“NAMA, of course, is not a spectator; nor is it the hurler on the ditch who has the luxury of deriding the players on the pitch.” NAMA CEO Brendan McDonagh addressing the Construction Industry Federation conference in Dublin this morning
The NAMA CEO Brendan McDonagh delivered a speech to the Construction Industry Federation (CIF) this morning, the transcript of which is available here. There is nothing really new in the nine pages and Brendan continues to beat the drum as best he can to instill a sense of confidence in the Irish residential and commercial property markets. As he says, it is easy for those on the sidelines to comment (!) but NAMA has the responsibility of delivering.
What’s new? The regular audience here might be interested to see that Brendan is now using the yields on Irish sovereign bonds to emphasise the attractiveness of Irish commercial property. With the 5-year bond at 3% and yields in commercial property in the 8% zone, sure you’d be mad not to buy Irish property. It’s as good a contribution as any I suppose, but having this morning re-examined the crapola spewed forth in 2009 about historically high yields presaging the imminent bottom of the commercial property market, you might remain cynical. A yield is simplistically rent divided by value, and when both rents and values are unstable, then yield analysis is little better than scrying tealeaves.
A few other snippets,
(1) the launch of NAMA’s Qualified Investment Funds will be “shortly” and speaking of which, the Sinn Fein finance spokesperson this week asked the Minister for Finance Michael Noonan about progress with introducing the QIFs – the parliamentary questions are at the bottom of this blogpost.
(2) NAMA’s provision of €2bn of staple financing is, coincidentally, over the same period as its €2bn investment in Irish developments – four years! And NAMA says that “most of” the staple financing will be in Ireland though when Brendan says “NAMA will be investing of the order of €4 billion in the Irish economy over the next few years through our loan and vendor finance.”, you get the impression that most of the €2bn staple financing is earmarked for here. NAMA says the Irish commercial investment market was worth €200m in 2011, so you can see that NAMA’s presence in this market is dominant.
(3) NAMA will “shortly” be rolling out its deferred mortgage initiative to 750 homes on its portfolio.
(4) NAMA is examining commercial development in Dublin’s “central business district” in light of comments from the IDA about imminent shortages of HQ-sized offices in central Dublin.
(5) NAMA says Dublin residential property prices are down 60%, that there is some sort of stability returning to the market evidenced by the CSO’s index, but that there is unlikely to be any short-term recovery. NAMA says most of its portfolio is in and around major population centres and there is evidence of imminent shortages in some places.
(6) NAMA will demolish property on “health and safety” grounds. NAMA seems happy with its demolition of the apartment block in Longford. NAMA is investing €3m in finishing ghost estates and says that NAMA’s involvement in such estates is limited at 10% of the total.
Deputy Pearse Doherty: To ask the Minister for Finance when the National Asset Management Agency expects to make an appointment for the provision of investment management services for its proposed qualified investments funds, the tender for which was issued on 25 January 2012 with a closing date for bids of 6 March 2012.
Deputy Pearse Doherty: To ask the Minister for Finance when the National Asset Management Agency expects to make an appointment for the provision of custodian and fund administration services for its proposed qualified investments funds, the tender for which was issued on 3 February, 2012 with a closing date for bids of 15 March 2012.
Deputy Pearse Doherty: To ask the Minister for Finance when the National Asset Management Agency expects to launch its first qualified investment fund; the anticipated value of the QIF; the nature of the assets that will be managed by the QIF; and how the QIF will be marketed.
Minister for Finance, Michael Noonan : I intend to take questions 111, 112 and 113 together.
I am advised that NAMA, for and on behalf of the QIF, will make an announcement shortly as to the outcome of the tender competitions for investment manager and for custodian and fund administrator.
I am further advised by NAMA that the Qualifying Investor Fund (QIF) is expected to be launched, subject to regulatory approval, at the end of 2012. NAMA advises that the QIF will publish a prospectus which will set out the subscription process for QIF shares. Investment in the QIF will be limited to qualifying investors (as defined by the Central Bank rules).