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IPE special report May 2018

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Ireland's NAMA offers pension funds 70% finance on repackaged property assets

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IRELAND - The agency set up to manage real estate assets linked to €74.2bn in non-performing loans from five Irish banks is to offer pension funds 70% financing to take the property off its hands.

In a statement yesterday to the National Asset Management Agency (NAMA) public accounts committee, chief executive Brendan McDonagh said the agency would expect pension funds, insurers and sovereign wealth funds to come up with "significant equity capital upfront" - 30% or more of the asking price - for commercial assets.

"Against a background in which financial institutions are reluctant to underwrite a high proportion of lending to individual property ventures, liquidity continues to act as a serious constraint on market activity," McDonagh said.

One 70% financed transaction is already in the works, with around 30 expressions of interest in a single asset.

A spokeswoman for the agency said yesterday there had been "significant levels of interest right across the globe" from pension funds and sovereign wealth funds in the scheme's portfolio.

"NAMA meets many parties on a weekly basis that are enquiring about opportunities in Ireland and across the agency's portfolio," she said.

That portfolio includes €18bn exposure to property in the Irish Republic, €1.3bn in Northern Ireland, €6bn in London and €4.7bn in other parts of the UK. 

NAMA also has €1.5bn in mainland European exposure.

The persistently moribund Irish real estate market resulted in a €1.2bn decline in the value of the scheme's property assets last year.

NAMA also announced earlier this week that it would bundle assets in its €14.5bn commercial portfolio to make them more attractive to investors.

McDonagh said: "It should be possible to assemble portfolios based on asset types or geographical region and to secure international investment based on specialist investor preferences.

"The assets most likely to attract interest include large office buildings, shopping centres and other retail and industrial properties."

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