National Asset Management Agency

Re: National Asset Management Agency

Postby missarchi » Thu Sep 17, 2009 10:48 pm

so what is affordable/social housing under name and how much will be provided?
What new land zonings have they invented?

over to grace the ace!~ where is the nama land bank map?
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Re: National Asset Management Agency

Postby garethace » Fri Sep 18, 2009 10:40 pm

I have heard Ronan Lyons PowerPoint presentations which show a diabolical zone of negative equity combined with unemployment statistics down the middle of the map of Ireland. I think that is what the Primetime feature focussed on the most in fairness, and showed the very most depressed parts of the country, where things really are bad.

http://www.rte.ie/news/2009/0917/primetime.html

But I think it was an interesting comment by the Edenderry auctioneer I think, who claims that property in Offaly main towns like Edenderry were doing better through the recession, and more deals happening than the villages and rural areas. So it does appear, that even in the heart of NAMA-land, good, tight urban planning seems to offer us a solution.

This is really I believe, where all of the students from Bolton St, UCD, Queens, Waterford and Limerick architectural departments should be heading this year. To try and capture some of the nature of the problem - what is actually, managing to struggle on as viable, sustainable development - even in the worst case situation - the heart land of NAMA land.

Ronan's blog entry here:

http://www.ronanlyons.com/2009/09/17/do-the-nama-figures-add-up-a-broader-and-more-realistic-assessment-of-long-term-economic-value/

Amongst others has attracted some interest.

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Re: National Asset Management Agency

Postby PVC King » Sat Sep 19, 2009 10:18 am

Interesting break down of the figures; I respect his honesty in saying that he like others have no idea where residential land values are going. I do however dispute his views that foreign assets have further to fall; European long term yield averages are roughly 5%; the figure used by Nama was 6%; what caused the crash was not 6% yields or even 5% yields it was the wall of money that was lent to investors from many countries at sub 4% yields. Those sub 4% valuations will not come back any time soon except in few selected markets such as Hong Kong.

I would also look at residential yields which at 3% are below European averages of 4% -5%; residential yields will almost always be lower on the basis that lot sizes are so much smaller which makes investing in a couple of flats a lot more accessible than buying an office tower or shopping centre. Residential property is always much less risky in that finding tenants generally is easier and if you at a difficult point of the cycle do a pragmatic letting below long term value you can adjust the rent back up in a year and not 5 years as is the case with commercial lettings.

Thankfully a stable platform has now been put under the banks; the taxpayer can now appoint expert staff to maximise value of the holdings through active asset management of the portfolio. What long term economic value turns out to be will have little to do with the holdings and has everything to do with how the wider economy performs with particular reference to employment levels and salary levels.
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Re: National Asset Management Agency

Postby garethace » Sat Sep 19, 2009 2:55 pm

If you click on the Late Late Show video clip here:

http://www.rte.ie/news/features/economicforum/avindex.html

Gerry Robinson makes the point about governments who run massive programs, who have no experience whatsoever running anything else in their lifes. For instance, the National Asset Management Agency, being decided upon by Green party ministers here in Ireland - none of them have ever spent a bean on construction in their lifes. But now, they are all suddenly experts in how to allocate billions and billions worth. There is a disconnection, which is worrying to me, between people forming policy and those doing the work.

The management of untold billions is a task that even the most skillful in the construction industry, anywhere in the world, including Dubai, would shy away from at the moment. What is even more saddening, is that the Green Party in Ireland have huge resources and expertise in Ireland, regarding so many things - utilities, transport, energy, communications - are perhaps neglecting those duties in order to focus on property, something they are light in terms of their knowledge. Lets face it, we should not get too hung up on property, and create too much of a Herculean task for ourselves in that sector, because it is unlikely to do much for improving the fortunes of the country.

Noel Whelan's IT article describes some of the problem.

http://www.irishtimes.com/newspaper/opinion/2009/0919/1224254861429.html

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Re: National Asset Management Agency

Postby PVC King » Sun Sep 20, 2009 8:01 am

I find Noel Whelan's article bizarre; lets look at Noel's background he was the first in house quants based political analyst, a role for which his analysis won universal respect. His attempts at Dail Eireann foundered in John Gormley's constituency and no doubt Noel is convinced that the first past the post system would have of course returned Noel straight to the Dail; the tone of his article suggests that anything less than mathematical carve up of decision making based on mathematics is scientifically unfair. The conclusion of the moral tone taken in the article is that the majority party would protect their electoral superiority and assert their numerical superiority at the ballot box. I would ask Noel to run the quants on an election next February or get off his soap box. We get the government we elect and in this case it is fair to say that the Green party have signed off a number of policy agendas in areas such as road transport that they would not have had in their manifesto; whilst I disagree with them taking the decision outside their parlimentary party it is their right to do so. I would also suggest that Noel's quants analysis would be equally accurate with their re-election chances if they took the moral high ground on a single issue.

In respect of the presumption that Gerry Robinson that ministers run multi-billion asset management / delivery programmes. I find this to be wrong outside the delivery of road and other physical infrastructure programmes which excluding the odd toll road produce assets that are of no interest to the private sector. Even in cases of the NRA/CIE/RPA there are civil service sub-departments which are charged with moulding and scoping the projects albeit that they need ministerial and cabinet sign off to receive the funding.

What makes Nama fundamentally different from running programmes is that in the remit of Nama is manage loans and not projects. Much of the portfolio deals with built assets that are in all reality semi-liquid property investments; the only decision to be made on these is whether the government instruct a policy of liquidating assets in breach of their lending covenants the second LTV or interest cover is breached or do they encourage a position of restructuring those loans to enable them to be perform to softer tests until medium term values return.

Another significant portion of the portfolio relates to what you would call the half built or untenanted properties; no government is qualified to make calls on what terms would be required to get tenants into empty buildings or which half built projects should receive further funding to be completed.

A decision needs to be made as to who makes decisions; do they hire a team made up of planners, construction managers, loan assessors and property fund managers to make those decions on their behalf or do they hand a fixed term contract to a consultancy(ies) to make those calls. Please do not try to tell me that either John O'Donaghue or the more successful Minister for Fun Michael D Higgins managed the Irish film industry; they both in their very different styles listened to the civil servants who from their professional backgrounds knew exactly where the fault lines were in every decision.
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Re: National Asset Management Agency

Postby garethace » Sun Sep 20, 2009 1:59 pm

What makes Nama fundamentally different from running programmes is that in the remit of Nama is manage loans and not projects. Much of the portfolio deals with built assets that are in all reality semi-liquid property investments; the only decision to be made on these is whether the government instruct a policy of liquidating assets in breach of their lending covenants the second LTV or interest cover is breached or do they encourage a position of restructuring those loans to enable them to be perform to softer tests until medium term values return.


As negative about NAMA as I have now become, I can still manage to look at NAMA and see more positive aspects about it than that. If what you describe, is all that NAMA hopes to achieve, then why do we need a dedicated state-based unit to do it in the first place?

All of what you describe above, and a lot more can already be done by the institutions and parties involved in the loan book. There is no requirement for NAMA to get on board to perform tasks described in the above quote. Certainly, at the cost and considerable complexity that NAMA will involve.

Other, perhaps negative, commentators have offered the suggestion that NAMA is necessary to ensure a transfer of wealth out of public funds into private shareholders' hands. Even if you took that as a goal, and did not dwell on the 'unfairness' of it all, then I could see why NAMA is needed. Then it would seem to me that NAMA has 'some' function it could perform. But what you describe in the quote above, doesn't require a NAMA or anything like NAMA.

Another significant portion of the portfolio relates to what you would call the half built or untenanted properties; no government is qualified to make calls on what terms would be required to get tenants into empty buildings or which half built projects should receive further funding to be completed.


Again, begging the most obvious question, where does that leave NAMA. What function does it propose to serve? What exactly is it going to do?

Sorry for asking the questions, but why should Ireland be setting up another state agency, which has nothing to do? In short, why do we need NAMA if the second quotation's statement is true?

A decision needs to be made as to who makes decisions; do they hire a team made up of planners, construction managers, loan assessors and property fund managers to make those decions on their behalf or do they hand a fixed term contract to a consultancy(ies) to make those calls.


Which brings me right back to the same place I have been. What is NAMA for? I mean seriously, we have to get a little bit real. We cannot go wasting months and months of political and parlimentary time, paying for services and advice in the order of more millions of taxpayers funds to set up an organisation which has no defined program or aims. When I read some of the above quotes, I understand why Michael Somers himself was as confused as he was. So am I, to be quite frank and honest about it.

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Re: National Asset Management Agency

Postby PVC King » Sun Sep 20, 2009 5:25 pm

The government has made an in principal decision to invest c€54bn of taxpayers money; clearly the government are doing this to preserve the well being of the domestic banking sector.

The Govt has made this decision following advice and come to the conclusion that they are receiving a portfolio of loans worth €47bn for the portfoio's current value plus an estimated top slice of €7bn on the development land holdings which is estimated to be realisable when the unprecedented overhang of development land which would be offered onto the market if the banks forclosed on all loans in breach of one loan covenant or another is removed.

It is an act of faith in their ability to manage the macro economy through the current downturn and restructure the economy away from one that relied what in hindsight was at national level too high a reliance on real estate as creator of wealth and at consumer level perceived to be a one way bet that was only up for the 14 years to 2007 and only down for the past 2; in about 2 years; one would assume that subject to the productive sector retaining International competitiveness; something approaching equilibrium sentiment will return.


There are three ways that this can play out; firstly if the government issues bonds and transfers €54bn to the qualifying institutions and simply waits for the sums to be repaid or the government gets activily involved in managing the holdings via NAMA.

If it is the former clearly the original borrowers or the financial institutions who pre NAMA hold the assets will continue to hold the assets, these borrowers in many cases have no capacity to raise additional finance and these borrowers will receive all the upside. In the second scenario the banks will take over the assets and it is clear that the banks even post NAMA will be repairing their balance sheets for a number of years to come; they will not want to extend their exposure to the property sector for a number of years to come.

In the third scenario where NAMA takes greater control there would be much easier access to credit markets to procure development finance for selected projects under government guarantees where the original developer could receive a project managment fee of say 3% - 5% to act as a consultant or if the firms were to be preserved say 8% - 12.5% if the QS function were undertaken in house.

Alternatively NAMA could select a joint venture partner where the land would act as the NAMA investment stake and the selected JV partner would supply development expertise and the sums required to plan, construct and market the development; using that model the upside would be shared.

If the money is transfered and there is no downside for the original borrowers then clearly the taxpayer is getting a very bad deal and NAMA other than needing a few fund accountants to mark the value of the securities to market will be non-existant. However it could be much more but a significant level of control over the portfolio would need to transfer to NAMA.
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Re: National Asset Management Agency

Postby PVC King » Wed Sep 30, 2009 7:39 pm

LUXURY goods maker Hermès is set to acquire the Bond Street store occupied by prestigious jeweller Asprey for £73.5m.

The French fashion house is buying the property, designed by Foster & Partners, from Quinlan Private, the Irish property investment firm that also owns landmark London hotels including Claridge’s and the Connaught.

Hermès is keen to expand its retail empire and is said to be interested in taking over occupation of the store for its own brand. The business is performing well despite the global recession.

Its last set of half-year financial results showed that turnover had increased by 7.6% to €875m (£802m).

In common with other property investors, Quinlan Private has seen the value of many of its holdings fall over the past year, but it has made almost £25m profit from its investment in the Asprey site.

It has owned the store since 2005, when it paid £50m to acquire the property.

In contrast to Hermès, Asprey has been finding the going tougher, racking up losses in each of the past two years, although these have been falling.
http://business.timesonline.co.uk/tol/business/industry_sectors/construction_and_property/article6851166.ece


Deal of the year by a distance; just proves that extreme quality can provoke special situations
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Re: National Asset Management Agency

Postby KerryBog2 » Thu Oct 01, 2009 2:58 pm

Again proves location, location, location. The £25 mill will just about pay a month or so of interest on the two bank sites he has in London.
Hermes is owned by a family (a tiny amount of its equity is on the CAC) so they can take a longterm view. Aspreys is owned by a couple of US venture funds and has been losing money........
Will be interesting to see if owning the property will help Hermes see off LVMH/Arnault, who were rumoured to be an interested buyer.
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Re: National Asset Management Agency

Postby PVC King » Wed Oct 21, 2009 7:49 pm

With a jingle jangle the auld triangle

by the banks of the union canal
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Re: National Asset Management Agency

Postby Pot Noodle » Thu Oct 22, 2009 12:16 am

I think there are Vestive Interest on here
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Re: National Asset Management Agency

Postby PVC King » Sat Oct 24, 2009 10:06 am

Pot Noodle wrote:I think there are Vestive Interest on here


Like this?

http://www.thesun.co.uk/sol/homepage/showbiz/bizarre/article2043330.ece
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Re: National Asset Management Agency

Postby missarchi » Sat Oct 24, 2009 10:46 am

ANZ bank has splashed $15 million on a new logo that it claims reflects its 'human' side.
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Re: National Asset Management Agency

Postby gunter » Thu Oct 29, 2009 1:17 pm

SPV!

How come nobody saw this coming?

This off-the-national-balance-sheet thing apparently requires the establishment of an SPV, a ''special purpose vehicle''. The SPV will be responsible for the purchase, management and disposal of loan assets identified and valued by Nama.

The SPV will be a separate legal entity jointly owned by private investors (51%) and Nama (49%)! . . . . . Who are these private investors?

This device is designed to keep the national balance sheet looking reasonably sane, so that the people we borrow money from won't jack up the interest rate because we're a financial basket case, . . . . but surely these people read the papers and know we've got this other €54 billion mortgage!

Who are these private investors, does anyone know?

I don't want to start hearing in a few months time the old familiar names again. There has to be a case for establishing a register of the people, companies and institutions etc. whose reckless trading* got us into this mess in the first place and certainly no one on that register ought to be allowed become an investor in this new SPV.

* When an experienced property developer pays outragous prices for development land, with money borrowed from an experienced bank, how is that not reckless trading?
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Re: National Asset Management Agency

Postby missarchi » Thu Oct 29, 2009 8:17 pm

Why do they need nama then if it's got no control?
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Re: National Asset Management Agency

Postby gunter » Tue Nov 03, 2009 12:41 pm

Heard George Lee's take on the Nama/SPV double act on Vincent Brown last night. Apparently it really is all smoke and mirrors, which is fine, except we're paying for the smoke and we're buying the mirrors.

As a couple of radio commentators have already pointed out, the interesting thing about the Nama positions, advertised today, is the inclusion of: “urban and land planning”, and “social housing and community development'', as areas where 'expressions of interest' are invited!

Obviously these positions could be just a fig leaf, which will be dropped once the real business of rogering the taxpayer begins, but if they are intended to be appointments to genuine positions that will be on an equal footing with the accountants, in a genuine attempt to address our dismal failures during the property bubble to really urban plan and to develop housing that is social and promotes community, then the whole Nama process will have been worth the pain in the backside.

I know we risk bringing johnglas into the discussion with imagery like this :)
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Re: National Asset Management Agency

Postby johnglas » Tue Nov 03, 2009 2:31 pm

No, I'm invisible now; haven't you noticed?
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Re: National Asset Management Agency

Postby reddy » Tue Nov 03, 2009 2:50 pm

gunter wrote:Heard George Lee's take on the Nama/SPV double act on Vincent Brown last night. Apparently it really is all smoke and mirrors, which is fine, except we're paying for the smoke and we're buying the mirrors.

As a couple of radio commentators have already pointed out, the interesting thing about the Nama positions, advertised today, is the inclusion of: “urban and land planning”, and “social housing and community development'', as areas where 'expressions of interest' are invited!

Obviously these positions could be just a fig leaf, which will be dropped once the real business of rogering the taxpayer begins, but if they are intended to be appointments to genuine positions that will be on an equal footing with the accountants, in a genuine attempt to address our dismal failures during the property bubble to really urban plan and to develop housing that is social and promotes community, then the whole Nama process will have been worth the pain in the backside.

I know we risk bringing johnglas into the discussion with imagery like this :)


Totally agree. If these positions are more than just lip service, Nama could be a vehicle for repairing some of the damage we've done over the last ten to fifteen years. Using the land to provide district centres, community facilities and introducing a sense of proper urban planning could be a major claw back.
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Re: National Asset Management Agency

Postby tommyt » Tue Nov 03, 2009 5:41 pm

[quote="gunter"]
As a couple of radio commentators have already pointed out, the interesting thing about the Nama positions, advertised today, is the inclusion of: [I]“urban and land planning”, and “social housing and community development'', as areas where 'expressions of interest' are invited[/I]!
QUOTE]

Any links?-

EDIT: ok found it : http://www.nama.ie/Publications/2009/Final_Advert.pdf

Ignore my lazy ass
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Re: National Asset Management Agency

Postby KerryBog2 » Wed Nov 04, 2009 3:00 pm

gunter wrote:..........Apparently it really is all smoke and mirrors, which is fine, except we're paying for the smoke and we're buying the mirrors.

As a couple of radio commentators have already pointed out, the interesting thing about the Nama positions, advertised today, is the inclusion of: “urban and land planning”, and “social housing and community development'', as areas where 'expressions of interest' are invited!


The SPV is no big deal, it is just another shell layer in the structure. What scares me is that we are again delaying the launch of NAMA and the unclarity remains as murky as months ago.

“urban and land planning”, and “social housing and community development'' are just two of the fourteen sectors from which NAMA board applicants should have experience.

I 'll use Gunter's phrase - 'this is more smoke and mirrors' - minds already are decided and "the right people" already chosen. It is just a way for the politicos being able to say "I was fair and open on the manner in which the NAMA appointments were made."

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Re: National Asset Management Agency

Postby PVC King » Fri Nov 06, 2009 2:56 pm

KerryBog2 wrote:The SPV is no big deal, it is just another shell layer in the structure. What scares me is that we are again delaying the launch of NAMA and the unclarity remains as murky as months ago.

“urban and land planning”, and “social housing and community development'' are just two of the fourteen sectors from which NAMA board applicants should have experience.

I 'll use Gunter's phrase - 'this is more smoke and mirrors' - minds already are decided and "the right people" already chosen. It is just a way for the politicos being able to say "I was fair and open on the manner in which the NAMA appointments were made."

K



KB as you may have observed I've always taken a sunnier view than that but if you are right it will be a missed opportunity that will not present itself again on this scale. A strong NAMA will require a multi-disciplinary approach that represents all areas of the built environment and investment community. Clearly the buyers and lessee's will have all of the power for the foreseable future; to think that Zoe type apartments or Georges Dock type commercial architecture will hack it going forward would be a huge miscalculation.

If the product is better then the land price will form a much smaller percentage of the price enabling NAMA to acheive better returns if prices rise. The future will be much smaller projects which will only acheive profitability if they are of a sufficient quality; if the main property player is run by exclusively by bond fund managers and bankers then NAMA will come to a very bad end.
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Re: National Asset Management Agency

Postby missarchi » Fri Nov 06, 2009 8:32 pm

I think you will find a lot of people will want nama to come to a bad end...

demand and supply... and existing conditions....

Nama will only make a name for it shelf if it offers cheap land to every joe blow that is unemployed or doesn't own land/house. Otherwise it will just be more of the same...
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Re: National Asset Management Agency

Postby KerryBog2 » Wed Nov 11, 2009 10:08 pm

PVC King wrote:KB as you may have observed I've always taken a sunnier view than that but if you are right it will be a missed opportunity that will not present itself again on this scale. A strong NAMA will require a multi-disciplinary approach that represents all areas of the built environment and investment community. Clearly the buyers and lessee's will have all of the power for the foreseable future; to think that Zoe type apartments or Georges Dock type commercial architecture will hack it going forward would be a huge miscalculation.

If the product is better then the land price will form a much smaller percentage of the price enabling NAMA to acheive better returns if prices rise. The future will be much smaller projects which will only acheive profitability if they are of a sufficient quality; if the main property player is run by exclusively by bond fund managers and bankers then NAMA will come to a very bad end.


Yes, PVC, you views are sunnier, but then my pension fund is almost gone and my income is a fraction of what it was, thus it is hard to remain uncynical, yet alone cheerful!

I do not want to go over old ground again, but I’ve long ago spoken about the rise in insolvencies and the site cost/land price being too high an input into the overall equation. Nama is here to stay, so it has to be made work and I agree that it needs people with a commercial outlook. Don’t hold your breath. We will see more political latchico appointees and gobshite civil servants way out beyond their depth.

What really kills me is the total lack of any
- Awareness in the population that it was partly to blame
- Credible Opposition
- Professional financial journalists
- Knowledgeable Radio/TV presenters
- Economists who are more interested in problem resolution that making a name for themselves.
- Expeditious corporate enforcement.

The FG notion of a “Good Bank” is nonsense, Bruton is a nice guy, but is not capable of being a finance minister. George bloody Lee has never achieved anything except to pontificate on the TV- he even had to repeat his Leaving to get into college. Nobody can / will lend until the financial health of industries is known. That is a Black Hole at the moment because no lender can calculate the worth of the"receivables" on a balance sheet. The dominos will start to fall when NAMA gets going and then we will see who has been bathing in the nude. That must happen before there can be more liquidity in the market.

Some time ago I spoke here about the need for the construction industry to look overseas – Parlon has been waffling on about this recently, talking about the need for “export credit”. So far, nobody has had the knowledge, cop, or basic wit to query him on what he means by this. What he really wants is financial guarantees from the State in the form of performance bonds. Given the "health" of our great names in construction, and their probable ability to complete a job, who would like to guarantee the performance of any one of them on an overseas project???

The only advantage this downturn has given me is more time out on the bog with the dog and gun. More sense out there. (Apart from the erudition here, of course:))

Rs
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Re: National Asset Management Agency

Postby KerryBog2 » Tue Feb 09, 2010 11:47 am

It is a coincidence that it is just a couple of days off three months since I posted no.224 above. We are still waiting for NAMA to start. The only new thing is the departure of Mr. Lee; it has raised him in my estimation.
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