NAMA features in latest Euromoney Research Guide

It’s Sunday evening, and you’ll enjoy this.

On Friday last, NAMA proudly published on its website the latest Euromoney guide to Ireland in 2013 where the Department of Finance, the NTMA, NAMA and the IDA each hold forth on how good things are in Ireland and how the recovery is well under way. No mention of the R-word at all, despite the country slipping back into recession according to the most recent GDP figures.

NAMA gets a page all to itself, and it really is a load of twaddle.

The regular audience on here will love the little box on the NAMA page which sets out how NAMA thinks it interacts with parties interested in buying its property and loans, and this is reproduced fully here

“NAMA will always engage with parties who have an interest in purchasing either a property that secures a NAMA loan or loans themselves and will actively facilitate engagement with its debtors/receivers. Individuals interested in buying a property that secures a NAMA loan are encouraged first to contact the owner or, in the case of a property subject to enforcement, the appointed receiver or administrator (a full listing of properties subject to enforcement is available under ‘Properties Enforced’ on NAMA’s website, http://www.nama.ie). Interested parties can also contact NAMA directly atinfo@nama.ie. In the case of both asset and loan sales, NAMA maintains a register of interested parties. When appropriate disposals arise, these parties are contacted by the relevant agents and given an opportunity to bid.”

For those of you who have contacted NAMA with multi million euro offers for loans or for property where there has been no response from the receiver/estate agent, the above may crack you up.

It is said that NAMA’s cash inflow to date of €11bn comprises asset sales of €7bn and “effective management of its assets” generating €4bn.

It is said that loan portfolio sales of €1.1bn are currently underway. Now, we know that NAMA has agreed the sale of Project Aspen which had a nominal value of €810m and sold for €195m, but the future of the €300m nominal value Project Club sale appears to be in some doubt.

For the first time, it is stated that NAMA intends spending €3bn on its portfolio, comprising the €2bn announced last May 2012 and a further €1bn which preceded that announcement. NAMA is to lend “at least” €2bn for vendor financing its asset sales.

NAMA refers to “recovery in Ireland’s commercial property market is already being supported by a substantial increase in investment by overseas funds attracted by the good yields available”. There may well be a recovery in transactions, but commercial property prices continue to decline with Q1,2013 down between 0.6-1% on the previous quarter, and rents down a stonking 3% in those same three months.

With respect to the IBRC assets which NAMA is to take over when the Special Liquidator sells as much as they can at prices in excess of an independent valuation, NAMA says that “depending on the volume of loans sold by the special liquidators to third parties, this could increase NAMA’s balance sheet by 50%” At the end of 2012, NAMA had balance sheet assets of €27.3bn, liabilities of €26.9bn and equity of €0.4bn. At June 2012, the latest date for which we have accounts for IBRC, the loan assets were booked at €16bn after provisions.

The report concludes “Brighter prospects for the property sector, twinned with NAMA’s successful track record since 2009, leave NAMA chief executive Brendan McDonagh confident about the agency’s prospects” What is omitted is the fact that both residential and commercial property are down 27-32% since November 2009, NAMA’s valuation date, and that according to the latest indices for both, prices are still declining. NAMA racked up a loss of €1.1bn in 2010, its first year of operation and is still nursing a €0.7bn cumulative loss. As Brendan told his Spanish audience last week, “the Irish market is very difficult, the economy is taking longer to recover than anybody expected and the financial institutions not in Nama are deleveraging as well. It’s a very competitive marketplace”

Euromoney Research Guides are published by an independent company, but this one is “published in conjunction” with the Department of Finance, the NTMA, NAMA and the IDA.

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Allsop Space mega property auction on Wednesday – preview

Where: Shelbourne Hotel, St Stephen’s Green, details here
When: Wednesday, 15th May, 2013 starting 10.00am (auctioneer announcements from 9.45am)
What: 125 Lots of residential, commercial and development property. The online catalogue is here. 38 commercial and investment Lots (with €10m max reserves) and 87 residential and land Lots – 55 houses, 21 apartments (Note as of this morning, four Lots have been withdrawn).
How much: Maximum reserves of €16.3m. Maximum reserves are an Allsop Space innovation and mean a price on a Lot which if met or exceeded at the auction, then the winning bidder is guaranteed to get the property. The actual reserve might be lower than the maximum reserve. It’s not that complicated! However for this auction on Wednesday, Allsop Space have introduced a  new concept for some of the Lots, a “reserve range” about which Allsop Space says the “reserve is guaranteed to be set within the two figures, giving the buyer a better indication of where the seller’s bottom line will be”

Estate agents are generally reporting that the residential market has been quiet since the start of 2013, but that there is strong interest in commercial and development property which is being converted into actual sales. Note this is an assessment on activity, price changes depend on property type and location, and reporting is mixed on that front – prime commercial property with new tenancy leases seem to be increasing in value, Dublin houses appear to be stable, most commercial property is still declining, and prices nationally including houses in some parts of Dublin are still declining though at a slower rate than previously – that’s all based on anecdote, the latest residential indices from the CSO are here, the latest commercial indices are here, Ireland doesn’t have development property indices but anecdote indicates there have been declines of 90%-plus from peak.

This coming Wednesday, we’ll see the 11th Allsop Space mega auction, a series of auctions which have transformed the business in Ireland and against which no Irish operation has so far held a candle – BTW has being doing a decent job on a smaller scale on the other side of the Border. The Allsop Space auctions have the highest standards of transparency with online webcasting and live online prices, and the venue again is the Shelbourne Hotel which at the opening at 9.45am on Wednesday is again expected to be packed with standing room only.

The Lots are again a mix of residential, commercial and development and as in previous auctions are scattered across the country with just 33% in Dublin. Just over half of the property is income-producing. There is an increasing emphasis on commercial property and in this auction, Allsop Space have modified their reserves for some commercial property, it says to give a better guide price.

Highlights includes

(1) McDaniels pub complex in Brittas Bay, Dublin. The 9,000sqft pub, restaurant and 10 bedroom accommodation comes complete with a holiday village of 16 chalets and 18.75 acres with sweeping views over the Irish Sea.  The Reserve Range is €625,000- €675,000.

(2) Farnham Court, Farnham Road, Cavan Town (pictured above).An entire development of 60 apartments located opposite Cavan General Hospital; 2 x freehold blocks of apartments, comprising 30 apartments each.  25 are currently let producing €127,000 per annum.  Reserve Range: €1.5 million – €1.7 million.

(3) Shopping Centre, Cardiff Bridge Road, Finglas, Dublin 11.10 tenanted retail units, all fully let with a rental income of €251,993 p.a. Some tenants dating back to the 1970s and 1980s.ReserveRange: €1.2 million – €1.3 million.

You can follow entertaining and informative commentary on the auction from Carol Tallon of Buyers Broker who will be tweeting here.

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