NAMA should be wary of asset values abroad

THE European Central Bank rightly urges careful consideration by NAMA when valuing developers’ assets. However there is one area where particular care needs to be taken and where the valuation expertise of the estate agency sector may not be appropriate.

There is anecdotal evidence that many Irish developers hold substantial assets in overseas markets like Bulgaria and Dubai. In the case of Bulgaria in particular, these assets may appear to be performing well and producing rental returns.

The reality however is that in many cases these “rents” have been achieved by increasing the purchase price, so that investors are simply getting back their own money for the duration of the guaranteed rental period.