THE NATIONAL Asset Management Agency plans to seek tenants for some of its 8,000 apartments with a view to selling them as blocks to investors to help shift properties stuck on its books.
Brendan McDonagh, chief executive of Nama, said that most of the apartments were in Dublin. The apartment rental scheme is aimed at investment companies that manage rented apartment blocks, particularly in the UK.
Nama had already rented out properties in Sandyford, Dublin, Mr McDonagh told reporters after appearing before the Oireachtas Joint Committee on Finance, Public Expenditure and Reform.
Mr McDonagh said the Nama board had signed off on “a highly developed product” to allow buyers defer payment on up to 20 per cent of the property’s value to sell some of the Nama’s 2,000 houses and revive the market.
Nama was in “latter stage” discussions with Bank of Ireland, AIB and Permanent TSB to participate in the payment deferral scheme, and had invited the non-Nama banks into the scheme as well.
The product, to be launched later in the year, will apply to family homes and houses.
Nama chairman Frank Daly told the committee that developers are being paid average salaries of between €75,000 and €100,000 a year under business plans approved by Nama.
In exceptional cases, they were being paid up to €200,000 a year.
Developers are also being incentivised to recover loans with payments of 10 per cent of the loan value above a certain level, he said.
Fianna Fáil finance spokesman Michael McGrath said developers were being paid a “cash bonus for repaying their loans”.
“It is unpalatable,” said Mr Daly, but necessary if the State agency was to recover more cash.
Nama has approved the sale of €4.6 billion worth of property assets – close to its target of €5 billion for this year. It must repay €7.5 billion of the €30 billion debt used to buy €72.3 billion of loans from the banks by the end of 2013.
Mr McDonagh expects Nama to make a profit of at least €500 million this year before loan impairments.
Up to 15 per cent of the agency’s 850 debtors were “self-indulgent” and had not accepted the reality of their situation, he said, while a further 20 per cent were not viable.
The agency has recovered between €70 million and €80 million worth of assets, mostly property and “a bit of cash”, transferred by developers to relatives.
Nama is “very close” to taking legal action against unco-operative debtors to recover assets transferred to family members, said Mr McDonagh.
Nama had assessed business plans covering €22 billion of the €30 billion value of the loans, but Mr McDonagh warned there was “no huge pot of gold there” in terms of hidden assets.
Mr Daly expects Nama to break even at least but he was still confident that it would make a profit.
Debts would only be forgiven when a developer had no more assets left to repay loans, he said. “It is only something that would be considered way down the line.”
John Corrigan, head of the National Treasury Management Agency, said the State will have to tap the euro-zone’s permanent bailout fund, the European Stability Mechanism, if it had not raised “substantial cash buffers” of €5 billion by the end of the EU-IMF bailout in 2013.
The NTMA hoped to extend its short-term borrowing in the second half of 2012 and start borrowing in the long-term debt markets again as soon as possible.
“The earlier the better . . . Obviously, the later in 2013 the capital market will ratchet the price up against you,” he said.
“We have to get back into the market as early as possible in 2013,” he said. The Government couldn’t leave it until the end of 2013 to raise funding to repay a bond of €11.8 billion in January 2014. There was no specific plan to borrow long-term at a particular date or interest rate, he said.
“There isn’t a box that has a secret plan with a rate and date.”
