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Dublin: 12 °C Sunday 26 October, 2014

Pathway to ‘Dublin’s Canary Wharf’: Nama’s €3 billion property play

Developers who had lands transferred to the State’s bad bank could end up developing sites in the Docklands.

Financial services jobs on the rise

London's Canary Wharf

Source: PA Wire/Press Association Images

NAMA WILL BECOME a major force in the construction sector over the next six years, with plans to pump up to €3 billion into building in the capital before it winds up in 2020.

The Minister for Finance Michael Noonan today said that the agency will pivot away from its original role, which was to dispose of toxic property loans issued during the construction boom.

The centrepiece of the new strategy is a €1.5 billion plan to transform Dublin’s south docklands into ‘Ireland’s Canary Wharf’, with a split between grade A office space, retail units, and some residential buildings.

In addition to the docklands plan, a further €1.5 billion will be made available for construction of homes in the capital.

Minister Noonan said that the agency can fund “up to half of Dublin’s new housing requirement over the next five years”, in addition to development in neighbouring counties and other urban centres.

NAMA Briefing Department of Finance. Min

Noonan and Nama chairman Frank Daly today

Source: Mark Stedman/Photocall Ireland

The agency will continue to operate in its new roles to the intended wind-down date of 2020, putting pay to speculation that it could be wound up several years earlier due to an accelerated sales process of its loan book.

Loan book disposal

That loan book will now be primarily disposed of by the end of 2016, with a new target of 80% of loans to be sold by that stage.

All the loans will be disposed by 2018 under the new plan, leaving open the prospect of Nama having a two year run as a pure property development agency.

Noonan said that he had considered an earlier wind-up of the agency by 2018, but felt that it would be better positioned to use its expertise to potentially contribute to “the economic life of Dublin and the economic life of the country”.

Docklands plan

Of the Docklands, the Minister said that the agency “has as opportunity to bring this area to life”.

He said that a redeveloped docklands would form “a powerful eastern flank to Dublin’s inner city”.

Dublin Docklands Maritime Festival

Source: Laura Hutton/Photocall Ireland

The blueprint for the docklands redevelopment is an area similar to waterside business centres in Singapore and Boston.

No other European city has a piece of land like this

Speaking on RTE’s News at One, chairman Frank Daly admitted that developers who had loans transferred to Nama could end up developing in the docklands. He said that the bad bank had been investing with debtors throughout its existence.

“If they are prepared to work with  us, we are prepared to work with them. Could that happen down in the Docklands? Yes, it could.”

Housing

Nama’s land bank, which includes vast areas in the South and West of Dublin city, can accommodate up to 22,000 new houses, the Minister said. Around 3,000 units are ‘shovel-ready’, meaning they can move into construction immidiately.

Another 19,000 are at the pre-planning or design stage.

The agency also controls loans linked to 2,600 hectares of residentially zoned development land in counties Wicklow, Kildare, Meath and Louth, all key commuter centres for the capital.

Nama chairman Frank Daly said that he considers the new objectives a “major priority”.

Joint ventures

The bad bank has already sought expressions of interest from potential partners in joint ventures, with over 200 companies now registered as potential co-developers. A register of these developers will not be published.

Many of the interested parties hail from the US, UK or other non-domestic markets.

Rate of return

The agency was strongly criticised in a report earlier this year by the Comptroller and Auditor General for not setting a ‘rate of return’, or financial performance target.

At a briefing today, Nama chairman Frank Daly said that the focus remains on repaying the debt rather than setting new financial targets. He said that the agency will respond to the C&AG’s concerns in due course.

The Minister said today that he hopes the State’s bad bank will be able to pay back most of its debt to the state on disposal of 80% of its portfolio, raising the possibility that the proceeds of the remaining sales may actually constitute a profit for the Government.

Read: Nama sold 26 properties with ‘no evidence of open marketing’>

Read: Here’s the most complete breakdown of Nama loans you’ll see today>

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