NAMA warns of pain ahead for developers in the North

THE National Asset Management Agency has warned of financial pain for developers in Northern Ireland whose development land will have to sold off as basic farm land in the years ahead.

NAMA expects that the nominal value of loans it will acquire against Northern Ireland assets will amount to €4 billion.

Peter Stewart, a NAMA director, speaking in Belfast yesterday, said that the bank will have to stick to its 10-year time-scale to achieve its stated aims.

Under the changed circumstances across the entire island it is likely we will see what was previously viewed as potential development land “reverting back for farming use,” he said.

“For those builders, developers and also land traders and speculators who got caught up in the frenzy, unfortunately there is going to be financial pain,” he said.

Mr Stewart said there was not a huge supply overhang of residential properties in Northern Ireland, unlike in the Republic.

NAMA was set up to rid banks based in the Republic of Ireland of shaky development loans nominally worth €81bn and it expects to buy loans worth €4bn secured on assets in Northern Ireland.

Those assets will be made up of €2.4bn worth of undeveloped land, €1.2bn of investments and €400 million of property and land in course of development.

NAMA was designed to crystallise the Irish banks’ loan losses upfront and to hold onto underlying assets as long as it took for the market to recover.

It would have to make a move, however, sometime within its expected life-span of 10 years to return much of the acquired land back to farm use.

“Even over such a period of time it is likely that we will see what was previously viewed as potential development land being sold to go back to farm land,” Mr Stewart said.