Business Irish

Thursday 21 June 2018

Nama has the capacity to fund the delivery of 20,000 residential units by end-2020

Nama publishes 2017 year-end review

Nama CEO Brendan McDonagh
Nama CEO Brendan McDonagh
Ellie Donnelly

Ellie Donnelly

Nama has the capacity to fund the delivery of 20,000 residential units by end-2020, if commercially viable, according to its 2017 year-end review.

It is estimated that 7,200 residential units have been delivered between 2014 and 2017 through NAMA funding.

Meanwhile construction has begun on sites that will deliver a further 2,500 units financed by the State’s bad bank.

A further 7,000 units have received planning permission but are not yet under construction, while planning applications have been lodged, or will be submitted during 2018, for another 8,500 units.

Since the start of 2012, NAMA has delivered 2,456 houses and apartments for social housing, excluding houses provided under Part V arrangements, according to its 2017 review.

One hundred percent of government-guaranteed Nama senior bonds have now been redeemed – the final €2.6bnn of the original €30bn senior debt issued was redeemed by October last year.

This means that Nama’s primary objective has been achieved with the elimination of a €30.2 billion (at its peak) contingent liability of the Irish State.

In addition Nama has generated over €40.5bn in cash, primarily from asset and loan sales as well as rental receipts from properties controlled by debtors and receivers.

Subject to favourable market conditions, it expects to return a surplus of €3bn to the Exchequer by the time it completes its work in 2020.

In his October 2017 budget speech, the Minister for Finance announced that the Government had decided to establish a new vehicle, Home Building Finance Ireland (HBFI), to increase the availability of debt funding to commercially viable residential development projects.

While HBFI will draw on the expertise and skill in residential development funding that resides in Nama, it will be a legally independent entity.

The €750m initial funding for HBFI will come from Ireland Strategic Investment Fund (ISIF).

According to a statement from Nama, HBFI funding has potential to fund the construction of 6,000 units in the coming years. This will be additional to the output from NAMA’s residential delivery programme.

It is expected that HBFI will commence operations in mid-2018.

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