NAMA is spending €2bn of your money investing in developments subject to loans to its developers – nothing new in that, NAMA announced that investment last May 2012. But trying to get any detail on that investment out of NAMA is generally like getting blood out of a stone.
By a happy coincidence, and just as certain Northern Ireland politicians have been lining up to criticize the Agency after foreclosing on loans attached to the Kennedy Group, the Agency has today announced a GBP 9m (€11m) investment in a 95-unit housing development in Dundonald, south-east Belfast. And it is another coincidence still that the criticism of NAMA in the Kennedy Group foreclosure has been limited to politicians from the DUP – Messrs Campbell, Wilson and Paisley junior – and lo-and-behold, Dundonald is a DUP-stronghold, its British Member of Parliament is Jim Shannon of the DUP, and four of the six MLAs from the constituency in the Northern Ireland Executive are from the DUP.
NAMA says the development will generate 100 new jobs over an 18-month period, and that the site has planning permission for 510 homes in total, and that after the construction of the initial 96 units, there may be further construction “in subsequent phases subject to market conditions and the success of the initial phase”
This is the first time that I can recall an announcement of a specific investment anywhere by NAMA in this way. Veterans of the Troubles who had engaged in extortion of businesses and protection rackets must be very impressed, though of course, there is absolutely no suggestion of criminality on anyone’s part here.
The development itself is at the 96-acre Millmount site in Dundonald. And there will be some relief that the dithering over the development appears to be coming to an end. The site was originally owned by the Taggarts but was acquired – using loans from Anglo Irish Bank thought to be GBP 70m – by a partnership in which the Lagan Group featured. NAMA acquired the loans from Anglo and in 2011, had administrators Baker Tilly Ryan Glennon appointed to the site. The announcement today confirms that the homes will be constructed by …. Lagan Homes, part of the partnership that once owned the site. Of course we have no idea how much was spent on insolvency experts, administrators and various lawyers in the past two years, just to end up with Lagan developing the site.
The NAMA chairman Frank Daly said today
“This is a real statement of intent about our Northern Ireland loan portfolio. We are committed to supporting projects that can deliver a commercial return and I hope that there will be more projects like this in Northern Ireland. We are funding this development because it will deliver quality homes for people looking to live and work in Belfast. It will turn an unused site into a development that will benefit the Agency as well as homebuyers, the city of Belfast and the people who work on building it” [ENDS]
Separately, NAMA said that it was in discussions with a Northern Ireland lender to launch its 80:20 deferred mortgage initiative in the Province. With the Nationwide Building Society showing Northern Ireland’s housing increasing by 4.4% in Q1,2013, top of the UK league table, there mightn’t be great demand for a negative equity mortgage product at this point, but it’s all good PR. At this stage, all NAMA is saying is that the homes at Millmount might be offered with mortgages under this scheme.
NAMA Wine Lake 
Here’s DUP leader Peter Robinson and the boss of Lagan homes at Millmount in 2009.
http://www.belfasttelegraph.co.uk/news/local-national/180-million-housing-development-for-belfast-hills-28498233.html
NAMA would be better channelling money into numerous smaller developments within Greater Belfast and beyond with various developers rather than spanking £9M on placing all their eggs in one basket for a number of years.
This area of East Belfast has a good level of construction under way for similar sized homes which is meeting the needs of the area. One close by (actually, adjacent) development is selling up to 20 units a year so there is a limit as to how many can actually be sold and completed – its supply/demand.
You could have 20 schemes of 10-20 units being built and sold within say 2 years across Greater Belfast meeting the needs/demand across various housing sectors and locations assisting lots of smaller builders/developers. Instead once again you are shoring up one of NI’s largest who is simply working through a damage limitation exercise as opposed to the commonly seen ‘lights out’ situation for most others.
This is simply political backscratching for he who shouts loud enough.
PS. I can just picture the street scapes of identical brown and orange brick house types with no creative flare, a lack of internal storage, hideous concrete tiled roofs, shadow box fences and no garage. I feel ill already… Go on, excite me LAGAMA!
What you suggest is sensible and as you’ll know builders who have their own money to spend are buying infill sites in Belfast for small schemes or even one-offs. The problem is that Nama doesn’t have many of these on their books but instead has a ton of 100+ unit behmoths, a lot of which aren’t in greater Belfast.
I agree with the large schemes JP, whilst many of these may have worked in 2005-2007 anywhere, alas now provide the incorrect house types and sizes to meet demand in the current marketplace. Many approvals should now be shredded unfortunately if they haven’t already lapsed.
100+ schemes outside of Greater Belfast… Hmm, unfortunately these are just not going to happen in our lifetime.
NAMA have (along with many non-NAMA banks) got scores of smaller sites which could easily be utilised but in my opinion it is easier to deal with one large scheme from a ‘monitoring, financing, political, logistical and planning point of view’ than have to manage multiple small sensible schemes.
Don’t get me wrong I am pleased to see progress and money being channelled into NI related residential development. Hopefully there will be more and not only looking after the big guns.
Ulster and Northern are coming down with small sites.