Labour: NAMA will pay billions above value
The failure to introduce the new law will mean NAMA will pay over the top for properties, said Labour’s local government spokesman Ciarán Lynch.
“Existing operating developments are to be taken into account as an asset which can be drawn into NAMA as well as undeveloped properties. Valuations will at least partly be worked out by their supposed rental value. Many upward only leases were agreed during the height of the property bubble resulting in properties values being overinflated, the government seems intent to have NAMA paying these overinflated prices.”
An amendment to the Land and Conveyancing Law Reform Bill, signed into law last month, outlaws upward only leases but yesterday a Department of Justice spokeswoman said there was no plan to enact the legislation regarding upward leases “at this time”. The rest of the bill is being enacted immediately.
Mr Lynch said: “In the absence of this bill being commenced it is impossible to have a clear reading of what the value of these properties actually are. It is critical that the whole of this bill is commenced immediately.”
CEO of Retail Excellence Ireland David Fitzsimons said land valuation is totally up in the air with leases not reflecting the real market conditions.
An added difficulty in the valuation of properties is that many leaseholders have been secretly renegotiating rents with businesses. These new leases are subject to confidentiality agreements with the higher leases nominally still left in place.
Groups representing property valuers and pension funds oppose the ending of upward only rental agreements.
Irish Auctioneers and Valuers Institute Roland O’Connell said: “The outright banning of upward-only rent reviews will significantly further reduce the value of development land and vacant buildings, impacting on banks and pension fund balance sheets.”
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