Nama to step up lending to boost housing supply

Agency working to complete disposal of assets by 2018, two years ahead of plan

Minister for Finance Michael Noonan and Nama chairman Frank Daly (above) will publish a formal review of the agency’s operations today.   Photograph: Brenda Fitzsimons / The Irish Times

Minister for Finance Michael Noonan and Nama chairman Frank Daly (above) will publish a formal review of the agency’s operations today. Photograph: Brenda Fitzsimons / The Irish Times

Wed, Jul 16, 2014, 01:00

The National Asset Management Agency is set to step up its involvement in the Dublin property market as part of a new push by the Coalition to boost housing supply in the city and its hinterland.

The plan to intensify Nama’s lending activities comes as it works to complete the disposal of its assets by 2018, two years earlier than planned at the outset of the “bad bank” initiative.

The agency has reserves of some €2 billion at its disposal but more may be in play as part of the drive to tackle the shortage of new homes and offices.

Minister for Finance Michael Noonan and Nama chairman Frank Daly will publish a formal review of the agency’s operations today and unveil its strategy for the coming years.

After the Government pledged last week to take new steps to tackle the housing shortage in Dublin particularly, Nama will now work as the market recovers to step up its lending and development activities.

The basic objective is to deploy Nama’s “influence” in the market to ensure homes are built on land bank assets in west and south Dublin.

Although Nama does not own the land itself, it owns the loans used to acquire them.

The plan would see Nama provide more development financing to viable developers, the aim being to make up for the continued shortfall in bank lending.

Direct ownership Nama may also move to take a direct ownership of properties in situations where the borrower is in default. The objective here would be to bring forward use of unused property.

This is in addition to the Government’s resolution last week to introduce “use-it-or-lose-it” planning permissions to ensure development occurs in a timely fashion.

The problem facing the Government is that too few houses are being built and that this is driving prices and rents upwards with a disproportionate impact on low-income families.

Nama’s next phase will also see it increase its involvement in office projects in the north docks area of Dublin via increased financing and joint venture deals.

This follows planning approval for the Dublin Docklands Strategic Development Zone, including 280,000sq m of envisaged office space which is in sites under the control of Nama debtors or receivers.

Nama assets in Limerick, Cork and Galway are also likely to be included in the plan.

The Government said last week that Nama would accelerate its disposal strategy so 80 per cent of its assets would be sold by 2016.

It is understood, however, that the Government believes the agency can finish the disposal of all assets by 2018.

If the property market recovery continues, the agency believes it may be in a position to end its work with a financial surplus.

Nama believes it will complete the disposal of half its €30 billion portfolio by the end of 2014. With some €13 billion in assets sold to date, this implies an expectation of a further €2 billion in disposals by the year end.

A further €9 billion would be sold in 2015 and 2016, according to the current schedule.

The review to be published today was carried out under the legislation to establish Nama. It was delayed last year on foot of the Anglo Irish Bank liquidation.