The €410,000 sale in November 2011 of “Sunday Well”, the house in Lucan on two acres, by NAMA developer Thomas Dowd to former NAMA employee Enda Farrell may become NAMA’s most famous sale, but for all the wrong reasons. But what most people don’t appreciate is the massive volume of sales of property subject to NAMA loans. It has been estimated on here before, that an average between €500-750m of sales take place per month EVERY SINGLE MONTH, by reference to the original value of the loans.
We found out yesterday that NAMA has to date, since it started acquiring loans in March 2010, overseen the sale of 3,500 individual property units ranging from undeveloped sites to completed office units and probably every property type in between. In other words, in over the past 625 working days, NAMA has overseen the sale of an average of 5.6 properties per day – was the one sale to Enda Farrell the only one that had a shady context?
Yesterday, the Fianna Fail finance spokesperson Michael McGrath asked the Minister for Finance Michael Noonan for details of the property sold. He received a very top-level answer with few details, but we learned that NAMA’s debtors and receivers have so far received €4.6bn in cash from the sale of 3,500 individual properties “which can range from undeveloped sites and parking spaces to completed office blocks” This works out at an average of €1,314,286 per sale.
Minister Noonan also gave a pretty meaningless statistic of there being 2,500 individual cash receipts because this include deposits and presumably completion sums on the same property. Next to no detail was given on the property sold. Deputy McGrath will no doubt be snorting in derision at the claim by Minister Noonan that “the NAMA Board guidelines require, where feasible, the sale of assets on the open market and their public advertisement and I am advised by NAMA that in the vast majority of cases the sale of assets securing its loans have been so conducted. In any event, NAMA requires that an independent valuation process be undertaken in respect of all asset disposals over €250,000 in value.” Deputy McGrath has previously complained about off-market sales including some in his own Cork constituency, and has said the practice of selling off-market “stinks”.
The full exchange is here.
Deputy Michael McGrath: To ask the Minister for Finance the number of properties that have been sold that is legally binding contracts in place by the National Assets Management Agency or by agents acting on behalf of NAMA or by agents appointed by NAMA controlled debtors and, of this number, if he will confirm for each category the number and total value of such properties which were up for sale on the open market and publicly advertised; and if he will make a statement on the matter.
Minister for Finance, Michael Noonan: As with a bank, NAMA does not own nor does it sell property assets securing its loans. The sale of these assets is conducted by their owners, that is, NAMA debtors, or, in enforcement cases, on behalf of these debtors by duly appointed Receivers/Administrators. I am advised by NAMA that its debtors and receivers have recorded over 2,500 cash receipts in respect of asset sales totalling €4.6 billion as of end August 2012. NAMA advises that cash receipts may relate to sales of individual properties or sales of multiple units as well as disposal of non-real estate assets such as shares and also deposits paid on such transactions. Included in the these cash receipts are sales of some 3,500 individual property units, which can range from undeveloped sites and parking spaces to completed office blocks.
However, these sales have been achieved in accordance with NAMA Board guidelines, a key principle of which is that the conduct of disposals should be on a competitive basis wherever practicable and in accordance with prevailing market practices for the asset class and jurisdiction to which the sale relates.
The Deputy will further note that the NAMA Board guidelines require, where feasible, the sale of assets on the open market and their public advertisement and I am advised by NAMA that in the vast majority of cases the sale of assets securing its loans have been so conducted. In any event, NAMA requires that an independent valuation process be undertaken in respect of all asset disposals over €250,000 in value.
I would also note that while it is the clear policy of NAMA itself to maximise the realised proceeds from all sales of assets securing its loans, it is also clearly in the absolute interest of NAMA debtors to maximise the realised proceeds from the sale of their assets in repayment of their debt. The Deputy will also note the legal, fiduciary and professional obligation on Insolvency Office Holders to maximise the realised proceeds from the sale of debtor assets.
@NWL.
Any chance you can put in a Plug for the PPR cleanup underway ( crowdsourced) on the Pin.
Work Here ( scroll down beyond 2000)
https://docs.google.com/spreadsheet/ccc?key=0ArdywImnxrDPdHVnblJKd1o5QktWY19SUEh5a1JFamc#gid=0
Explained here ( first post )
http://www.thepropertypin.com/viewtopic.php?f=4&t=46950
exceeded that target today,with 15 apartments yippee!
“Speaking at the Irish Council for Social Housing finance seminar this afternoon, Jan O’Sullivan; Minister for Housing said: “The sale of these 15 units to Tuath Housing Association is a very welcome development. I’d like to commend Tuath, the local authorities and NAMA for bringing this sale over the line. The 15 units will make a tremendous difference to families requiring social housing in the Drogheda area.”
http://www.kbc.ie/businessnews/namadealfordroghedasocialhousing
I’m a bit confused by some of the details (or timeframes or something).
” but we learned that NAMA’s debtors and receivers have so fare received €4.6bn in cash from the sale of 3,500 individual properties “which can range from undeveloped sites and parking spaces to completed office blocks”
Firstly I thought sales (amounts) were much higher; maybe they’re being paid in spuds.
Secondly, the 3.5k individual properties – this seems high given some of the high value sales. Are they counting the sale of an apartment block as 1 or the number of apartments contained in the development e.g. Wick Lane – is that 1 or a couple of hundred?
@Ahura, you’re right that NAMA has been talking of disposals worth €9bn-plus, but that refers to approved disposals and not all of those will have been realised in cash yet. But maybe the bigger reason for the difference is NAMA disposes of property AND loans, and remember the biggest single NAMA transaction to date has been the sale of €800m loans in Paddy McKillen’s Maybourne group. There was also a c€500m refinancing, which probably is booked as a sale, of David Daly’s loans.
I interpret the Minister’s response to be that an apartment block sold at once would be one property. But what about the 15 apartments sold by NAMA and picked up by John below? Would that be one property or 15 ?
Good point about loan sales. I’d say that explains it.
Re your question- I think 15. Bigger numbers sound better. The phrase “individual property units” suggests a certain granularity – I’m still leaning towards an apartment block being recorded as the sum of its parts.
Though I think the primary care site in Balbriggan would be one rather than three :)