxpayer.”>

Mr Daly said NAMA has pursued the taxpayer’s interest diligently in its work to date on the existing loan portfolio and that it will do the same in respect of every IBRC loan it acquires.

“We have sought to be hard-nosed but fair in our dealings with debtors and that will not change”.