Archive for April 4th, 2012

We certainly get a lot of bang for our 150,000 bucks that is paid to the NAMA chairman, the hawkish Frank Daly. He has elevated the promotion and defence of NAMA into an art form and gave an interview on a Dublin radio station yesterday. The Broadsheet.ie has painstakingly transcribed the interview, and the transcript is available here.

There’s not really anything that the regular audience on here won’t have known before – NAMA has so far had €350m of asset transfers reversed/additional security provided, by developers. NAMA still isn’t saying if any of this is dependent on NAMA cooperating with, or advancing new funding to, developers. At least Frank is no longer equating these reversals and additional security with NAMA’s operating costs over ten years, costs which will total €194m in 2012 alone according to NAMA’s latest projections.

Frank might want to expand his vocabulary to describe lending practices at Irish banks to give some variety to his use of “appalling”.

The only hook in the entire interview was when Frank said “and by the way being declared bankrupt in the UK does not mean NAMA loses interest in you -far from it” You’ll recall that NAMA is still pursuing John Fleming who was discharged from bankruptcy last November and is presently in the UK courts trying to get an attachment order against John’s income for the next three years. Tom McFeely and the Grehan brothers, Ray and Danny have also declared themselves bankrupt in the UK.

And Frank wasn’t being exactly frank when he referred to a developer managing a portfolio worth €2bn in the context of being paid a “six figure salary”. Remember NAMA is paying €55m in overheads to 41 developers. And NAMA has yet to receive European Commission approval for its valuation and due diligence in the acquisition of €47bn of the overall total of €74bn of NAMA loan acquisitions.

But all said, a fine defence of NAMA again from Frank though at this stage he could probably do it in his sleep.


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Property powerhouse and NAMA valuation panel member, CB Richard Ellis (CBRE) has today published a quarterly review of the Dublin office property market in Q1, 2012. Here’s a summary.


“It’s shaky out there” might sum up the experience of Q1. Although the amount of accommodation rented in the quarter was disappointing by recent standards, CBRE expresses optimism that business will pick up in coming months. Sales of office buildings in the quarter were equally disappointing and the market is looking to what is expected to be €60m of transactions with two office blocks, both in south Dublin Docklands – One Warrington Place and Riverside II. One Warrington Place was expected to sell to Prudential for a shade over €27m, but that deal has gone south over price concerns, though CBRE say that a US buyer is now pursuing the property but it is understood on here that a yield of 7.5%-plus is being offered. Riverside II on the banks of the Liffey is understood to be under offer, with Pramerica said to be the buyer. Despite Budget 2012 being one of the most commercial property-friendly budgets in recent years – stamp duty reduced from 6% to 2%, capital gains incentives for property held for longer periods and the abandonment of Upward Only Rent Review changes – there seems to have been little bottom line activity in the past four months.

Vacancy levels remain elevated, with central Dublin coming down a squidgen during the quarter and vacancy elsewhere increasing. There’s no development of new office property at present though that is set to change in weeks with an announcement expected on here with respect to the Anglo HQ shell on North Wall Quay. However there may be refurbishment of existing stock which is not being captured by CBRE’s reporting.

CBRE says that prime rents in central Dublin are now at €296 psm (€27.50 psf) and “are stabilising”

It will be another three weeks before we get the two Irish commercial property indices for Q1, 2012 – Jones Lang LaSalle’s and SCSI/IPD’s,  but the betting on here is that we’ll see a 2-4% decline, though given the absence of transactions and conflicting economic data – gloomier forecasts yet decent Exchequer data – it will be a challenge to assess values.

With NAMA controlling an estimated €6-7bn – by reference to current estimated values, NAMA paid €9.25bn by reference to November 2009 values – of commercial property and with Ulster Bank, Bank of Scotland (Ireland)/Certus and indeed AIB readying portfolios for sale, the market is agog to see where pricing will go, but with abundant supply, high vacancy rates, anaemic economic growth, credit restrictions and potential distortions by NAMA, pricing is unlikely to get much support in the short-term.

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