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Archive for April 20th, 2011

It’s practically impossible to get a word out a NAMA representative at present without it being accompanied by a dark warning that NAMA won’t hesitate to take foreclosure and recovery action if developers don’t produce acceptable business plans. And there is more than a little of the training that teachers and police officers go through to quickly establish authority, about the way in which NAMA is presently appointing receivers.

In an interview with NAMA Chief Executive Brendan McDonagh and Chairman Frank Daly by former business editor of the Sunday Tribune, Neil Callanan in tomorrow’s Finance Times (free registration required), we again get the warning. This time it’s “it’s a business decision as to whether we can work with them or not … or whether they want to work with us”. It seems that 10 of the Top 30 developers won’t make it and “some may face bankruptcy”. So far I count recovery action against eight of what might be expected to be the Top 30 developers (Liam Carroll, Bernard McNamara, Paddy Kelly, Paddy Shovlin/Fitzpatrick Brothers, Derek Quinlan, Jerry O’Reilly/David Courtney (Radora), Capel Developments and Jim Mansfield). I do not regard the Sunday Times claims about Sean Dunne as credible. So there might be another few to come. The courts aren’t open for the holidays of course but will tomorrow be “A Long Good Friday” for another developer or two?

Elsewhere in the interview, the NAMA CEO is reported to say that he expects to dispose of “€2.5bn of commercial property in theUK” in the next three years. That looks low compared to the estimated €23bn of loans at par value that NAMA has absorbed that relate toUKproperty. It is not clear if NAMA will, additionally, dispose of residential property in theUK. Also NAMA tends to mean mainlandUK(that is, excludingNorthern Ireland) when it refers to theUK. Finally it is unclear if loans relating to property in theUKwill additionally be disposed of.

The concept of an Irish REIT (Real Estate Investment Trusts) makes an appearance. This was a manifesto pledge by Fine Gael and if correctly implemented might provide an opportunity for citizens to share in the eventual recovery in prices. The NAMA CEO is critical of theUK implementation of REITs.

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There are reports that NAMA has this afternoon appointed receivers to properties owned by Jim Mansfield. If confirmed, this will indeed be surprising – not for the appointment of receivers, NAMA is doing that almost daily these days. Surprising because Jim Mansfield was not previously associated with NAMA.

The colourful 71-year old Kildare businessman famously made his money in the 1980s after spotting an opportunity to sell machinery and equipment left in the Falkland Islands (Las Islas Malvinas) after the conflict there between the UK and Argentina. In more recent times, Jim has been associated with the Citywest Hotel and residential development. His other notable properties include the Weston Aerodrome, Palmerstown House Golf Club, Finnstown Countryhouse Hotel and Tassagart House. He controls a web of companies, some of which are incorporated in the Isle of Man. His sons, PJ, Jim Jr and Tony have been involved in family businesses. Jim’s companies have extended beyond property and include HSS Planthire.

Jim has been in the wars with his company’s finances for over a year. Last July 2010, Martin Ferris was appointed receiver to HSS Limited which controls the Citywest hotel, conference and golf complex, on foot of loans owed to Bank of Scotland (Ireland). The Irish Nationwide Building Society is also reported to have been a major lender. There is no confirmation from NAMA yet of the receivership.

There is a regularly updated list of all NAMA receiverships and court actions here.

UPDATE: 20th April, 2011. Reports (here and here) are now saying that the assets to which a statutory receiver, named as Kieran Wallace of KPMG, include the Weston Aerodrome, Palmerstown House Golf Club and six apartment blocks beside the Citywest Hotel in Saggart in West Dublin. Citywest is located outside the M50 ring road around Dublin in which NAMA famously controls 6-16,000 residential properties, so these apartment blocks will add to NAMA’s portfolio of Dublin residential property.

UPDATE: 24th October, 2011. NAMA has secured a liability order against Jim Mansfield personally at Dublin’s High Court despite the application being opposed by Jim on a number of grounds including the behaviour of the NAMA-appointed receiver. Jim claims that there was an offers of €11.9m for Palmerston House, and this was allegedly rejected by the receiver, Kieran Wallance of KPMG.  Mary Carolan at the Irish Times has the better reporting of the case. The liability order is for €74m and there is an extant application by Bank of Scotland (Ireland) for a liability order for an additional €204m. A couple of matters of interest are reported today (1) Jim claims that NAMA rejected offers for Palmerston House on the basis that the offers came from people associated with Jim (2) The judge stated that the receiver was not under an obligation to comply with NAMA’s wishes that sales not be made to associated parties.

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UPDATE: 7th July, 2011. There is a preview analysis here of the 2nd Allsop/Space auction being held on 7th July, 2011.

Even before last Friday’s Allsop-Space auction at the Shelbourne Hotel which saw 80-odd properties sold for just over €14m, there had been confirmation that there would be 4-6 “increasingly large” auctions held by the British auction giant together with its local partner. There is now confirmation on Allsop’s website that the next auction will be held on (Wednesday, 6th July, 2011.) UPDATE: 21st April, 2011. The Allsop and Space websites now say the auction will be on Thursday 7th July, 2011 with the auction catalogue published on 6th June, 2011 – as before there will be a special website for the auction which will go live on 4th June, 2011.

The venue hasn’t been announced but all Allsop British auctions tend to be held in upmarket hotels. The Shelbourne may be booked again, it’s not clear.(UPDATE 21st April, 2011. Indeed the venue is again to be the Shelbourne Hotel). In the Independent, the Space Managing Director, Stephen McCarthy says that the next auction is likely to have 200 properties, more than double the number of lots available last Friday. And it is estimated that some 1,300 will be brought to auction by non-NAMA banks this year. It is unclear if that is just for Bank of Scotland Ireland or includes Permanent TSB, National Irish Bank, ACC, KBC andUlster who are known to have foreclosed property.

There is still no word from the biggest forecloser of property NAMA. Also Allsop expect to have another four auctions in 2012. The 80 properties sold last Friday were indeed a drop in the ocean. NAMA reportedly controls some 6-16,000 properties within the M50 aroundDublinalone. This time next year, we will probably look back at the frenzy on display last Friday and smile at the naivety of some of the participants fretting over just 80 properties when so many more will shortly come under the hammer.

By the way the Independent claims the next Allsop-Space auction will be on July 7th. That is at odds with the date on the Allsop website. UPDATE: 21st April, 2011. The Allsop website has now been changed and the auction is now to take place on Thursday 7th, July, 2011 at the Shelbourne Hotel again.

UPDATE: 6th June, 2011. Allsop/Space has launched its catalogue for its second Irish auction being held in the Shelbourne Hotel on St Stephen’s Green in Dublin on 7th July from 12 midday. There are 87 lots listed at present, which is considerably less than the 200 lots seemingly promised some weeks ago. As before, there is a reserve price which may be less on the day but will not be more. There’s quite a mixture of property from a €30,000 reserve 3,000 sq ft site in Blackrock to a €1.45m semi-detached red-brick at 35 Ailesbury Road. There is the usual staple of foreclosed apartments in new developments in Dublin, though to my eyes, prices look a little harder than previous reserves. There are also far fewer commercial premises. This auction promises to attract a lot of attention, though I would be surprised if it matches the first auction in April 2011 for frenzy and mania.

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