Willie Penrose, the Minister of State, Department of Environment, Community & Local Government with responsibility for Housing & Planning, has told 98FM radio in Dublin that Cluid Housing Association has bought 58 apartments in the Beacon South Quarter in Sandyford (see map above) from NAMA. The Department is involved with the transaction on account of its control over the financing of the deal (see below)
Of the 58 apartments, 34 will be rented to people on the local authority list with reduced rents. The remaining 24 apartments will be privately rented. The purchase price has not yet been announced but queries have been submitted to the various parties to the transaction, and this post may be updated later.
The Beacon South Quarter was developed by NAMA Top 20 developers, Paddy Shovlin and the Fitzpatrick brothers, Patrick and Tony. The website of the shopping centre which is part of the development describes Beacon South Quarter as having been “developed by Landmark Developments as a new high end retail, residential, office and hotel quarter for South Dublin. With over 25,000 square metres of upmarket retail outlets, 1,100 luxurious apartments and a vibrant cultural centre” Last October 2010, having absorbed the loans secured by the Beacon South development, NAMA obtained an order against the developers in Dublin’s High Court (there was no judgment, NAMA merely secured an order) and a receiver was appointed by NAMA to the properties. It is understood that the sale announced today was concluded on behalf of NAMA by the receiver, Simon Coyle of Mazars (pictured here).
According to the housing association, and in respect of the funding of the purchase “a loan of approximately 75 per cent of the purchase price has been approved in principle by the Housing Finance Agency (HFA), the first such transaction by the HFA. The remaining 25 per cent is being funded from Clúid resources and the Capital Advance Leasing Facility (CALF), a new facility that has been created to support the acquisition or development of new homes using funding from financial institutions.” CALF is indeed a new facility and seems only to have been announced by the Department of Environment, Community and Local Government on 11th July, 2011 – the facility which combines State support and finance from “financial institutions”. Queries have been submitted to the Department for further information on the facility, and this entry may be updated with any response.
So the key question, how much were the properties sold for and how will the NAMA sale price compare with existing prices? As regards existing prices, there is no information on settled prices publicly available; and just to confirm, there were no sales of Beacon South property in the two recent Allsop/Space auctions. So we are left with asking prices, and a quick browse through DAFT.ie returns seven properties in the Beacon South Quarter and the results indicate reasonably high spec apartments for sale with asking prices of about €250-300 per square foot. If average apartment sizes are 800 sq feet, the NAMA transaction might be expected to be worth €14m. NAMA has recently been indicating prices achieved on individual sales (eg Montevetro and the Jack Yeats painting) – so hopefully we will soon get the sales price information for this transaction. It should after all indicate NAMA’s view of the market.
UPDATE (1): 27th July, 2011. There is a press statement from Minister Penrose (pictured here apparently handing over car keys to the Cluid housing association). There is no additional commercial information available in the release which focusses on the social benefit of the transaction. It seems that there won’t be further information forthcoming from either NAMA or the receivers either, though efforts to reveal the purchase price will continue.
UPDATE (2): 27th July, 2011. There appears to be an enlarged press release from the Cluid Housing Association in which there is some financial information. The total purchase price is €10.3m, or an average of €177,500 per apartment (elsewhere it is confirmed there are a mix of one- and two-bedroom flats). The flats presently for sale in the Beacon South Quarter on DAFT.ie are 2-4 bedroom, with minium 800 sq ft. There is no one-bedroom flat for sale. So, it’s difficult to say how the purchase price announced today compares with existing asking prices.
UPDATE: 29th July, 2011. The Cluid Housing Association has confirmed that the apartments purchased from NAMA comprised 12 x 1 bed units, 44 x 2 bed units and 2 x 3-bed units.
NAMA Wine Lake 
interesting 2005 link on this subject
http://www.independent.ie/business/irish/sandyford-represent-the-latest-stage-in-the-inexorable-rise-of-paddy-shovlins-been-notable-for-his-ability-to-strike-up-the-right-partnership-at-the-right-time-224893.html
According to your numbers, if they sold for the asking price it would be around 220,000 euros per 800 sq ft unit. I would assume this would demand a rent of around 1,250 euros a month for an investor. This is just a guess, as I am far from an expert on Irish property. This seems like a more reasonable methodology to determine price rather than one influenced by public money.
From what I gather, it is very difficult to obtain detailed and current statistics on the Irish real estate markets. The US, which is noted for the opposite still manages to come up with the odd surprise (see below). Hitting bottom in 2011/12 seems very unlikely for the US or Ireland.
http://www.theatlantic.com/business/archive/2011/07/chart-of-the-day-the-housing-market-is-worse-than-you-think/242514/
I’d never heard of Cluid before. Are they a charity or a quango?
This is their 2009 annual report: http://www.cluid.ie/_fileupload/Cluid%20Annual%20Report%202009(1).pdf
They’ve a big balance sheet. I’ve only taken a quick look. Assets over 525mn (for some reason they don’t seem to have marked the property values between 08 & 09). Equally their creditors seem to be state organisations to the tune of 520mn.
This note: “Housing loans are secured by specific charges on the Association’s land and housing properties. No capital or interest repayments are required to be made on the above loans provided that the Association continues to comply with certain specific requirements of the Local Authorities with regard to the properties for which housing loans have been provided.”
Does this mean that the state gets no income from 520mn ‘social housing’ investment? i.e. is there a dividend paid to the state or is the rental income waived once property is maintained by Cluid?
oh, I mean’t to add that the Beacon transaction is the state selling to itself (as Cluid’s liabilities are to state bodies).
In terms of this transaction if true then I wouldn’t be paying too much attention to it in terms of selling price or price paid given that at the end of the day it is the State involved at both ends of the Transaction,however may suggest at what NAMA value such properties at going forward
Didn’t know where else to post this question so I’m just putting it here: if a NAMA building was squatted who would be the ‘owner’, the approval of whom the police would need to evict???
Also, is it possible to contact NAMA?
And how do you go about renting a property from NAMA? Can you make an offer for a building that’s not on the market?
@Mick, NAMA has said that it positively welcomes contact with information if its property is causing a nuisance, so I’d recommend you do just that
Contact details here – http://www.nama.ie
As to the “person” responsible for a building secured on a loan that has been transferred to NAMA, in the first instance that should be the developer. Unless NAMA has foreclosed.
As regards acquiring property from NAMA, the agency says that it meets with 50+ buyers per week, so again if you want to buy, contact them.
De facto these can be deleted for the purposes of price statistics. They have been removed permanently from the market.
It’s an interesting bit of smoke and mirrors for where is the Housing Finance Agency likely to get finance in the open market.
jake another option is……….
http://www.bloomberg.com/news/2011-07-27/bank-of-america-donates-then-demolishes-houses-to-get-rid-of-foreclosures.html
@ John Gallaher
Even better idea. Who says you can’t move property? The free market at its finest.
http://jobs.aol.com/articles/2011/07/27/detroit-companies-pay-employees-to-live-downtown/
SoCoDu middle class must be quaking in its boots! Social Housing in the Beacon Quarter? Where next – Sorrento Terrace?
@Bunbury, that crossed my mind as well. These appear to be high spec apartments, wooden floors, tiling, floor to ceiling windows, balconies, premium kitchen and bathroom, decent sizes, not sure of 1-bed but 2-beds seem to be 800 sq ft ex balcony. Concierge, fountains and grounds. And not at all at bad location in respect of shops and schools. That said, is it not a tad snobbish to imply this is too good for social housing? It is a scandal in Ireland at present that we have such a stock of vacant high spec property which has collapsed in value, and then we have what? 100,000 on housing lists.
Well, I have been saying for some time that the plight of the middle classes forced out of their homes will have serious political reprecussions. Morgan Kelly already alluded to this in his prediction of the rise of a “far right, anti-traveller” party.
This development by NAMA simply means that in addition to the people forced to move out of their homes and into less desirable accommodation, the people who could just about stay in their homes now face the prospect–real or imagined–of their home being made less desirable by the Government, though policies designed to use up the surplus housing stock.
Actions like these, combined with the economic malaise, give me the dread feeling that inner city Dublin will be turned back into a tenement block by the government’s policies.
It seems that it’s every property owner for themselves, and the devil take the hindmost.
Touché!
I’m a snob. But I bet that’s the gut reaction of many people on hearing this story. I plead guilty to having a human nature.
The 2 beds were asking €475k to €520k back in 2007
http://www.irishpropertywatch.com/salesSearchResults.php?Address=Beacon+South&Beds=2&Type=any&Region=Co.+Dublin
The 1 beds were asking €350k to €380k
http://www.irishpropertywatch.com/salesSearchResults.php?Address=Beacon+South&Beds=1&Type=any&Region=Co.+Dublin
This has been trailled for a number of months. I think I broke the original story of why this was planned – HFA borrowing provided to housing associations to get some of the residential units off Nama’s books without putting it on the exchequers. It’s an idea that makes sense
@ Neil Callanan,
This transaction looks like a roundabout way of the state increasing its social housing stock. Are you saying that the state is applying financial trickery so this isn’t counted in national debt figures? This seems a bit Greek.
On a more general point, where is the HFA accessing funds? AFAIK they were rolling over short term debt, are they still able to do this? Is there a green jersey enabling these notes safe passage to the vaults of the ECB? Otherwise, how much is their borrowing costing them?
Thanks namawinelake. I’ll contact NAMA. We have a campaign for a particular building: campaigncityarts.wordpress.com.
Is it possible to know if a specific building has been repossesed or is in recievership or whatever? When are NAMA going to publish the promised list of their portfolio?
Thanks again.
@Mick, yes the list of foreclosed properties has now been published. There’s a specific entry here dealing with this major release of information by NAMA.
https://namawinelake.wordpress.com/2011/07/28/revealed-at-last-the-nama-properties-subject-to-enforcement-action/
Great. So if a specific building doesn’t appear in the list of foreclosed properties that means that the loan/asset is in the loan management strand of NAMA? Does that mean that the developer has total control over the asseet or does NAMA have a say? Can NAMA take unilateral action with regard to a property that has not been foreclosed? Is there any point in contacting NAMA with regard to such a property? If a property has not been foreclosed upon does that mean that the developer has submitted a viable business plan, or could it simply be that they haven’t gotten around to it yet?
More broadly, is NAMA a bailout for developers? Is the memarandum of understanding it makes with developers ‘kinder’ than a bank might be? Does it prevent them going bankrupt?
Sorry for all the questions but I’ve been struggling with this for so long and this is the only place I can get some answers!!!!
Willie Penrose “The “days of 100 per cent capital funding are gone, the money isn’t there”. Direct building of social housing was “no longer tenable”, he said
.”
I dont get Penrose’s comment.
The Money isnt there.
Why do they need money? Nama should take ownership of the properties. Then the state own them and no money is required at all? They then own a load of empy buildings that can be used for social and affordable housing.
Then the state could charge rent on the properties. Are all these middle men and profit centres being created for the sole purpose of keeping the losses off the national debt? If so they are paying one hell of a premium.
Cluid are very active in Belmayne off the Malahide Road adjacent to ClareHall.They have purchased almost an entire block of apartments there.
Cluid are a registered charity so they dont pay stamp duty.
I understand they will be installing people on the social housing list in these apartments.
About 18 months ago Belmayne featured on a PrimeTime programme highlighting a couple who bought a duplex at the peak of the housing bubble for around 500,000 euros, (going on memory so my figures there might be a bit out).
Dublin city Council is using a housing agency to purchase 49 units for social housing at David Daly/Albany Homes’ Clare Village scheme out the same way for nearly E7.5m. Wrote about it in ST last Sunday week.
“Experience has shown that AMCs with clearly defined, focused, and consistent goals are more likely to be effective. In some instances, such as the United States, social objectives were added to the asset management objectives of the AMC. The RTC was required to promote social goals in the areas of affordable housing and historic preservation by developing programs and giving preference
to buyers who would meet program goals.
The practice of mixing goals, and especially establishing conflicting objectives, is not recommended. Fortunately in the case of the RTC, the vast majority of the assets were not subject to social objectives and it was able to pursue its rapid sale strategies with success.”
The above was written by NAMA board member Steven Seelig (when he was at the IMF) in his 2004 IMF Policy Discussion Paper “Issues in the Establishment of Asset Management Companies.
It would seem from NAMA’s actions that he has changed his mind.
if I am a developer and nama has my properties and they are chosen to be purchased by the state for social housing today, is that
good, bad or neither?
and if a developer does not meet the social housing commitments with his local authorities is this normal or unusual.
Any thoughts?