Stop Press: NAMA is selling a major Irish property and for a change, is offering it on the open market

Yes the title above is meant to be sarcastic after NAMA’s recent sales in Corkwhere it sold one major land-bank with marketing apparently confined to sticking a “for sale” sign up in a field and another €100m 450-acre land-bank was sold without the property ever coming onto the open market. At least the Edward Square shopping centre is to be fully marketed by joint selling agents DTZ and DNG, according to Jack Fagan’s report in today’s Irish Times. The asking price for NAMA Top 10 developer, Gerry Barrett’sGalway city centre shopping “enclave” which comprises just eight stores is €27m, but that price represents an initial yield of 8.6%. We should at least be thankful that this property is coming on to the open market…

Today from 5.45pm, there will be a debate in the Seanad on Senator Mark Daly’s bill aimed at forcing NAMA and the IBRC to produce comprehensive lists of property for sale and then to publish sale prices after sales are concluded. The Bill is available here with commentary. The Bill was first introduced before Christmas 2011 and is just now getting its first airing, it is likely to be shot down but that shouldn’t detract from the legitimate and important issues the Bill tries to address. Fianna Fail Senator Daly from Kerry – pictured below –   has spoken out before and suggested shenanigans at NAMA in its disposal of property below market value to people associated with the defaulting developer, but has thus far refused to provide details, even using his privilege in the Seanad.

 

NAMA is disposing of an average of €750m of property each month EVERY MONTH by reference to original loan values. In most cases, it is the developer or receiver that is selling the underlying real estate asset or the loan. But each of these sales represents an individual asset, an individual buyer and seller, it is not as if NAMA is selling litres of milk, kilowatts of electricity or cubic feet of gas. And what external oversight is there of these disposals, most of which are below the value of the outstanding loan and accordingly involve a loss for the Irish taxpayer? NAMA says that it has the Comptroller and Auditor General on site keeping an eye on its activity including disposals. “What”, you might ask “does the CAG know about domestic and international loan and property sales?”

The Bill is problematic because NAMA will have commercial and contractual reasons for not disclosing information, not to mention the confidentiality requirements laid down by the NAMA Act. But at the same time, NAMA is crystallising tens of billions of losses for the Irish taxpayer and we know next to nothing about these losses. The NAMA accounts are so top-level and so distorted by accounting convolutions that we can discern very little – NAMA has made a lifetime profit of €300m from disposals so far of its best and most liquid assets, and that’s about as much as you’ll get, though there is a modest attempt on here to track NAMA sales.

The debate in the Seanad will be reported here over the next day or two. It behoves those who object to the Bill to suggest workable alternatives. The debate amongst the 60 senators who each cost us €65,621 per annum plus allowances, expenses, pension and other perks can be viewed live online at the Oireachtas website and it might be an opportunity to see just how valuable this organ of Irish government is, and whether or not it is an unnecessary undemocratic luxury as some claim, or a valuable store of wisdom, expertise and lifelong experience as others claim in defence.