Archive for September 20th, 2010

Dismantle NAMA – Sinn Fein

On this side of the border Sinn Fein party leader Gerry Adams is consistently the second most popular leader (after Labour’s Eamon Gilmore), however the party he leads seems stuck with the support of only around 10% of the electorate. This would seem to make the party’s position on NAMA reported today pretty irrelevant. It is reported that Sinn Fein is calling for a commission to dismantle NAMA in the most responsible and economically feasible way. Its policy on NAMA sets Sinn Fein apart from the other four main political parties Labour, Fine Gael, Fianna Fail and the Greens (who collectively attract the support of some 80% of the electorate) who are all committed to keeping NAMA though the main opposition parties, Labour and Fine Gael, have indicated unspecified changes may be made to NAMA should they gain power.

All of this comes at a politically nervous time. Although the Fianna Fail/Green coalition government effectively enjoys a working majority, this is only as a result of support from independent deputies and obstructing by-elections for three vacant seats. On this latter point, Sinn Fein has launched legal proceedings to force the government to hold the byelections for seats which have been vacant since June 2009 (Donegal, Fianna Fail, Pat Gallagher), February 2010 (Dublin South, Fine Gael, George Lee) and March 210 (Waterford, Fianna Fail, Martin Cullen) – the betting is that all three seats will go to opposition deputies which would make the government’s position precarious, though not doomed.

This evening after record highs for Irish government debt on bond markets and rumblings over the weekend about the leadership of the governing party following a below-par radio interview last week which sounded, according to an opposition politician, as if the Taoiseach was between drunkenness and a hangover, the Taoiseach Brian Cowen and Finance Minister (the relatively popular Brian Lenihan who confirmed at the end of last year that he was suffering from what appears to be pancreatic cancer though he claims his medical treatment is  leaving him fit enough to do his job) made a brief joint appearance at government buildings with the Taoiseach confirming he was getting on with the job with the support of his party and the Finance Minister effectively pledging loyalty.

The next general election is due by May 2012. A majority of people want an earlier election, which given we are mid-term and the financial crisis has been very costly is hardly strange. However it would seem that NAMA is more or less safe whenever an election does come and regardless of any likely result. The table below shows the current composition of the Dail (Irish parliament) together with the two latest opinion poll results.


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Just over a week ago, the NAMA CEO disclosed at the Cantillon School of Economics in Tralee that NAMA was close to disposing of €500m of property. The comments, reported by RTE, were seized upon by many and I think it would be fair to say that in a country traumatised by a catastrophe where elites (it’s Ireland and its plural), golden circles, insiders, unverified trust between bankers/developers, political clientelism (and in extreme cases corruption), secrecy and a lack of transparency are all blamed, that the thought of NAMA disposing of such a large chunk of property aroused intense suspicion.

The day after his appearance at Cantillon the Irish Independent carried what seemed like words of clarification from the NAMA CEO and the Independent said “the agency is also preparing to sell off land worth around €500m as it tries to meet a target to dispose of a quarter of its portfolio by the end of 2013. The land will be sold by local auctioneers and those buying the land will not know that it is being sold by NAMA. The only signs that NAMA is active will be “realistic asking prices”, Mr McDonagh added.” The same day apparently a journalist at the Tribune said that the €500m disposal was of loans and not real property and there was speculation that the loans related to the Cosgrave brothers’ holding on Oxford Street, London or some part of the Maybourne group of hotels (Claridges, the Connaught and the Berkeley all in London).

And today NAMAwinelake has received a message purportedly identifying the first properties to be offered for sale by NAMA. To use journalistic terms the message is a single source and unverified. It alleged that three land holdings including one opposite the K Club in Kildare were now being sold by NAMA. Three months ago, the Irish Times carried a story in which they said that alleged-NAMA-Top-0 developer, Gerry Gannon, was selling his 49% share in the K Club. And that he was selling a 74 acre holding opposite the K Club reporting that it was likely to sell for €20-25,000 per acre. The selling agent was HT O’Meagher Reilly. At the time, the land didn’t appear on their website but it is there now. This morning, NAMAwinelake contacted HT O’Meagher Reilly and asked if NAMA was the seller of the parcel of land. A prompt response came back which ignored the question (I don’t mean to imply impoliteness, in fact the message received back was very polite indeed) of NAMA’s involvement but stated “the property has been on the market for the past 2 months and we are now hoping to bring the process to a conclusion with the top bidders within the next week .We have been guiding offers in excess of €17500 per acre.” The price shown here is considerably more than the reserve quoted in the unverified message received. With respect to the source of the message received, I obviously don’t know whether the source is connected with the sale and is trying to increase interest or whether the information is reliable, though my personal opinion is that it feels reliable.

The implication from the Independent’s story last week was that land would be disposed of by auction. However in Ireland the term real estate auctioneer is mostly interchangeable with estate agent, and what the Independent said was the land would be sold by “local auctioneers” which might not necessarily mean the land will be sold at auction.

NAMA has said that it will comply with the Code of Practice for the Governance of State Agencies (2009) which states “The disposal of assets of State bodies or the granting of access to property or infrastructure for commercial arrangements e.g. joint ventures with third parties, with an anticipated value at or above a threshold level of €150,000 should be by auction or competitive tendering process, other than in exceptional circumstances (such as a sale to a charitable body). The method used should be both transparent and likely to achieve a fair market-related price.” And it would seem that there is a “competitive tendering process” going on at HT O’Meagher Reilly. There have been suggestions that all NAMA disposals should be via public auction (ebay has been suggested) and whilst some property transactions will be very complex indeed this is a subject that will be returned to on here in the near future.

Meantime, whilst recognizing that the information above is to an extent unverified and could be an elaborate attempt to drum up interest in one property, HT O’Meagher Reilly are contactable on + 353 (0) 862554060. The alleged reserve price from the unverified source suggests the land could be available at what seems like a bargain price.

UPDATE: 18th May, 2011. The reliable Jack Fagan in the Irish Times reports that the above land has now sold for €1.3m to a local businessman, working out at €17,567 per acre (just a pinch above the HT Meagher O’Reilly guideprice of “in excess of €17,500”. Hmmmm)

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