Sunday 17 December 2017

New Nama sell off may spark home construction

NAMA's headquarters in Dublin city centre
NAMA's headquarters in Dublin city centre
Peter Flanagan

Peter Flanagan

Nama is to sell off loans tied to three developers, in a move which could pave the way for a slew of housebuilding around the city.

The agency has re-launched the Project Tolka portfolio of loans, which have a par value of around €1.5bn.

The loans are tied to the developers John Flynn, Paddy Kelly and the McCormack family, which controls the property firm Alanis.

Nama has hired US property broker Eastdil Secured to manage the sale.

Under the deal being hashed out between the developers and Nama, the state bad bank would sell off the loans tied to the developers, but retain development land which had formed part of their portfolio.

Nama will then hire Mr Flynn, Mr Kelly and the McCormacks to build homes on the sites in Carrickmines and Sandyford in Dublin, and Bray in Co Wicklow. Industry sources believe the sites could potentially hold up to 5,000 homes, but other property experts believe that figure would be overblown.

Any new home development in the Dublin area will be welcomed, given the shortage of housing around the capital.

By most estimates, Dublin needs about 25,000 homes per year in order to meet demand. However barely half that figure is being delivered at present. The shortage is so acute that the average cost of renting has now surpassed €1,000 per month.

Construction has even slowed in recent months, with developers blaming the high cost of construction and the uncertainty created by the Central Bank rules which restrict mortgage levels. This is the second time that Nama has been prepared to sell the portfolio tied to the three developers.

Last year Nama pulled the loan sale as Mr Flynn was in talks to refinance some of his debts.

Nama prepared the Project Tolka portfolio for sale last year after an approach by US private equity firm LoneStar, which has spent millions on property here since the crash.

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