Nama adviser gave positive property forecast in 2007

JOHN MULCAHY, the auctioneer advising the National Asset Management Agency on property valuation, made optimistic public comments about the outlook for the Irish property market as recently as two years ago.

Addressing the Oireachtas Committee on Finance and the Public Service on Monday, Mr Mulcahy, who has been seconded to Nama from his post as chairman of auctioneers Jones Lang LaSalle, said he had been a “bear for the last four years” when it came to property.

He said his pessimistic advice had not been popular in some quarters. However, in July 2007, Mr Mulcahy said he was optimistic about the commercial property market, which he described as healthy.

Speaking ahead of the publication of a half-yearly report by Jones Lang LaSalle on supply and demand for office space, he noted that office take-up was 10 per cent higher in the first six months of 2007 than in the same period the previous year.

“The prospects for the second half of 2007 and for next year looks equally promising, with a number of major space users . . . seeking proposals for suitable office accommodation,” he said.

At the same time, he gave a more sober assessment about residential property, saying the market needed to take some fiscal “Solpadeine” – meaning price corrections.

Then during 2008, Mr Mulcahy made several public comments in which he said that the current economic downturn had taken the froth off the commercial market.

Mr Mulcahy, a chartered surveyor with 39 years of experience, has been both managing director and chairman with the Irish arm of Jones Lang LaSalle, one of the world’s leading auctioneering companies.

Mr Mulcahy led the team that advised South Wharf plc when it sold the Irish Glass Bottle site for a record €412 million in October 2006. The deal, which involved complex legal issues, took six years to complete.

The site was bought by a consortium comprising property developer Bernard McNamara, financier Derek Quinlan and the Dublin Docklands Development Authority.

Mr Mulcahy, on behalf of his company, has been involved as an agent and an adviser in other prominent commercial property transactions.

He advised Larry Goodman when the Co Louth businessman bought the Earl of Kildare Hotel in Dublin and also wrote an appendix to a submission by the Jurys Doyle hotel group to Dublin Corporation designed to allow the re-opening of a hotel on the Ballsbridge site bought by developer Seán Dunne.

The Department of Finance said yesterday that Mr Mulcahy had been hired on secondment to Nama for a limited period as part of a team to devise a consistent overall methodology for property valuation.

A spokesman said that neither Mr Mulcahy nor the representatives of HSBC bank would be involved in the valuation of individual lands or properties.

That will be done by a panel, to be chosen by public tender, which will use the template for valuation methodology devised by Mr Mulcahy and others as the basis for valuations.

The department said that the choice of Mr Mulcahy reflected his expertise in valuation and also the need to hire somebody with understanding of the overall market.