It says something about the shocking lack of transparency in NAMA that to date the agency has confirmed the details of one sale, and one sale only – the Montevetro transaction earlier this year when Google paid €99.9m for a landmark new central Dublin office building from Treasury Holdings. And yet to date, as revealed in the IMF report on Ireland published today, NAMA claims to have approved €3.9bn of disposals. So with respect to the details of 97.5% of the disposals, there has been no word whatsoever from NAMA. Some transparency, huh?
Of course there is a considerable difference between approval and sale – deals fall through, anticipated funding doesn’t become available, circumstances change, buyers plump for competing properties. We just don’t know how solid the €3.9bn is.
What we do know is that in the 2010 accounts, NAMA booked a total of €363m of sales and in the Q1, 2011 accounts an additional maximum of €254m. So it would seem that the majority of the approvals hasn’t yet materialised into bookable sales.
It seems quite lax of the IMF not to have concluded something more concrete about NAMA’s progress, almost as lax as the IMF miscalculating in the box above €3.9bn as a proportion of €7.5bn and coming up with 43%, rather than 52%.
There is an attempt to track NAMA’s sales on here but absent any detailed reporting from the agency, it seems likely that many sales are going unreported. For example, Northern Ireland property group Beltrae Partners claims to have “originated and advised” on two major NAMA transactions totalling over €100m – the sale of an English nursing home portfolio and London student accommodation – neither of which has been reported.
NAMA gave itself a target of paying down 25% of its debt by the end of 2013 in its business plan published in June 2010. There seems to be some suggestion that this target made it into the IMF memorandum of understanding, thereby copper-fastening it as a commitment, but I cannot see this as a term of the agreement with our bailout friends which presumably means that the target can be amended by NAMA without seeking permission from the IMF or indeed the Government.
NAMA Wine Lake 
We’ve heard this spin before. “Approving” sales means nothing more than NAMA have “agreed” with developers that they can sell certain properties over a period of time. The term of which could be anywhere between now and ……. (fill in the blank). In practice this means that NAMA asks the developers to ask them (NAMA) to allow them (the developers) to sell a property over an agreed period.
(Don’t ask- I’m not a civil servant and can’t think like one – but I have my suspicions on the reasoning behind this convoluted process!)
There have been sales made by NAMA developers under these conditions, but as NWL says the circumstances and number of those sales are opaque.
In a way, it confirms one of the most striking and disturbing points made by the Primetime programme last night. NAMA was described as a kingdom within our republic, answerable to no-one; non transparent, an autonomous unit that dwarfs our economy and controls it. It’s our cuckoo in the nest.
This spin is coming from the IMF. Rightly, NAMA has not released any details until the deal goes through.
If they did, and it failed to complete through no fault of their own, it would actually look worse. For once, I think they are right to say nothing until further details emerges.
It’s all “subject to contract” – hehe! That phrase appears on estate agent boards outside suburban houses all over the place. Doesn’t mean anything in the long run, not until you’ve exchanged contracts, and not really until you’ve closed.
They should be shifting these assets at breakneck speed, because the prices are only going to collapse.
NAMA is the same old problem – insiders dealing for their own benefit at the expense of outsiders.
Those who are outraged now will be held in high esteem by the middle of 2012, and may be able to exert some influence to the good on voters’ intentions. I just hope people don’t vote for more state control.
“the shocking lack of transparency in NAMA” – er you’re not exactly a model of transparency there yourself.
What’s there to be transparent about? NWL is one man with a blog. There’s no secrecy or mystery. He even posts nearly every source for his info and figure. You might as well ask for more transparency at an aquarium.
@SG: Yes, we will have more State control and prices will indeed collapse.
The reason for this will be the proposed new UORR legislation which, if it drafted as rumoured, is the product of the most asinine legal mind in the country. If it ever passes there will be a major fall in values, chaos in the landlord / tenant relationship and no investment in the property market for the foreseeable future.
In a nutshell, just to clarify the position as it is rumoured:
1) The draft legislation allows for any lease entered into prior to February 2010 to be reviewed to market rent subject to:
2) The tenant showing that the rent currently payable makes their business unviable now or in the future.
3) The tenant showing that the rent reduction would make their business viable.
4) The tenant serving notice to landlord to initiate arbitration.
5) If no agreement, the parties enter mediation.
6) Finally, if still no agreement, apply to the circuit court to fix the rent.
7) There is to be a sunset clause of 5 years in the arrangement after which the lease will revert to its original level.
Where it really starts to enter the realms of Alice in Wonderland is in the clauses that allow an exit from the leases for each of the parties:
1) If the landlord finds that he is unhappy with the new rental level and has a problem funding his liabilities, he can serve a 3 month notice on the tenant to quit.
2) The tenant has a reciprocal option.
In other words, a signed lease means exactly nothing. Anyone can plan and execute an way out from it.
Talk about the creation of non commercial mind and a recipe for further enhancing the wealth of our bewigged brethren. The courts will be busy.
@nwl any chance they are being “stealth” as buyers tend to take advantage of distressed sellers…..
@who_shot_the_tiger
“Talk about the creation of non commercial mind and a recipe for further enhancing the wealth of our bewigged brethren. The courts will be busy.”
It could also greatly benefit all business sectors in the country through lower rents except of course the lease holders who will take much of the pain.
Any solicitor law firm barrister estate agency chartered surveyors on the “approved” list to overcharge irish taxpayer/Nama needs to be advised that bringing any action against the Irish taxpayer preculdes them form ANY work going forward that will thin the heard nicely also have a word with Nama developers/state controlled financial institutions.
@Dreaded: Any reduction benefits business sectors, but first they have to prove the necessity for it in terms of their own viability. In open court?
In fact most of the pain will be taken, not by the landlords who will most likely leave for a UK bankruptcy, but one step removed to the lenders, NAMA, the institutions, pension funds, and the banks themselves. Ultimately it falls, once again, on the taxpayer.
@John Gallaher. Unfortunately, it is the retail or business tenant not the taxpayer that will be subsidised. The taxpayer will end up paying for this if it goes through. The bill will be published this month. Due to be passed by end of November.
It is probably the most serious piece of commercial legislation ever to be considered by the Dail. And the most far reaching in terms of financial consequences.
For good or Ill? One can argue both sides. But it is not an elegant solution. It’s the sledgehammer alright and a badly designed one at that.
@wstt my apologies I was mistaken retailers are tax netural and so are their employees but pension funds are …….
@John. Under the proposed legislation retailers are being preferred and the bill falls on the rest of the taxpayers.
@wstt How can you say that retailers are being preferred by being asked to pay market rents?. And retailers are taxpayers?
@JG it will be interesting to see who will come out of the woodwork to challenge the legislation. Will it be one of our top ten bankrupt nama developers who are often the most notorious landlords (How could they afford the legal fees). Or will it be Irish Life or some other pension fund who rip their customers off with high charges, dud products and ropy investments.
And will the Government listen to the crowd that got us in to this mess – The Chartered Surveyors of Ireland, Developers, Bankers and the body where they are all now rehoused NAMA
@CMcC. Tenants ar e not being asked to pay market rents – they are asking to repudiate their contracts for lease; and they are asking for their rents to be marked to the current market.
Legally, it is clear that one set of citizens (landlords) are being dicriminated against in favour of another set of citizens (tenants). Hence the difficulty in drafting the legislation.
@CMcC Apologies. That should read “group” not “citizens”
@ wstt
‘Unfortunately, it is the retail or business tenant not the taxpayer that will be subsidised’
It can equally be argued that UORR was a bubble-era subsidy, which is now killing the SME sector. I have no connection to either end of the business, but what we are looking at here may be a necessary structural adjustment.
Fine Gael is caught between a rock and a hard place. It is under remorseless pressure to relieve SMEs but is afraid of the consequences in the property sector.
Either the UORR goes, or the SMEs wither on the vine, and fronts get boarded up. The commercial property sector gets hammered in all conceivable scenarios, and so do funds which have significant commercial property holdings.
Unless the world has changed, external money won’t come in until the casualties are thick on the ground, and UORR is distant memory..
Just to say that I don’t think the Department of Justice will be commenting on the Irish independent’s report this week which contained some specific claims which are striking fear and further uncertainty into the property community, particularly
“A lease would be judged on a standalone basis. “For example, if you have 12 shops across Ireland and 10 of them are doing quite well, but say two of them are crucifying you because of off-the-wall rent, you should be able to get a review on the basis of those two individual stores and not on the basis of your overall balance sheet,” the insider said.”
http://www.independent.ie/business/commercial-property/retailers-to-be-big-winners-in-new-upwardonly-rent-change-2867218.html
Of course it is not the duty of the Department of Justice to give a running commentary on its activities and even given the speculation about the vexed question of UORRs, it’s not its duty to comment on or deny media claims. That said, it seems the urgent need for clarity in the area of UORRs is recognised at senior levels within several ministries so hopefully we will get the heads of the bill or the blueprint for the legislation in coming days.