Review says Nama sold €1.4bn assets by recent year-end

Achieving target for the next three years will require significant step-up in activity

Wed, May 21, 2014, 01:00

The National Asset Management Agency sold €1.4 billion worth of assets in Ireland in the year to the end of February 2014, according to a review by the Comptroller and Auditor General.

This compared with sales of just €900 million in the first three years of its operation and reflects the pick-up in investor interest in Ireland as the economy starts to recover.

The C&AG’s review states that Nama intended to generate €19.2 billion in disposal receipts between the beginning of this year and the end of 2016, of which €11 billion would be in Ireland. Another €4 billion is slated for sale between 2017 and 2020, when the agency is due to wind up.

Nama achieved sales last year of €3.7 billion so its target for the next three years involves a significant step up in activity, particularly in Ireland. According to the C&AG, the rate of disposal between 2014 and 2016 will need to be between four and five times last year’s level.

Loss of €100m
To date, the majority of sales have been driven by the London market, where Nama disposed of over 60 per cent of its assets by the end of last year.

By contrast, just 10 per cent of its portfolio in Ireland had been sold by the end of last year. Over 70 per cent is scheduled for disposal between 2014 and 2016, said the review.

The review shows that by the end of 2012, Nama debtors and receivers had sold €6.8 billion worth of property. This was €1 billion more than Nama had paid for the loans in 2009. A surplus of €1.1 billion was achieved on disposals in London over this period but a loss of €100 million was recorded in Dublin. It achieved par value in other locations.

Nama’s annual report for 2013 won’t be published until early next week but the C&AG’s review included some figures not yet made public. This included rental and other receipts of €800 million from debtors’ properties. It had realised €3.2 billion in the three years to the end of 2012.

Five per cent rental yield
The C&AG said the net rental yield being achieved by Nama was 5 per cent. The review said that barring a “further significant economic downturn in the next few years”, Nama will meet its minimum debt redemption objective.

At the end of 2012, Nama estimated that it would achieve a final surplus for the State of around €300 million.

As part of its review, the C&AG looked at the disposal process for 144 properties with gross proceeds of about €1 billion. This provided “reasonable assurance that the prices obtained by Nama were the best on offer in the market at the time property was sold”, it stated.

Nama welcomed the review and said it would appear before the Public Accounts Committee on May 29th to discuss the report in detail.