Friday 21 July 2017

Nama increases value of its assets as market improves

The Treasury Building on Dublin’s Grand Canal Street which houses Nama
The Treasury Building on Dublin’s Grand Canal Street which houses Nama
Peter Flanagan

Peter Flanagan

NAMA has written up the value of its assets for the first time since it was set up, as the agency prepares to wade deeper into house building.

In its half-year report, the state bad bank said it increased the value it has placed on its property and loans that it holds on its books.

Nama said it took an 'impairment credit' of €25m during the first six months of this year. That compares to a writedown of €137m during all of 2014.

The agency analyses the value of its assets every six months. In general, if Nama believes the property or loan will generate more cash than had been expected previously it will write "up" its value.

If it believes the asset will generate less cash than had been previously expected, it will write down its value.

The move is significant as it signals that Nama is confident that the value of the assets it still has will not fall further.

Overall, the results show Nama made a profit €473m. That is more than the €458m it earned last year.

The agency sold assets worth about €3.4bn between January and June 2015.

By the end of June, Nama had 286 staff on its books. While that is below its target of 290 this year, the agency is expected to ramp up recruitment as part of its move into financing 20,000 new homes.

That move was announced in last week's Budget.

In its annual statement for the year ahead, Nama chief executive Brendan McDonagh said it now planned to have paid off all of its "Nama bonds" by the end of2018 and the remaining debt by 2020.

The agency is involved in three quarters of the 20 development blocks in the Dublin docklands - an area now listed as a strategic development zone, which allows for accelerated planning permission.

It estimates those blocks can supply 3.8 million sq ft of office space and 2,000 apartments if those projects are all completed.

When it comes to house building, Mr McDonagh said the agency was now set to be responsible for as many as 41,000 of the new homes being built in the Greater Dublin area in the years ahead.

It had built or completed 1,841 residential units by August and has planning permission for another 6,350. Some 1,600 of those are already under construction.

Mr McDonagh added that Nama would seek planning permission for around 7,200 other houses by the middle of 2016.

It is also assessing sites that could hold as many as 12,600 other homes. Not all of those may be commercially viable, however.

Mr McDonagh added that Nama is "currently engaging with debtors, receivers, local authorities and other agencies with the aim of removing impediments to the development of a number of large residential sites which have the capacity to deliver an estimated 13,200 units". Those are long term projects, however.

The firm added that it has also sold enough land to hold about 11,100 units around Dublin.

The agency has previously claimed that fewer than 1,000 homes have been built on that land.

Irish Independent

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