NAMA ‘will not hoard properties’

By Noel Baker

Saturday, January 23, 2010

A SPECIAL adviser to Finance Minister Brian Lenihan told the country’s auctioneers that NAMA will not hoard properties and that the first loans would be transferred to NAMA from the banks next month.

Dr Alan Ahearne told the Irish Auctioneers and Valuers Institute (IAVI) annual conference in Dublin that he had heard fears expressed over the possible hoarding of the properties that will come under NAMA’s remit.

"Will it hoard those properties? The answer to that is ‘no’. Asset management companies need cash from these properties," he said.

Dr Ahearne said NAMA would force the banks to address their most difficult classes of property loans – those linked to property and development, with the banks taking on the losses on those loans now rather than over time.

He said the state was getting many things in return for its investment through the NAMA model, including €1bn from the banks for the state guarantee and 8% on preference shares in AIB and Bank of Ireland.

As for the banks, he said: "We do not want a banking system that drives economic growth... in more normal times we want it to facilitate that growth."

He said by mid-February the first tranche of loans will be transferred from the banks to NAMA, with €20bn going first, and with half the overall bad loans switched by April, while recapitalisation or bigger stakes being taken in the banks also likely, with new legislation to change the regulatory system.

Aidan O’Hogan of Savills estate agents, a former IAVI president, said he found Dr Aherne’s view on the hoarding of NAMA properties "quite surprising", suggesting a time should be picked to move the properties so as to get "maximum value".

Mr O’Hogan told delegates at the conference in Dublin that the apartment market was "grossly over-supplied" and said: "In reality we do not have today the right stock in the right place."

He said there would be a move away from property as an investment and more as a facility, with a requirement for increased leasing flexibility and reduced occupier demand.

This appeared in the printed version of the Irish Examiner Saturday, January 23, 2010