As an asset management company, NAMA shouldn’t really be much different to other asset management companies, of which there are many. NAMA will tell you that it has five asset management strategies for the property underpinning its loans (1) sell (2) rent (3) develop (4) mothball (5) demolish but until now, it has not been widely publicized that NAMA is open to joint ventures with third parties to deal with its assets.
This week in the Dail, the Sinn Fein jobs, enterprise and innovation spokesperson Peadar Tóibín asked the Minister for Finance, Michael Noonan to outline NAMA’s strategy for attracting third party financing to help develop its properties.
The surprising response – “surprising” because I cannot think of a single instance of it happening so far – was that NAMA is indeed open to joint venture arrangements including financing. NAMA says that it is particularly appropriate to assets which have been fully taken over and are on NAMA’s balance sheet – at the end of Q3,2012 NAMA had €7.2m in property assets on its balance sheet, remember that the vast, vast majority of loans that NAMA forecloses leads to property being managed by receivers/liquidators and doesn’t come onto NAMA’s balance sheet. As NAMA proceeds through its life-cycle this amount will grow.
So, if there is an unfinished ghost estate and you have funds and the desire to work with NAMA, then why not contact the Agency. If there is a derelict building which you think could be commercially developed, why not talk to NAMA to tell them what talents you can bring to the table. Of course, it would be helpful if NAMA told you what properties it owned or controlled. You’ll find the foreclosure listing here, but there is no record of what comprises the €7.2m of property presently on NAMA’s balance sheet.
This is the full parliamentary question and response.
Deputy Peadar Tóibín: To ask the Minister for Finance the strategy of the National Asset Management Agency in attracting third party investment to participate on a risk basis in the development of property under the auspices of NAMA..
Minister for Finance, Michael Noonan: I am advised by NAMA that it utilises a number of asset management strategies to monetise its portfolio, including the sale of individual assets or portfolios of assets and loans sale. A key element in NAMA’s strategic planning also is recognition of the need to invest to preserve and enhance the value of its assets in line with anticipated as well as current demand conditions. NAMA advises that, in this context, it considers a range of project financing and delivery mechanisms, including joint venture arrangements where these make commercial sense. In particular, where NAMA acquires properties directly onto its balance sheet, its preference would be to form joint ventures with suitable partners who, along with NAMA, can introduce upfront equity and who, in turn, can avail of third party or NAMA debt financing. NAMA will consider joint venture development arrangements with suitable counter-parties on commercial terms that mitigate development and commercial risk for NAMA and optimise the financial returns for the taxpayer.
