Nama sticks to Government plan to close its doors by 2020
Nama is sticking to the Government’s plan to have ended most of its operations by 2018, and to shut its doors by 2020.
Chief executive Brendan McDonagh, chairman Frank Daly, and Michael Noonan, the finance minister, said there would be no slowdown in the pace of asset sales, nor any slippage in the schedule by which the agency plans to have paid down all its senior and junior debt over the next five years.
There could be no guarantee that the strong international interest in Irish property sales would last.
Recent hikes in property asset values have raised speculation that Nama would look again at its disposal schedule. Some observers have questioned whether Nama has been too quick to sell off assets.
A handful of deals completed in the last 18 months has put the focus on the rapid gains reaped by the new owners, particularly international hedge funds.
A boom is under way in sales of commercial property in Dublin. Prime office rents in the Dublin 2 and 4 districts have continued to climb, hitting €511 per m sq, according to commercial property adviser CBRE.
It projects that the Dublin property market will remain “hot” though 2016 as international investors continue to chase European property assets as world interest rates remain low. There is evidence that office and retail asset prices are recovering outside Dublin, too.
CSO data published yesterday showed home prices in Dublin soared by over 20% in the year to April, despite the measures taken by the Central Bank to rein in the amount of mortgage credit.
With gains of 11.4%, price rises have also been fairly spectacular outside Dublin. Overall, residential property prices, which at the height of the crisis had plunged by 60%, are now around 38% below their 2007 peak.
Mr McDonagh told reporters that although there had been comments made about the sale of a handful of assets, the agency had delivered on its mandate. It had helped pay down contingency liabilities faced by the State and lowered sovereign interest costs as a result.
“When we look at things in the aggregate, we are very satisfied that we are delivering our mandate,” he said.
Mr Daly said that Nama had since 2010 been involved in 7,500 transactions that involved up to 33,000 individual properties. “We hear all the time about three or four cases where apparently the assets might have been sold at a profit,” he said.
Mr Noonan said that the exemptions on capital gains tax offered to investors to hold properties for seven years were deliberately designed to ensure that investors would “hold rather than flip” their properties.
“To a large extent that has worked,” he said.
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