Monday 26 September 2016

Buyers should get a return on Nama deals, says Daly

Paul O'Donoghue

Published 12/10/2015 | 02:30

Nama chairman Frank Daly: 'There is almost a view that nobody should ever make a profit from something they buy from Nama [but] that's what the market is'
Nama chairman Frank Daly: 'There is almost a view that nobody should ever make a profit from something they buy from Nama [but] that's what the market is'

Nama chairman Frank Daly has said that he "does not understand the view" that those to whom Nama sells properties should not make a profit on future sales.

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Speaking at the International Corporate Restructuring Summit in Dublin last week, Mr Daly said that it is the view "of a small [number] of people" that Nama should "hold onto everything forever because you can never be sure that you will never get the actual maximum value [of the property]".

Some commentators have suggested that the 'bad bank' is selling its assets too cheaply, due to eagerness from officials that the organisation be wound up as soon as possible.

One such building is One Warrington Place, a six-storey office building that houses Bord Gais's headquarters, which was first sold by Nama to the US fund Northwood Investors in 2012 for €27m, who then sold on the property again for €42m last year.

More recently, it has been reported that Cerberus, the US firm that bought Nama's Northern Ireland loans portfolio, could make a profit of several hundred million euros on the transaction. It is estimated that the portfolio, which was sold for €1.6bn, had a face value of €5.6bn. However, Mr Daly said that buyers would expect a return on their investments when acquiring Nama properties.

He said: "You'll get a lot of this comment about Nama selling this property in 2010, 2011, etc, and now someone is turning a profit on it, but if you look behind it they are referring to about five or six individual properties, they forget about the rest of the 40,000 assets that were sold."

He added: "There is almost a view that nobody should ever make a profit from something they buy from Nama [but] that's what the market is, that's what happens and I don't understand this view that is put about by a small [number] of people that really Nama should hold onto everything for ever, because you can never be sure that you will get the actual maximum value. It's not the way the market works."

Nama has overseen 9,765 individual transactions involving over 40,000 property units since its inception in 2009. Nama paid €32bn to acquire €74bn in face value loans from the country's banks after the financial crash. It made a profit of €458m in 2014 and is on course to double that by the end of the year.

Irish Independent

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