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NAMA is 'on track' to repay €7.5bn worth of bond debt

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Brendan McDonagh, chief executive of NAMA. Photo: Frank McGrath

Brendan McDonagh, chief executive of NAMA. Photo: Frank McGrath

Brendan McDonagh, chief executive of NAMA. Photo: Frank McGrath

THE National Asset Management Agency (Nama) is on track to repay €7.5bn of bond debt by the end of next year.

Nama boss Brendan McDonagh said the agency was in a strong cash position and that additional debt repayment was likely before the end of 2012.

"This is a commitment under the country's agreement with the troika and is important in terms of investor perceptions of Ireland," Mr McDonagh said.

The head of Ireland's bad bank told the Construction Industry Federation (CIF) national conference that the combined effects of Nama's funding plans, market initiatives and the State's capital investment programme would contribute to restoring construction output to more normal levels.

Value

Ireland's beleaguered construction sector represented just 6pc of the entire value of the economy last year, compared with 23pc during the heady days of the building boom in 2006.

Mr McDonagh said the legacy of the property collapse was that the country was dotted with unfinished housing developments, and that Nama had a role in about 10pc of those.

He said all segments of the property market continued to be affected to varying degrees by oversupply in certain areas despite five years of construction decline.

And he warned some of that oversupply would never be occupied.

Mr McDonagh pointed out that some developments may be demolished on safety grounds.

In the last two years, he said, the agency had secured tenants for 4,000 previously unoccupied apartments and the annual rent roll across its residential portfolio was about €100m.

He said it was investing to complete apartment blocks in areas of Dublin such as Sandyford in response to strong rental demand, and that overseas investors had expressed interest in buying large blocks of apartments.

The Nama chief said the agency expected home prices to fluctuate within "a fairly narrow corridor" over the next year and that it was unlikely there would be any dramatic recovery in prices in the immediate future.

But he struck an upbeat tone by saying the sector was on its way to recovery.

"The readjustment that this has necessitated in the sector is now well under way and the medium and longer-term prospects for the property markets and for the construction industry in Ireland are positive."

Meanwhile, with Spanish government preparing its own version of Nama, Mr McDonagh advised authorities in the Mediterranean state to identify losses quickly.

Irish Independent