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O’Flynn: ‘Ireland has no market’

THERE is no market for property in Ireland at present because of uncertainties related to the implementation of the National Asset Management Agency (NAMA) legislation, according to one of the country’s biggest developers.

Michael O’Flynn, who developed the massive Elysian complex in Cork city centre, also said developers are unable to pursue new business opportunities because they are now in "a pre-NAMA stage".

"At the moment we don’t have a market. There is no market. Trying to value at market value is a bit of a nonsense when you have no market.

"You need three situations for market value. You need an arms length transaction, a willing buyer and a willing seller. I don’t think we have any three of those but we are where we are," he told the Marian Finucane Show on RTÉ Radio 1. Mr O’Flynn said there is a is a serious situation facing his industry. "The cost of construction of a property is above the value of the property," he said.

Mr O’Flynn, who is part of Construction Industry Federation (CIF) subcommittee group endeavouring to interact with the Government on the legislation setting up NAMA, admitted to being frustrated at being unable to lobby Government directly on the issues that matter to them.

"The lack of interaction with the Government is giving us a lot of cause for concern. The CIF as an industry have not had any consultation other than with the people who are going to implement it, not with the policy makers," he complained.

Mr O’Flynn said the CIF has had no real opportunity to ensure that the proposed legislation, when it comes through, will work, but conceded that "nobody would want the Government to sit down with us". He also said that there is no doubt public sentiment is completely against developers and bankers.

Mr O’Flynn also confirmed to Ms Finucane that he has made financial contributions to a number of political parties in the past.

"I have contributed to all political parties that operate in this country, to all or next to all. It is not a crime to support the political system," he said.

However, Mr O’Flynn said that he never received an invitation to Fianna Fáil’s highly controversial "Galway tent" during race week in the city. He said the current climate is hampering progress in the sector.

"A lot of people would have good business opportunities to explore but they are unable to do so because we are in this pre-NAMA stage," he said.

"The reality of it, is that it is [NAMA] taking all loans, every borrower above€5 million in this country that has a connected exposure to land is going to be in this new bank. If you tell me that it’s meant to be a bad bank, well that’s telling me that’s the end of our industry," he said.

Mr O’Flynn said that he is happy to confirm he will be in NAMA and said all other developers of any scale will also be in NAMA.

Mr O’Flynn has questions about the future of NAMA and its ability to operate as a bank. "Will it operate for the industry, because whatever about the valuations and the transfers, if it does not work for the industry, if you don’t have a returning functioning market it will cost the taxpayer an awful lot more than it costs him today," he predicted. Mr O’Flynn said that at peak he had close to 1,000 staff, but now as a group it employs "probably less than 400".