Ask any competent developer what property he expects to bring on-stream in the next couple of years, and you will be probably get a reasonably clear and detailed response. Of course these days in Ireland, developers have very limited access to funding and there are still serious economic uncertainties plus there is an oversupply in many sectors.
However if you were to ask NAMA the same question, you would expect robust estimates. After all, NAMA is sitting on a mountain of cash and even after paying back 25% of its bonds by the end of next year, it should still have a mountain of cash until 2017 when it needs repay the majority of its bonds. Not only is finance NOT a problem at NAMA, but NAMA assures us that it has “reviewed” 97%-plus of developers’ business plans. Plus NAMA has specifically committed to investing €2bn in Irish property development in the next four years. So you would expect NAMA to know what property it was bringing on-stream in the next couple of years.
But you’d be wrong to expect such information.
In the Dail on Tuesday this week, the Sinn Fein finance spokesperson Pearse Doherty asked Minister for Finance Michael Noonan for NAMA’s construction plans in 2012, 2013 and 2014. Given that we are constructing so few homes (see graph above from the September economic bulletin from the Department of Finance), NAMA has the potential to be a major builder or at least a major financier, and given that it has “reviewed” nearly all developers’ business plans and remember it acquired the first loans 2.5 years ago, you would expect it to at least be able to estimate what building was going to take place under its auspices. We know that NAMA is funding the completion of homes on the former Dun Laoghaire golf course, the Charlestown shopping centre and the building of a major new office block in Dublin North Docklands. But is NAMA going to be behind the building of 50,500 or 5000 homes in the next three years and how many million sq feet of commercial premises is it planning. Clueless.
Deputy Pearse Doherty: To ask the Minister for Finance the number of residential units in the State which the National Asset Management Agency plans, either itself or via its receivers or its debtors, to construct on or on which to complete construction in 2012, 2013 and 2014.
Deputy Pearse Doherty: To ask the Minister for Finance the square footage of commercial units in the State which the National Asset Management Agency plans, either itself or via its receivers or its debtors, to construct or on which to complete construction in 2012, 2013 and 2014.
Minister for Finance, Michael Noonan: I propose to answer questions 296 and 297 together.
I am informed by NAMA that it has no current plans to become directly involved in commercial and residential construction projects but that it will continue to support debtors or receivers with loan finance for viable projects. In that context, it has announced plans to provide loan finance of up to €2 billion over the next four years in commercial and residential assets located in the State, subject to identifying commercially viable projects from among those controlled by its debtors and receivers. NAMA may, where appropriate, enter into joint venture arrangements on certain projects. To date, NAMA has approved advances in Ireland of over €610 million to complete projects in residential, commercial, retail, leisure, and healthcare sectors and almost €400 million of this has been drawn down.
At this stage, NAMA is engaged with its debtors and receivers in the process of identifying projects which may be commercially suitable for development with a view to meeting prospective market requirements over a medium-term horizon and, in the light of this evaluation, its Board will determine its project financing plans. NAMA is also reviewing existing planning permissions and, where appropriate, will engage with planning authorities, through its debtors/receivers or directly, in cases where modifications may be required to render projects commercially feasible.
NAMA Wine Lake 
Do you have any sense of these NAMA Bonds. Their nature I mean. What in the market are they akin to.
What I’m after, NAMA says it’s repaying Bonds. Are they like T-Bills where they issued a series of €1000~ in 200-whenever, with maturity in 1-2-3-4-5-6 years. Getting €840 for the 6-year, €860 for the 5-year etc.
I keep hearing we’re paying x% or y% for this money. But how does this make any sense unless there’s a coupon on them. And that only matters if the coupon is designed to swallow inflation and is better than the ECB rate otherwise it’s free money, better really for we’re repaying less.
In fact with the twists and turns of all this you’d wonder if the goal isn’t being missed entirely.
mickey noonan: “NAMA that it has no current plans to become directly involved in commercial and residential construction projects but that it will continue to support debtors or receivers …”
Why does NAMA distance itself from projects? When receivers are involved, why don’t they seize the assets etc?