This morning, the NAMA CEO, Brendan McDonagh delivered a speech in Limerick to the Chartered Accountants in Ireland (CAI). The transcript should be available here shortly – UPDATE: available here now. There doesn’t seem to have been any significant change to the update speech delivered by the NAMA chairman, Frank Daly at the British Irish Parliamentary Assembly last week but here’s what I think you might find of interest anyway.
(1) NAMA has approved €3.5bn of sales, mostly in theUK– that’s €0.2bn up from last week
(2) NAMA says that in relation to Ireland “there are a number of other indicators which suggest a stabilisation of prices, including the reversion of office and retail yields back to pre-bubble levels” This might raise some eyebrows – Knight Frank last week indicated that prime office yields in Ireland were at 7.25% with upward pressure.
(3) There is a modicum of new information on the new mortgage product for residential buyers. NAMA says it has “had preliminary discussions with the two ‘pillar’ banks (AIB and BOI) and also with PTSB and we expect to have a more detailed engagement with them over the summer” and the aim would be to unveil a product in the “early autumn” NAMA thinks that total new mortgage lending will not reach €4.5bn in Ireland in 2011. There is no word on how much NAMA might introduce to the market.
(4) NAMA has recruited 140 staff to date. Although not mentioned in today’s speech, last week Chairman Daly referred to a full complement of 200 staff, so presumably recruitment of 60 staff continues.
No NAMA speech would be complete without a little dig at developers and in today’s speech it is thus expressed : “some of them have difficulty surrendering the grandiose lifestyles that they seem to regard as their continued entitlement”
There was no word on business plans already examined though NAMA says that it hopes to get to 200 by August 2011. No word on enforcement where there is some sign of a new ramping up in activity. Although not referred to this morning, it is understood that the NAMA annual report will be unveiled in the next few weeks which should put a more precise figure to the level of losses last year. The Q1, 2011 report is also due shortly after 30th June, 2011.
NAMA Wine Lake 
re developer lifestyle / salaries can we expect proposals to cut them in proprtion to salaries of semi state ceo’s and top civil servants?
To take the points as you listed them:
1. Approval of sales consists of NAMA telling London developers that they would like them to dispose of the London assets. For some reason, probably related to making NAMA’s ability to call on personal guarantees easier in the final phase (the end game), they want the developer to request NAMA’s approval for the sales, rather than have NAMA instruct them.
2. The statement is gobbledegook. A reversion in yields to pre bubble levels suggests that yields are moving upwards – which they are. Such movement is continuing and confirms that there is no stabilisation as yet at this point in the cycle.
3. The fact that total new mortgage lending will not reach €4.5bn in Ireland in 2011 is an understatement. It will be far less, unless the banks are up to their old trick of calling the roll-over or renewal of loans “new lending”.
4. NAMA has a staff problem. It relates to the quality of their recruits. An insider who works there told me that he despairs of the staff, most of whom have been given no responsibility, have no authority and have idea whatsoever in relation to what they are doing. John Mulcahy has to be regretting his move into the civil service after spending 40 years in the private sector….. form filling, impossible to get decisions, response time stretching into the horizon, frustration, developers having to move tenants into facilities because they cannot get approval out of the system… and that is just the stuff he cries into his beer about.
As for the developers and their relationship with NAMA, Mr McDonagh does not realise it yet, but the developers that can raise outside funding and re-purchase their assets at market value are NAMA’s best asset. But most of the professional developers have at this point “copped” the fact that they are dealing with amateurs and have made the decision to move to where the markets are alive, where banks exist and where their “bankers” are commercial not begrudging, vindictive and personal. As I said earlier, the developers now know that the end game is the complete personal financial demise for themselves and their families, whether or not they assist in the recovery of NAMA’s loans. And that resentful finality is more important politically than anything else – even if it means the collapse of the economy….. so why waste the time and effort. There’s a whole world out there, in all senses of the word.
@WSTT, many thanks for that. On the issue of yields, during the boom yields reduced as rent didn’t keep pace with the appreciation in capital values so we had 5-6% yields – so we had rent of 5 per annum and property worth 100. In the bust, yields rocketed as rents reduced by less than the collapse in capital values so we had ~7% – or rent of 4 and property worth 65. If you believe the Knight Frank report last week the yield for prime Dublin offices is 7.25% and is tending to increase. That tells me that capital values are continuing to reduce.
So my read of the NAMA statement is not that it is gobbledegook but that it’s just not true. Yields are still elevated with upward pressure suggesting we have some downard pressure on capital values still.
@WSTT
Re NAMA staff:
You must have missed the nice bit the presentations about “cascading” levels of responsibility and authority.
Not much good being at the bottom of the cascade, if you have to go back to ask the head honcho to turn on the tap every time you need to do something.
re “It relates to the quality of their recruits”.
I myself never blame the staff anymore. Most are perfectly capable of doing a job if they are allowed to do it and get on with it. Generally the problem is lack of definition of sensible objectives and failure to devolve authority.
Agreed NWL; Untrue is a much better description. I sometimes just get frustrated and tounge-tied by the blatant :spin” and manipulation of the truth in this whole charade.