Ireland’s National Asset Management Agency – NAMA – is set to accelerate its disposals of assets in Northern Ireland and elsewhere following the decision of the Irish Supreme Court that the organisation’s legal framework was constitutional.
The decision was part of a Supreme Court judgement in February that also ruled that Belfast property developer Paddy McKillen had the right to be properly consulted before NAMA took over loans awarded to him by the Anglo-Irish Bank.
Despite the apparent setback, NAMA says it is determined to proceed with asset disposals in the Republic and the UK. Frank Daly, the chairman of NAMA, told the launch meeting of the Society of Chartered Surveyors Ireland, that it would “shortly” be taking further enforcement action against some of the 30 largest property developers whose €27bn of debts NAMA has acquired, where NAMA believes either that their business plans are not viable, or else they are procrastinating in resolving debt problems.
NAMA is convinced, said Daly, that property sales had to be achieved, “at whatever prices buyers are currently willing to pay”. He warned that “many sellers may still retain unreasonable expectations of the prices that can be realised for the foreseeable future”.
As well as putting pressure on the highest priority debtors, NAMA is also focusing increasingly on a second tier of large debtors. Some 145 developers were given until the end of last month to submit viable business plans, relating to loans totalling €34bn. Any debtors who fail to co-operate were warned by Daly, “we will not indulge them further”. A third group of smaller debtors – 675 borrowers, with total debt of less than €13bn – will have the management of their loans delegated to those banks that originally awarded the loans.
NAMA’s determination to offload assets has been marked by two significant milestones. Google has purchased Dublin’s skyscraper Montevetro Building for €99.9m, while pressure from NAMA has led to London’s Citigroup Centre, part-owned by Irish developer Derek Quinlan, being put on the market for £1bn. Other Quinlan properties are expected to go onto the market now, following successful action by NAMA to put some of his assets into receivership.
NAMA is also expected to launch a sale of residential properties, including so-called ‘ghost estates’. A widespread sale of homes is likely to add to downward pressure on house prices, potentially causing average prices to fall further on both sides of the border.