NAMA's three-step plan to make money from houses
Published 28/05/2011 | 05:00
NAMA is believed to own about 20,000 houses and apartments, either directly or indirectly through borrowers.
At the moment it has to manage these properties directly or through the local banks, for which it must pay a fee.
One option to get these houses and apartments off its books is to sell the assets in one big bundle, known as a Real Estate Investment Trust (REIT), which would be listed on the stock market.
When NAMA sets up this trust it would effectively be selling off the houses and apartments to a group of investors/shareholders.
They would be invited to buy shares (or units) in the Real Estate Investment Trust and once they make this payment they would become the owners of the apartments and houses, albeit at arm's length.
Essentially they would own the properties, but without owning them directly like a traditional landlord.
These investors, many of them from the general public, would then be entitled to any benefit that flows from owning these properties, including rental income and gains made when individual apartments or houses are sold off.
They would also get generous tax breaks which are granted to REITs.