• Home
  • NAMA property for sale
  • About
  • The Developers
  • The Tranches

NAMA Wine Lake

Click the green link above for latest news and over 2,600 related articles. NAMA – National Asset Management Agency – part of Ireland's response to its banking crisis and property bubble

Feeds:
Posts
Comments
« NAMA appoints receivers to two more companies
NAMA to recruit more investigators to snoop on developers’ finances »

UK commercial property – second consecutive month with prices remaining flat

December 14, 2011 by namawinelake

Today sees the publication of the November 2011 IPD Monthly Property Index for the UK. The IPD (Investment Property Database) index is the only UK commercial index referenced by NAMA’s Long Term Economic Value Regulations (Schedule 2) and is used to help calculate the performance of NAMA’s “key markets data” shown at the top of this page.

The Index shows that capital values were flat in November 2011 and indeed prices have been more or less flat for over a year now. Prices reached a peak in June 2007 and fell steadily until August 2009 when the current rally started. Prices then increased by 15% in the year to August 2010 but since then prices are up a measly 2.0% and in six of the last 12 months the monthly increase had only been 0.1%. Overall since NAMA’s Valuation Date of 30th November, 2009 prices have increased by 11.5%. Commercial prices in the UK are now 34.1% off their peak in June 2007. On an annual basis prices are up by 1.6%. The NWL index is remains 831 which means that NAMA needs to see a blended increase of 20.4% in property prices across its portfolio to break even at a gross profit level (taking into account the fact that subordinated bonds will not need be honoured if NAMA makes a loss).

The table below shows the change in value of an index set at 100 at 30th November, 2009 and applying the month-on-month % increases in a compound manner.

The outlook for UK commercial property looks unclear, which is hardly surprising as the outlook for the UK economy generally is uncertain. Europe generally is trying to get to grips with the aftermath of the UK decision to veto a new EU treaty last week, with many UK domestic commentators suggesting the UK economy has been placed at greater risk by the move. Others suggest that the veto will safeguard the UK’s vital financial services sector. All seem to agree theUK’s actions are historic.

Economic growth in 2011 in the UKhas been subdued and an annual outturn of +0.9% is expected for GDP according to the Chancellor of the Exchequer, George Osborne’s Autumn Statement issued late November. Since 2007 the UK has committed to a programme of Quantitative Easing (printing more pounds) totaling GBP 295bn or 20% of its GBP 1.5tn GDP and inflation has been a feature of the UK economy since 2007 – CPI inflation has increased by 15.4% between June 2007 and November 2011. The latest forecasts for UK CPI and RPI inflation are for 4-5% in 2011 which will fall in 2012 but stay over 3% before falling to 2.3% in 2013. Despite the travails of the EuroZone and US economy, sterling exchange rates have remained highly stable in the past 12 months. The UK’s base interest rate has been 0.5% since February 2009 and the outlook is subdued despite the hefty inflation.

The UK has a large number of commercial property markets across Northern Ireland, Scotland, Wales and England. The Financial Times reported over the weekend that approximately one half of all NAMA’s assets are located in London.

Share this:

  • Twitter
  • Facebook
  • Reddit

Like this:

Like Loading...

Related

Posted in NAMA, Non-Irish property, Northern Ireland | 3 Comments

3 Responses

  1. on December 15, 2011 at 10:29 am christy

    @NWL

    What do you think is the net effect of inflation and currency depreciation on the value of NAMA’s UK loans?

    Were the loans made in sterling?


    • on December 15, 2011 at 10:50 am namawinelake

      @christy, difficult to say because of the extensive use of hedging and derivative instruments at NAMA which would mask changes flowing from inflation (15% since 2007 in the UK) and currency depreciation (20% since 2007).


  2. on December 15, 2011 at 9:24 pm John GALLAHER

    The loans were demoniated in sterling,and are paid,IF,in sterling.
    NAMA is a little ‘shy’ in its latest report on sterling exposure,but utilizes the US bank Citibank,for treasury functions.
    With the amount of forced sellers in the UK growing daily,it’s a very precarious position for NAMA.The Irish market is effectively on ‘ice’,for the forecable future so any weaking in the London market has significant implications.Add some political posturing to the mix,and it will separate the men from the boys.My money is on NAMA continuing at a rapid and accelerated pace exiting the UK market,correctly so.



Comments are closed.

  • Recent Posts

    • Test – 12 November 2018
    • Farewell from NWL
    • Happy 70th Birthday, Michael
    • Of the Week…
    • Noonan denies IBRC legal fees loan approval to Paddy McKillen was in breach of European Commission commitments
    • Gayle Killilea Dunne asks to be added as notice party in Sean Dunne’s bankruptcy
    • NAMA sues Maria Byrne and Graham Byrne in Dublin’s High Court
    • Johnny Ronan finally wins a court case
  • Recent Comments

    Wisemama on Eddie Hobbs’s US “partner” fir…
    Dorothy Jones on Of the Week…
    Sean Bean on Eddie Hobbs’s US “partner” fir…
    John Foody on Of the Week…
    Wisemama on Eddie Hobbs’s US “partner” fir…
    otto on Of the Week…
    Frank Street on Of the Week…
    Wisemama on Eddie Hobbs’s US “partner” fir…
    John Gallaher on Of the Week…
    John Gallaher on Of the Week…
    who_shot_the_tiger on Eddie Hobbs’s US “partner” fir…
    Sean Bean on Eddie Hobbs’s US “partner” fir…
    otto on Of the Week…
    Brian Flanagan on Of the Week…
    Robert Browne on Gayle Killilea Dunne asks to b…
  • Twitter Updates

    • Funniest case in Irish legal history? 1. ex-Cllr Fred Forsey convicted of RECEIVING a corrupt payment 2. developer… twitter.com/i/web/status/1… 3 years ago
    • Really looking forward to this at 9pm tonight, esp the first Garda on the scene. Well worth reading this background… twitter.com/i/web/status/1… 3 years ago
    • Tea time on the day the president of the ECB tells us we [in Ireland] are paying more interest on our loans than th… twitter.com/i/web/status/1… 3 years ago
    • “I am grateful for you to refer to Mr Sugarman...on the specific question of Unicredit, responsibility at ECB lies… twitter.com/i/web/status/1… 3 years ago
    • @JMcGuinnessTD now confronts ECB about "the honest whistleblower" @WhistleIRL and his disclosures of liquidity issu… twitter.com/i/web/status/1… 3 years ago
    • Details, including court documents of class action in New York against Ryanair and CEO Michael O'Leary.… twitter.com/i/web/status/1… 3 years ago
    • Draghi tells @paulmurphy_TD the ECB doesn't remove govts, the people do, that's democracy. Bet the people will be m… twitter.com/i/web/status/1… 3 years ago
    • Wow! Draghi says there is no net interest cost for the Anglo bonds whilst they're held by the Irish central bank. T… twitter.com/i/web/status/1… 3 years ago
    Follow @namawinelake
  • Click on date for that day’s posts

    December 2011
    M T W T F S S
     1234
    567891011
    12131415161718
    19202122232425
    262728293031  
    « Nov   Jan »
  • Blog Stats

    • 5,102,761 hits

Blog at WordPress.com.

WPThemes.


Privacy & Cookies: This site uses cookies. By continuing to use this website, you agree to their use.
To find out more, including how to control cookies, see here: Cookie Policy
  • Follow Following
    • NAMA Wine Lake
    • Join 10,037 other followers
    • Already have a WordPress.com account? Log in now.
    • NAMA Wine Lake
    • Customize
    • Follow Following
    • Sign up
    • Log in
    • Copy shortlink
    • Report this content
    • View post in Reader
    • Manage subscriptions
    • Collapse this bar
 

Loading Comments...
 

    %d bloggers like this: