A recurring theme on here is that NAMA does not have the significant control over Irish residential property commonly attributed to it ,with just 13,000 homes subject to NAMA loans in a country with 2m homes, 300,000 of which are vacant and a country with an overhang of excess property over long-term averages of 80-100,000 homes. NAMA has 8 years to work out its loans, so the annual impact on our residential market is not likely to be significant.
However, NAMA is likely to have a dominant role in commercial property, with €6-7bn of Irish commercial property securing its loans. Remember our commercial property market was worth just €500m last year, and looks set to be worth even less this year. NAMA is the player in Irish commercial property. So it is a little surprising that it doesn’t attract more scrutiny in this area, and we don’t come across more criticism like that reported here today.
Today, Fianna Fail TD for Longford-Westmeath, Robert Troy has accused NAMA of being responsible for the closure of the Harvey Norman furniture store at the Lakepoint shopping centre in Mullingar. The store closed last Sunday with the loss of 22 local jobs, and there doesn’t seem to be much hope of transferring the workers to other stores nationally.
Having met with the Harvey Norman boss for the Irish chain, Deputy Troy (pictured above) says that it was the €200,000 annual rent which led to the store closure and job losses, and he has harsh words for NAMA, accusing the Agency of refusing to engage with the retailer which, it is claimed, made “five concrete proposals” to deal with the high rent bill.
NAMA did launch an initiative last December 2011 to deal with requests from commercial tenants facing serious difficulties caused by high rents. Indeed the latest from NAMA is that it has approved 97% of the 149 requests for rent reductions that it has received, and rejected just 4 requests.
NAMA was asked for a comment on the TD’s comments today, but has not responded at time of writing.