Comments on: NAMA deploys its development strategy with €1.5m of works on Grafton Street

By: namawinelake

namawinelake — Thu, 24 Jan 2013 06:55:12 +0000

@WSTT, the responsibility for the confusion might be here, the 8,000 sq ft is, I believe, the square footage that will be available for the two floors of retail, so nearer 2 floor *4,000 sq ft. though another (less likely) interpretation of Jack Fagan’s report is that the office square footage and rents will be included in the 8,000 sq ft and €750,000.

By: who_shot_the_tiger

who_shot_the_tiger — Thu, 24 Jan 2013 01:59:18 +0000

You can’t build 24,000 sq. ft. (3 floors * 8,000 sq.ft. footplate) in Grafton Street for €1.5 million. It will cost more like €7 million. Where do these figures come from? Hey NAMA….. Shoorly sum misteak?

By: john gallaher

john gallaher — Wed, 23 Jan 2013 19:26:14 +0000

@NWL extrapolating your math over the remainder of the portfolio..and the numbers for the ‘buy in’ simply don’t work-70% discount on prime trophy core retail,what would have been utilized say in Sligo,Waterford or Tullamore..

Every time they sell a piece of land then they must lose lots of money !

“Two farmers from Mallow, County Cork, in west Ireland, paid about 2.25 million euros last year to buy 180 acres of land from a developer who paid them 40 million euros for it in 2004.
“It suited my pocket,” said one of the farmers, 76-year old John Cronin. “I know quite a number of farmers that are looking out for land. There’s a great love for it.”
http://uk.reuters.com/article/2013/01/18/uk-ireland-property-idUKLNE90H00E20130118

But we are in the minority after that rogue NTMA,employee ‘enda’ leaked all the numbers pretty much everyone else in RE knows the basis here.

So NAMA is into spec development these days then…NAMA would have to have accrued the lost interest on that loan,legal fees,receiver fees etc too.

Lets also keep in mind before the spin and misinformation campaign begins in earnest,the net result for the state using your math is still a loss to the taxpayer here of well over 10 million on prime Grafton Street…

They should release the ‘metric’ they are applying in these situations..or is that also a ‘secret’….or do they use any at all.

Not sure of Apple’s footprint requirements in Ireland but ‘word’ is they were looking..

NAMA overpaid for the loans-it was a further bailout for the banks and is now desperately trying make ANY deal work-Joan Burton will be proven correct in the long run.

By: namawinelake

namawinelake — Wed, 23 Jan 2013 18:45:04 +0000

@John, was unable to establish when Bernard bought these two adjoining buildings – “during the boom” appears to be the best out there. Commercial, and retail in particular is down about 70% from peak, so NAMA’s purchase price might only have been 30% of $25m + 10% say Long Term Economic Value, or €8.25m. Add the €1.5m development cost, and a little contingency to get a nice round €10m.

Jack’s report today is unclear as to whether the €750,000 is for the shop only (8,000 sq ft) or the shop AND The office space (one floor over one unit and two over the other as far as I can see). But either way, a 7.5% gross yield when NAMA is paying a little over 0.75% on its cost of funds, makes sense. Makes even more sense if the offices are on top of the €750,000 rent quoted.

By: john gallaher

john gallaher — Wed, 23 Jan 2013 18:35:16 +0000

one wonders do they have a calculator at treasury buildings..maybe johnny lent them his as its of no use to him,not that he used it much…
quick and ‘dirty’ numbers.
assume 50% discount on loan purchase so..
PP 12.5 million
reno 1.5 million-appears LOW
cost basis 14 million
PROJECTED RENT-750,000
return on cost 5.4%-WTF- that’s one hell of a competitive advantage NAMA has with its almost ‘free’ money…whats the exit strategy here…not including leasing commission,cost of funds.

a 4.5% cap…gets you 16.66million before sale costs.

what if they paid more than 50% for a Grafton Street loan..5% RETURN ON COST really !

with more vacancies imminent due to NAMA’s staunch and trenchant opposition to the abolition of UORR-expect further downward pressure on rents.

this is NOT asset management by any metric-NAMA continues to distort the market by engaging in uneconomic deals they should never have lobbied to preserve UORR,hobbling Irish retailers and other current tenants-granting new entrants an unfair advantage.

http://www.businesspost.ie/#!story/Home/News/COMMENT%3A+Horror+on+the+High+Street/id/19410615-5218-50fe-5e6e-e0b373488593