Nama should offer flats to ordinary buyers, argues FF
State agency criticised for cut-price sale of apartments in capital to a major real estate investor, writes Ronald Quinlan
Nama has come under fire for selling 442 Dublin apartments to a major real estate investor, instead of offering them for sale individually to people looking to buy a home.
Fianna Fail finance spokesman Michael McGrath criticised the S tate agency's decision to sell the units at Tallaght Cross West in south Dublin in one lot to the I-RES real estate investment trust (REIT). He said that in the midst of a "chronic housing crisis" ordinary people were being denied the opportunity to secure a home as a result of Nama's disposal strategy.
The €83m sale of Tallaght Cross West, which is expected to be completed in the coming weeks, will see I-RES take ownership of a major mixed-use portfolio consisting of 442 apartments, 180,000 square feet of commercial space and a 1,900sq.ft basement car park.
With real estate sources ascribing an estimated value of €40m to the portfolio's commercial space and car park, based on a price of €200 per square foot, the 442 apartments are effectively being sold for an average of just €100,000 apiece - or some €90,000 less than the modular homes proposed as part of the Government's solution to the housing crisis.
Located next to the Luas stop at the Square shopping centre and immediately adjacent to Tallaght Hospital, the apartment complex consists of 161 one-bedroom, 237 two-bedroom and 44 three-bedroom units in 13 blocks.
Referring to the sale by the Nama-appointed receivers Deloitte, Fianna Fail's Michael McGrath said: "While Nama may well have achieved market value, the proceeds are remarkably low when you break it down to the price per apartment.
"Certainly, it would seem to have been a very good opportunity for Nama to fulfil its social-responsibility mandate and to provide social housing, perhaps through the local authority."
Contacted for comment on the matter, a spokesman for Nama revealed, however, that the agency had offered all the apartments at the Tallaght Cross West complex to the Housing Agency and to Dublin's local authorities before deciding to sell the majority of them.
"Nama has an excellent relationship with the Dublin local authorities and works closely with them on projects such as this.
"On this occasion, before their sale, Nama offered all 500 apartments in this complex to the Housing Agency and the local authorities and when these parties indicated that they wished to proceed with 65 of these units, Nama was happy to facilitate this," the spokesman said.
The 65 apartments delivered for social housing at Tallaght Cross West were acquired through a Nama special-purpose vehicle - National Asset Residential Property Services (NARPS) Ltd - and are now being managed by the approved housing body, Tuath Housing.
The apartments were acquired as part of a 20-year plus lease, with an option for the housing association to buy.
The first tranche of tenants drawn from South Dublin County Council's housing list moved in on June 30 last, with the remainder of the residents moving in one week later.
While Nama stated at the end of last October that it had identified over 6,575 residential properties as being potentially suitable for social housing, demand for just over 2,500 of these units was confirmed by the country's local authorities.
Notwithstanding Nama's efforts to fulfil its obligation to deliver a social dividend, Michael McGrath said the agency should still have offered the Tallaght Cross West apartments for sale individually.
He said: "There are thousands of potential individual buyers who would like to have the opportunity of buying apartments and other residential units that are owned by Nama.
"It is denying people the opportunity to buy their own homes and instead is selling whole blocks of apartments in single transactions to one buyer. While that may be the most convenient strategy for Nama, in a time of such a chronic housing crisis, I believe individual buyers should be given an opportunity to buy homes directly from Nama."
The I-RES REIT's acquisition of the Tallaght Cross West portfolio presents it with a significant opportunity.
Quite apart from the substantial targeted rental income of €6.1m achievable on the development's apartments, the campus is home to an Aldi supermarket, which is producing a rent of €625,480 per annum.
Along with these opportunities for income, the complex also has 16,390sqm of commercial and retail space, with the potential for up to 22 new retail units according to the selling agents, DTZ Sherry FitzGerald.
Listed on the Irish Stock Exchange, I-RES is controlled by Canada's largest residential landlord, CAPREIT.
The Canadian trust owns some 46,617 residential units across Canada and in Dublin.