NAMA refuses to fire-sale its properties

NAMA has said it will not be lured into giving away its properties at fire-sale prices after it confirmed it has off-loaded €6.2 billion worth of assets since March 2010.

Chief executive Brendan McDonagh told investors in London that €4.3bn worth of assets had been sold in 2011.

This has left it on course to make an operating profit of €600 million this year.

The income was largely being spent paying off NAMA’s loans and helping it to reach its target of repaying a quarter of its debt by 2013.

The sold assets were by and large linked to its overseas portfolio after the better-than-expected property market around London propped up the value of some key sites.

Eight out of 10 sales related to sites outside Ireland.

However, Mr McDonagh warned investors it would prefer to lend money to see sites developed rather than release them for a poor return.

“NAMA will not hoard assets in the hope of generating speculative gains, nor will it engage in so-called fire sales,” he said.

“We will seek to identify opportunities to make capital investment combined with effective asset management with the objective of generating continuing cashflow while ensuring we get the best price we can from each and every sale,” Mr McDonagh said.

The most successful sales have seen NAMA generate better-than-expected returns but it has still to extricate itself from numerous high-profile projects which may yet see it lose money.

Mr McDonagh’s comments come on the eve of what could be one of the most public tests of NAMA’s resolve in negotiating prices for distressed assets.

This case, due before the courts in England on Monday, has seen NAMA and fellow creditors poised to push the developers of the Battersea power station, Real Estate Opportunities, into administration.

This has been in a bid to shore up the €100m the agency is owed.

REO has signalled it will not be able to meet its creditors’ demands and the lenders have looked to bring in administrators, who would be tasked to find a break-even buyer for the iconic complex.

Mr McDonagh told the London conference NAMA had already loaned out €950m to ensure projects were developed to increase their value to the agency.