“Not all of them have yet abandoned the extravagant mindset of the 2003-2007 era”

So said Frank Daly at a luncheon organised by the Leinster Society of Chartered Accountants in Ireland today. A copy of his speech is available here. Mr Daly was referring to the first borrowers whose loans have transferred to NAMA and who are now working out plans for the resolution of those loans. Mr Daly also stated that NAMA is to have a 7-10 year life expectancy and Bejamin-Button like will start out with a huge balance sheet which should be reduced to nil at the end.

However the most interesting part of the speech was possibly that part which dealt with unfinished developments. NAMA has a finite development pot of €5bn and demands upon it are likely to exceed that, according to Mr Daly. Mr Daly said “From NAMA’s perspective, given where we find ourselves, there are some tough decisions to be made. One of the options will be to demolish some developments”. There must be oversight of NAMA’s demolition of property. “From NAMA’s perspective” is a telling expression. From Toll Road operators’ perspective, it would be terrific to drill up non-toll roads in the vicinity – that would boost the demand and profitability of the toll road, however it would be madness for the wider economy. NAMA’s significance to our economic recovery must not blind those whose job it is to manage the entire economy. It would be helpful if it were recognised now that NAMA’s objectives will sometimes clash with the wider objectives of the economy and those clashes must be carefully managed.

Lastly Mr Daly said “A credit approval framework has been put in place to enable funding requests from borrowers to be assessed and approved or rejected as appropriate”. For the sake of transparency I hope this framework receives adequate oversight.

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DTZ Sherry Fitzgerald and HWBC report some success with selling former bank branches

Property giant and NAMA valuation panel member, DTZ Sherry Fitzgerald has reported today on its progress with selling what it describes as “the largest commercial property portfolio to come to the Irish market” – the First Active portfolio of 49 branches. In terms of the prices achieved, it would appear that there is very good value indeed to be seen right now in Irish commercial property. You can view all of the properties at a dedicated website www.49properties.com (free registration required to access some details). In terms of commercial rental properties, the article highlights one of the issues with the recent banning of upward-only rental reviews, the article states “Katie Horridge says the banning of upwards-only rent reviews has led to a fall-off in interest from traders in a number of instances” – as the ban only affects new leases, not assigned or existing leases, the comment shows that traders are displaying an aversion towards old leases which may prove difficult to assign in competition with new leases. DTZ apparently had 28 freehold properties for sale – 11 are “sale complete”, 13 are “in the hands of the solicitors” and 4 remain unsold. The following were the transactions announced in today’s article.

 

Elsewhere the Dublin estate agency, HWBC, is charged with disposing of part of the ACC Bank branch network (19 branches apparently) – you can view the properties here. It appears to have previously sold 5 properties in addition to the transactions announced today which are:

 

The Irish Times reports that ACC will find it difficult to sell some of its properties unless it changes its “tight fisted marketing strategy”! Although this characterisation is not attributed to any estate agent, it’s as honest a comment on some commercial sellers as I’ve seen in some time.

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