NAMA set to offload €16bn UK portfolio
Agency pressing ahead with plans for investment trust
NAMA IS likely to sell off its entire UK portfolio, nominally €16bn on paper, within a few years, one of its key executives has predicted.
Meanwhile, the agency is pressing ahead with plans to group all its apartments and houses into a new Real Estate Investment Trust (REIT), which could be floated on the stock exchange if the Government gives it the green light.
The agency's head of lending, Graham Emmet, said during a conference in London that NAMA wanted to exit the UK property in the next two to three years as this market was far more "liquid'' than the Irish market.
Most of the UK property belonging to NAMA is in London and the south east and is held by NAMA's top 40 borrowers. According to NAMA's business plan -- dated October 2009 -- it is worth €15.9bn at book value, but in effect is worth a lot less as NAMA has applied a huge discount to the assets.
"There is some really good quality prime investment and development sites in there. The UK is a more liquid real estate market structurally than Ireland at this moment,'' said Mr Emmet. "Thus we plan to try and exit the UK exposures in the next two to three years, through borrower-led asset sales and re-financings,'' he aded.
NAMA pointed out that the remarks were made during a question-and-answer session and it seemed to slightly play down the remarks yesterday.
"NAMA will explore opportunities to dispose of assets in all markets over the coming years and will not restrict its disposals agenda to any one area or country, nor is it committed to exiting any particularly market by a particular time,'' said a spokesman in response to questions.
Mr Emmet said the selling programme of NAMA was being done with far fewer staff than that of other banks.
"When we look at what Lloyds and RBS are doing, and they are of a similar size to us in terms of par loans, we have 150 direct staff based in Dublin and they have 800. We may appear to the outside world to be doing this on a bit of a shoestring, but we are gaining serious traction."
He also hinted that whole businesses, not just assets, could be sold in future. NAMA will provide finance directly to borrowers -- known as staple finance -- to help sales happen.
"In Ireland we are prepared to staple debt to achieve assets sales, and maybe whole business platform sales,'' he said.
A number of advisers have been visiting NAMA over recent months to give presentations on how a REIT would work.
"Nama is working to ensure that the best and most appropriate parts of successful REIT structures implemented elsewhere are highlighted and included, if appropriate, in any future legislation that may be adopted by the Irish Government.
"Nama has not appointed any formal investment bank adviser on this matter."
NAMA executives have been talking about a REIT structure for over two years, but sign-off from the Government is absolutely essential for such an event to happen.