A problem facing auditors at one one of the State’s biggest housebuilders during the boom goes to illustrate the problems that NAMA must confront in valuing toxic loans. In the annual accounts for Shannon Homes for 2009, the auditors state in relation to a €72m land bank valuation “Although, the directors have valued the land bank and work in progress to the best of their ability, there is no active market from which we could make an assessment of the net realisable value or value in use.”
“No active market” – could the same be said of the housing market where over 300,000 homes lie vacant and where there is evidence of banks and developers hoarding homes. Sadly in the state, statistics on property transactions are masked in various levels of secrecy and we will not know until after April 2010 (thanks to the CSO) how our population has changed in the past year and in particular if spiralling emigration has led to a reduced population.
Separately, Carluccio’s, that purveyor of delicious Med-themed food, is to re-open following the reversal of the decision of its landlord to reduce rent. Carluccio’s announced earlier in the week that it was closing due to its landlord charging €680,000 per annum in rent for its Dawson Street premises, a rent that was uneconomic to operate its restaurant business which serves 5,000 people every week. The property was bought by the current landlord for €20m in 2006 and the previous annual rent represented a return of only 3.4% and that is presumably going to fall and indeed it looks as if capital values will shows some reduction this year even if on a lesser level than previous years.