NAMA must be glad that its operation has captured Derek Quinlan’s UK lending. Whilst the sale on Quinlan’s South Audley Street car park might have temporarily stalled, it seems that there are plenty of bidders for the property and that NAMA will see a tidy profit in 2011 from the sale of the Mayfair carpark with planning permission to develop luxury apartments. A few kilometres east of Mayfair lies the Docklands area which was regenerated in the 1980s and 1990s and today hosts many of world’s top financial companies. Quinlan along with veteran property investor Glenn Maud acquired 25 Canada Square in 2007 for GBP 1bn and it is expected to be placed on the market in the New Year with a price tag that would see a substantial part if not all of Derek Quinlan’s borrowings on the property repaid to NAMA. The building is presently the subject of a 26-year lease to Citigroup which expires in 2026.
Today sees the publication of the UK November 2010 IPD Monthly Property Index – the index covering UK commercial property up to the end of November 2010. The IPD (Investment Property Database) index is the only UK commercial index referenced by NAMA’s Long Term Economic Value Regulations (Schedule 2) and is used to help calculate the performance of NAMA’s “key markets data” shown at the top of this page.
The Index shows that capital values are increasing but at a vastly reduced rate than earlier in the year. The Index rose by 0.1% in November 2010 compared with October 2010. Overall since NAMA’s Valuation Date of 30th November, 2009 prices have increased by 9.8%. Commercial prices in the UK are now 35.3% off their peak in June 2007. On an annual basis prices are up by 9.8%. The NWL index is now at 912 which means that NAMA needs to see a blended increase of 9.7% in property prices across its portfolio to break even at a gross profit level (taking into account the fact that subordinated bonds will not need be honoured if NAMA makes a loss).
The EU stress test of selected banks published in July 2010 had a benchmark scenario of 0% growth in 2010 in UK commercial prices. Year to date, we are up 6.6% (the data at the top of this page is from Nov 2009 – NAMA’s Valuation Date – not Jan 2010) which would imply that December 2010 will see a drop of 6.6% which is highly unlikely – it now seems that the stress tests that gave AIB and Bank of Ireland clean bills of health were not so accurate.
Given that NAMA has valued the loans it is acquiring at 30th November, 2009 it would seem to make sense if it disposed of UK property first given the pressure the agency is under to generate cashflow and some sales – it hardly makes sense to sell off Irish property which has dropped by 10% since last November unless the assessment is that it might continue to fall and not recover for a considerable period, possibly beyond NAMA’s life expectancy (or that a future recovery in UK property would exceed any falls in Irish property).
The first table below shows the month-on-month % change in commercial property capital values since 30th November, 2009. The IPD index is broken down into three components – retail, office and commercial. The second table shows the change in value of an index set at 100 at 30th November, 2009 and applying the month-on-month % increases in a compound manner. Overall it shows that commercial property in the UK is worth 9.8% more at the end of November 2010 compared with the end of November 2009.
NAMA Wine Lake 
Dear Nama Wine Lake,
We will all leave soon as Nama/Nazi Liquidation Agency is about to destroy thousands of property developers, builders, sub contractors, Architects, Engineers and QS etc etc etc and
their families.
The Developers Nama plans and more importantly the Nama response to the developers plans are designed to destroy the individual and take all their assets. There is no logic to their methods.
The politics and destruction of the individual seem to trump the idea of creating value or a market in the assets. Nama and its very inexperienced staff intend to destroy thousands of individuals in the coming months.
They will attack the easy targets by bullying, threatening, and using the Nama act to take their assets, houses, contents, cash and future earning ability. Note the prison
terms outlined in Nama act. This is war time legislation akin
to Nazi Germany.
Nama’s onerous terms and conditions which will be imposed on every individual (and families) are designed so that all will be never be allowed to recover. It will be Nama jail for the rest of their lives. Many will die from the stress, cancer, and heart attacks. By chasing the debtors and not protecting the asset and trying to increase asset value, Nama are completely failing in their mission to make money for the Irish taxpayer.
The staff met to date have no property development experience, are incapable of making the simplest of decisions, and already have created a civil service mentality. They will act at all times in the interest of Nama and not protect and create value in the asset they acquired.
Nama will serve up the heads of property developers on a regular basis for the baying Politicians and Public but will not be able to make profit on the loans they recovered at steep discounts. Quite an incredible to think that Nama are that
incompetent.
Early next year BoSi will start selling off loans at massive discounts and other non Nama banks will follow which will mean Nama will be playing catch up. How will Nama react?
Will they offer steep discounts on loans to free up the market or chase individuals to pay debts. At the very least some liquidity may return to the market and Nama will not be able to stop this from happening.
Its important to state that not one Nama developer plan has been signed off by either party. The terms of latest one
issued by Nama are so onerous that suicide is a better option. There is now a general feeling in the Property Developer community that its not possible to trust or work with Nama because they are effectively out to destroy thousands of individuals, including many of the Professional Classes and a huge section of the Irish middle class.
The fee’s Nama are paying to a small number of Legal and Accountancy practices are beyond belief. Hundreds of millions of euro’s have been wasted on duplication of work, quadruple valuations, and multiple formations of Nama plans. The EU/IMF memorandum of understanding has virtually wiped out all the financial assumptions that Developers would have used in their Nama plans.
All the money that has been spent on producing and evaluating the plans has been wasted as a result of Nama’s misguided instructions to Developers.
The plans and assumptions were impossible to achieve even before the IMF / EU memo so at least that now that can be openly acknowledged. The memo changes everything.
It is impossible to pay back loans in three, five, ten or even twenty years as there is no market or solvent banks and Ireland is broke. There are very few loans in Ireland that are making capital repayments and the some that are making repayments are only because they are hugely over rented buildings and on low bank margins.
Its also important to note that capital repayments creates a tax liability problem for individuals that Nama or the Government has not even though about. Selling assets in the coming years will also create CGT liabilities another issue that Nama or the Government have not addressed.
Its only a matter of time before the high rents come down (EU/IMF memo)and many loans will be lucky to cover the interest. So its important to re-state that the Nama repayment plans from day one have been a lie created by Nama and the Government to deceive the Irish taxpayers.
Everyone in the Property Development community know this is a fact so why is Nama continuing to lie to everyone?
Nama is clearly a liquidation agency of the debtors and slowly destroying the assets they acquired.
There is no easy solution except to change the way Nama is operating. The CIF/Lombard Street Research report is a place to start but many more changes need to made.
Should Nama not change and proceed with their current methods and speedy pace, there is a clear solution to all the individuals associated with Nama and that is file for mass bankruptcy. Its their final solution and not the Nama final solution.
We remember the fallen, the victims, the horrors they taught us about, and the love and laughter that helped them survive it.
Your sincerely,
NamaJew.
“it hardly makes sense to sell off Irish property which has dropped by 10% since last November unless the assessment is that it might continue to fall and not recover for a considerable period,”
This is true. And it will fall. There is no reason that I can see why it should change course.
My observation of the framework of the business plans seen to date lead me to believe that NAMA has two objectives:
1) For the sake of political and public perception – bankrupt the 5,000 builders and developers over the period of the business plan by sweeping their bank accounts and appropriating the family homes by whatever means possible. This is why their business plans will not succeed (turkeys don’t vote for Christmas!)
2) Make a profit even if it means hoarding the property assets.
This latter objective and method ignores the bigger economic picture. Without a functioning rebased market and bank liquidity we are all fc*ked and we will lose a generation to the modern day equivalent of the coffin ships.
But we have little hope. NAMA is run by those who have been indoctrinated into the civil service mindset of their revenue commission/CAB mindset of their executive board. It is pretty much as NamaJew suggests.
It just remains to be seen if the builders and developers have the cojones of their forefathers and boycott this plan or if they are really just turkeys.
Sorry, that para is gobbledegook (no turkey pun intended!). It should read:
“But we have little hope. NAMA is run by those who have been indoctrinated into the civil service, revenue commission/CAB mindset of their executive board. It is pretty much as NamaJew suggests.”