Archive for February 25th, 2010

We hear today that two of the State’s most prominent developers during the boom years, Bernard McNamara and Jerry O’Reilly are valuing assets in their books at 2006 levels which to many people will look, to say the least, optimistic. These two developers will have loans transferred to NAMA, it is expected and there will no doubt as you would expect from two competent businessmen be tough negotiation positions put forward to NAMA as to values.

With respect to loans to developers in general (and this is not a comment on the two individuals above), it is to be hoped that NAMA is prepared to have teeth to pursue repayments and enforcement of personal guarantees even if it means hauling in tax advisers and the like to find where offshore Special Purpose Vehicles and contingency funds and Trusts are located. Let’s remember that the developers may be near broke at present but they are not idiots.

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Yes “sources” tell the Irish independent that the European Commission is likely to give its approval to NAMA (requested on 23rd December 2009 after FG Senator Eugene Regan asked the government on 19th December 2009 how the approval was progressing).

Buuuut.. there may be preconditions. Senator Regan’s second submission to the EU at the start of February did ask for some modifications to NAMA if it were to be approved including barring Anglo from participation, restriction of loans to be taken into NAMA as toxic and an independent monitoring group at EU level. Will these or otheres be granted? I don’t know though the Independent talks about a review after 6 months (when the vast majority of loans will have been transferred!).

Look out for the EU statement tomorrow evening.

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Respected property company and NAMA GB valuer Cushman and Wakefield have just published their review into global office rents for 2009, abad year for office rents globally. Dublin’s IFSC rents fell by 38%, the second largest collapse in Europe after Kiev. Cork CBD fell by 33% and Dublin 2/4 fell by 31% – all sounds bad though average global rents fell by 21%. However even after these drops Dublin is still more expensive than Frankfurt, Brussels and Amsterdam – cities in countries which are experiencing modest growth. What will happen with Dublin’s rents given the expectation that GNP drops by 2% this year.

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