Business Irish

Saturday 24 February 2018

NAMA action is welcomed

NAMA's strategy of opting for a high portion of investment and British property loans should be a welcome move for taxpayers, according to property consultant Peter Waller of DTZ Sherry FitzGerald.

"Such properties are likely to be better performing than Irish development land and so will not have fallen in value as much," he explained.

A higher-than-expected €3.2bn, or 38pc, of the loans are backed by British property and a further €5.5bn are investment properties. Consequently the level of the discount on loans in this first tranche is not as severe as it might otherwise be.

"NAMA is valuing loans in this first tranche of transfers at around 47pc, but Irish commercial property values have fallen by about 60pc and land values by even more. However, future loans transfers are likely to see more severe discounts," he added.

He and a number of other property experts expressed the hope that this would help make credit available for business.

Vice-chairman of the Society of Chartered Surveyors, Peter Stapleton, agreed but said it would be some time before funds would flow.

On the other hand, Philip Farrell, of Brophy Farrell Real Estate Alliance, said that many prospective property buyers have funds on deposit with the banks and a number of them are willing to buy at discounts of 10-20pc below the values in the NAMA discounts.

A spokesman for the Irish Auctioneers and Valuers Institute, Roland O'Connell, said that the NAMA move was a welcome further step to helping the market return to normal.

"We are still a few more months away from beginning to see the consequences for the property market. We have to wait and see how the property owners, whose loans are being transferred to NAMA, respond as they will have to submit business plans to NAMA on how they plan to manage their properties."

Irish Independent

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