Nama plans €7.5bn development of offices and 20,000 homes

The National Asset Management Agency has announced plans for a €7.5 billion development programme to deliver 3.8 million sq ft of additional commercial space in Dublin's docklands and 20,000 new homes in the city and other areas of strong demand.

Nama chairman Frank Daly said this would result in it achieving a higher profit for the State on wind up of more than €2 billion. It had previously projected a surplus of €1.75 billion for the exchequer.

In addition, Nama said it would not affect its plan to have repaid all of its senior debt by the end of 2018.

The residential programme will require total funding of €5.6 billion with peak funding expected to be €1.8 billion. Nama said the proceeds from the sale of completed projects would be recycled to fund new “commercially viable” projects.

Some 78 per cent of the housing units will be in Dublin, with 15 per cent in neighbouring counties and 7 per cent in other parts of the country. Nama said the focus would be on starter homes for first-time buyers.

The docklands office development will require total funding of €1.9 billion, with peak funding up to €500 million. It has already kicked off this work with preparations for the demolition of Boland’s Mills on Dublin’s Pearse Street. Funding of €170 million for this project has been put in place, with the scheme rebranded as Boland’s Quay.

These developments are expected to generate up to 30,000 jobs when construction is at its peak and deliver commercial space equivalent to about double the original IFSC.

Joint ventures

In an effort to de-risk these programmes, Nama will look for joint venture partners interested in the co-funding and construction of projects.

The agency will seek expressions of interest from potential partners for its residential delivery programme in January 2016.

The Minister for Finance Michael Noonan welcomed the announcement by Nama and said the plan was deliverable. "It's not a pie in the sky announcement, this is real and will be delivered on time," Mr Noonan said.

Nama said all projects would be required to pass a stringent commercial viability threshold before it approves funding.

The agency will explore “appropriate financing options” for each site to establish the best financing mechanism.

These options include Nama funding all of the construction work, co-funding with other lenders, or establishing project-specific joint ventures with major investment or construction groups.

Nama is confident that the new programmes will not affect its plan to redeem all of its senior debt by 2018 and its sub-ordinated debt by 2020. Mr Daly said the agency would have the vast bulk of its work completed by its appointed wind-down date of 2020 and that it would look at options to complete any residual activities left at that stage.

The announcement was made v on Thursday at a launch in the Aviva Stadium in Dublin, which was attended by Mr Noonan and the Minister for Public Expenditure and Reform Brendan Howlin.

Dublin a ’home of choice’

Mr Noonan said: “Nama’s commitment to the Dublin docklands combined with its efforts to provide much needed supply of residential units will continue to encourage start-ups and multinationals alike to have confidence in identifying Dublin as the home of choice for their businesses and will allow us to continue to punch above our weight in the global competition to attract and retain talent.”

Mr Howlin welcomed Nama’s announcement “both in terms of the housing and commercial development resulting from these programmes and in terms of the enhanced return to the taxpayer these programmes will secure”.

Mr Daly said the agency was “committed” to delivering the new homes and offices and “hopes to leave a lasting and positive legacy for the coming decades”.

Nama chief executive Brendan McDonagh said the programme was designed “to maximise the return to Irish taxpayers on Nama’s secured assets”.

“We are on track to make a significant contribution to delivering large numbers of quality new homes where people need them but it will still only be 20 per cent of the forecast market demand,” he said.