THE man who will be responsible for deciding how much NAMA will pay banks for their toxic development loans was introduced by Minister Brian Lenihan yesterday.
And straight away John Mulcahy defended his methods and his ability to assess the market.
He explained he was a chartered surveyor for almost four decades and chairman of Jones Lang Lasalle estate agents which specialised in commercial and business property.
Mr Mulcahy told the Oireachtas Committee he saw the crash coming four years ago and ensured the agency’s pension funds cashed out of its property assets when it was unpopular to do so.
“When yields on Grafton Street get to 3% there was only one way the market is going to go,” he said.
Mr Mulcahy said NAMA’s valuation will chart trends going back to 1971 to arrive at what each site is worth.
On the basis of his analysis every global property crash has led to recovery and he expects sites to return to 88% of their peak price in seven years.
The exception to his model was Japan because it chose not deal with stressed assets.
Mr Mulcahy also outlined strict guidelines he is drawing up for the independent valuers contracted to suggest the price NAMA should pay for each loan.
This will begin with an analysis of historical trends since 1971, a real assessment of the market price at the trough and projected growth prospects.
NAMA’s own valuation panel will be the arbitrators of this judgement before any deal is done.
“We want to see exactly how [the valuer] has arrived at that figure when we review it,” he said.
He said properties in areas which were overzoned and where houses were over supplied will only be priced at agricultural values.
Senator Shane Ross said Mr Mulcahy’s philosophy did not inspire confidence.
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