Archive for May 8th, 2011

This must be one of the more bizarre NAMA stories but it illustrates a serious point : a NAMA developer is reported to own a pig farm in Cork which presently houses 57,000 pigs, the developer has significant property loans which have been transferred to NAMA and it is claimed that the developer is unable to afford to buy feed for the pigs, and that the only option now available is to unprofitably slaughter the pigs. Yesterday, Tom Barry, the Fine Gael TD for Cork East made an extraordinary intervention on RTE Radio News at One (listen to the clip here), when he claimed that NAMA does not have the expertise to deal with agricultural assets, that commitments allegedly given by the bank from whom the loan was originally obtained have not been fulfilled but that “it wasn’t in NAMA’s interest to slaughter pigs, it just doesn’t make any sense” – the claim from the rural TD was that it made more sense to manage the livestock to a point when they might be profitably disposed of.

The pig farm is apparently subject to an Allied Irish Banks (AIB) loan. The businessman who owns the pig farm was not identified but seemingly owes the bank in excess of €20m for property-related loans because that is presently the lower limit on AIB NAMA loans.

The serious point is in respect of the concern that NAMA doesn’t possess the expertise to evaluate agricultural businesses; the wider point is that NAMA may be taking over all sorts of loans relating to acquisitions as diverse as helicopters, fine wines, stock portfolios and race horses, and it is unclear how the agency will ensure the value of such assets is maximised.  In the present case, the politician for Cork East was exhorting NAMA to create an “agricultural review board” that might ensure decisions in respect of farms were expertly considered. There was an additional plea from Tom Barry for a junior ministry to be created to deal specifically with NAMA, which was “faceless and nameless” according to the TD. The Irish Times subsequently reported “a spokesman for NAMA said it was not directly involved in managing the farm, which was being handled on its behalf by AIB” and “it emerged, last night, that bank funding had been made available for feed”

UPDATE: 30th May, 2011. A second piggery has become the subject of a spat between politicians and NAMA. This time, it’s an unnamed piggery (or possibly piggeries) in south Tipperary where the sitting TD is Mattie McGrath who said in the Dail last Thursday 26th May, 2011  “There are cases in my county of pig farmers who have ended up in NAMA not being allowed to provide proper sustenance for their animals. They are given barely enough meal to keep going. NAMA wants them to sell the animals to repay some of their debts in order to make itself look good, yet it will not allow the farmers to feed proper rations to the animals to make them fit for sale. It is totally shoddy because those concerned do not understand how businesses are run. That is only one instance but it is the same way in the hotel industry. The people concerned have no understanding because they are accountants and solicitors. I do not say anything about them in regard to their careers but many of them are young and inexperienced and do not understand the situation. That is a basic flaw in NAMA which must be sorted out. These people have no problem about closing down accounts and bouncing cheques on suppliers and all of that, which causes trauma to businesses that have been trading for generations and decades.” The Independent reports a response by a NAMA spokesman that ” NAMA would never act in that way [depriving pigs of sustenance] and does not get involved in the minutiae of management. “


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Credible sources claim that 120,000 sq ft at the Paddy Kelly/John Flynn/Alanis-developed Belfield Office Park (pictured here) in Clonskeagh in south Dublin has been let to Irish betting giant, Paddy Power. The rent is reported to work out at €10 per square foot net. It is understood that Equity Properties which has been marketing the site, has successfully booked the transaction. The third-generation offices, regarded as “suburban” just a few hundred metres south of the generally accepted Dublin Central Business District number Hewlett Packard, the Office of Public Works, Vodafone, UCD, Skillsoft and Ericsson amongst its existing tenants. The suggested rent would establish a new floor for suburban south Dublin for where recent reporting has suggested is more used to €15-18 psf.

The transaction, if confirmed, will not augur well for commercial property prices in the short-term but does apparently show that there can be a buoyant market at the right price level. At the time of writing, neither Equity Properties nor Paddy Power has commented on the claimed transaction.

UPDATE: 11th May, 2011. The Irish Times today confirms the transaction though it seems that CB Richard Ellis and HT Meagher O’Reilly “handled the letting for developers”. The lease period is 15 years and there are breaks at 5 years and the initial rent is €13 per square foot though there is a rent free period of “around 18 months” which on a 5-year lease would reduce that €13 to just below €10. Paddy Power it seems to vacate its present HQ at Airton House in Tallaght. There is some more detail of the new accommodation in the Belfield Office Park – three adjoining six-storey buildings with double and triple-height receptions (see here for an example), 300 car-parking spaces. The remaining headquarters-sized office space in Dublin is as follows:

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