THE NATIONAL Asset Management Agency aims to spend €2 billion completing buildings and starting new projects from its own cash reserves, rather than new borrowings, and still meet its debt-repayment targets up to 2020.
The bulk of the four-year investment in the construction industry announced yesterday will be for commercial property and all of the investment for in-demand, viable projects, the State agency said.
The investment was unveiled as part of the next phase in Nama’s life after criticism it was moving too slowly to develop properties and was too focused on sales, mostly in the UK where the property market is stronger.
Nama had cash reserves of €4.6 billion at the end of March, generated from the sale of more than €7 billion in assets held by debtors.
The agency paid €3.5 billion to Irish Bank Resolution Corporation in a short-term deal with the bank in return for a Government bond to cover its March 31st promissory note payment, but expects to get this cash back when Bank of Ireland takes its part in the swap deal.
Nama chairman Frank Daly said Dublin, Cork, Galway and Limerick would recover quickest and this was where most of Nama’s properties were. There would be a demand for office space in Dublin from companies, particularly foreign direct investors, and this was where Nama would concentrate investment.
“There is already an indication that there will be a shortage in Dublin in the next two or three years, and obviously now is the time to plan for that,” said Mr Daly. He estimated the investment could create 25,000 construction jobs and another 10,000 in the wider economy.
Nama expects to lend at least a further €2 billion in vendor finance to buyers of commercial property on its books. It plans to launch at least one qualifying investor fund (QIF) through which to sell properties.
About 9,200 residential properties linked to Nama loans are generating rental income and 4,000 have been rented for the first time in the last 18 months, Nama said.
The Construction Industry Federation said the investment had to be the first of several measures to stimulate activity because on its own it would “not be widely felt”.
Nama had approved €402 million in loans to developers in the Republic to complete projects as of February, of which €289 million had been handed over.
Among the high-profile properties completed by Nama with the agency’s development capital was the Montevetro building sold to internet firm Google last year for €99.9 million. Nama invested about €40 million into the project.
In deals announced this month, Nama is lending €10 million to complete a residential and commercial project at Sandyford, and €13 million in the Charlestown shopping centre in north Dublin.
