Tuesday 21 October 2014

The expanding footprint of the State's bad bank

Published 09/11/2012 | 05:00

AS retailers gear up for the busy Christmas season, more of them than ever are trading out of State-owned properties.

That is true of hoteliers, publicans and householders.

The National Asset Management Agency's (NAMA) vast property empire shows it is now a central player in almost all aspects of the economy. It also shows the challenges faced by the bad bank in attempting to secure a return for hard-pressed Irish taxpayers on its acquired loans.

Figures provided by the toxic loans agency show that it holds €2.9bn in distressed retail property, with €1.5bn-worth located in Dublin alone.

An extraordinary 117 hotels and 14,000 apartments and houses are under its control here.

Its portfolio spans the world, with residential units, hotels, shops, land and offices stretching from the US to Spain, Portugal, Belgium and the UK -- all valued at a massive €32.4bn.

Since it was established in 2009, NAMA has morphed from being simply a hoarder of distressed assets into a major property management company -- the largest in the country.

Expanding

Its remit seems to be ever-expanding. It has even moved into the realm of providing social housing from its vast catalogue of homes in a bid to help address the shortage.

Indeed, the organisation has set up a subsidiary company to help fast-track the provision of social housing units.

It has identified 3,800 properties suitable for social housing, with 2,000 assessed by approved housing bodies. Some 1,200 have been confirmed for use.

Housing Minister Jan O'Sullivan has said the establishment of the new company -- The National Asset Residential Property Services -- will result in more than 2,000 homes being made available for social housing by the end of next year.

Data from the organisation's latest annual statement shows that, as expected, more than half of the property securing NAMA loans is located in Ireland, with 61pc in Dublin.

Property located in the state's two biggest cities -- Dublin and Cork -- was valued at nearly €11bn and €2bn respectively.

This week, in a note posted to the Irish Stock Exchange, the bad bank revealed that it had €17m written off the total amount it had to pay to the banks for taking on the loans.

Some of the later loans were acquired by the agency in bulk with due diligence completed after the loans had transferred over.

In essence, it means that the State now pays €17m less for the loans than first thought. The latest figure stands at about €26.9bn, down from €27.8bn in May 2011.

Irish Independent

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