Thursday 27 October 2016

Nama boss predicting surplus to hit €2bn

Paul O'Donoghue

Published 04/12/2015 | 02:30

Nama's chief executive Brendan McDonagh
Nama's chief executive Brendan McDonagh

Nama chief executive Brendan McDonagh expects that the agency will achieve a surplus of €2bn by the time it winds up, up from a profit of €1.75bn signalled earlier this year.

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He also confirmed two loan portfolios with a par value of €3bn each will go up for sale in 2016.

He made the comments after the National Asset Management Agency yesterday announced plans for a €7.5bn development programme for 20,000 new homes and almost 4m sq feet of new commercial space in Dublin. The agency said it would dedicate up to €5.6bn in total funding to the residential programme, with peak funding expected to be €1.8bn.

Around 2,300 residential units have already been constructed under the programme, while almost 3,000 are under construction. The rest of the residential unit sites either have planning permission or are expected to be awarded permission within 12 months.

The proceeds from the sale of completed projects will be recycled to fund new projects that are deemed to be commercially viable.

Nama will seek joint venture partners for the project, although chairman Frank Daly said it has the capital to fund the project itself if needed.

"We can fund it all if necessary but we would like others to come with us on this journey, there is a capacity to attract some serious external heavyweight investors [and] local builders and developers," he said. The agency also announced a major docklands office development that will include 3.8m square feet of commercial space and 2,000 apartments. It will require total funding of €1.9bn.

This project has already started, with preparations made for some demolition at Boland's Mills on Dublin's Pearse Street. Around €170m of the funding has been put in pace for this project, which will include apartments, offices and a shop complex for Boland's Quay.

These developments are expected to generate up to 30,000 jobs at peak construction.

Nama said the programmes were likely to increase its projected profit. "Other than saying that you could speculate it [Nama's surplus] could be over €2bn, we're not going to be any more precise," Mr Daly said.

The agency said in October it expected to make a profit of €1.75bn by the time it winds down its activities, forecast to be in 2020.

Speaking later, Brendan McDonagh said: "I think we would be confident enough to say the surplus will be over €2bn." He said the agency also expected to bring two major loan portfolios to the market next year, each with a par value of around €3bn.

Mr Daly said most of the work will be completed by Nama's appointed wind-down date of 2020 and that it would look at options to complete any residual activities left at that stage.

Nama said the programme will not affect its plan to repay all of its senior debt by 2018 and its subordinated debt by 2020.

Irish Independent

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