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 firstname.lastname@example.org. 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.