Mick Wallace (Wexford, Independent)
Link to this: Individually | In context | Oireachtas source

277. To ask the Minister for Finance in view of the recent revelations of the selling-off of assets at fire-sale prices, if he will confirm the value of assets and loan portfolios that remain to be sold by the National Asset Management Agency; and if he will make a statement on the matter. [28602/15]

Michael Noonan (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

NAMA has not engaged in "fire sales" and the suggestion by the Deputy that it has done so is inaccurate. 

NAMA's demonstrable strategy in each of its main markets has been to release assets for sale in a phased and orderly manner consistent with the level of demand and the absorption capacity in each market. In the period to the end of 2013, this meant concentrating sales in Britain, particularly London, where commercial investment property yields had fallen in some cases below 3%. Over that period, sales in Britain accounted for 73% of NAMA's total sales proceeds.

In contrast, I am advised that NAMA's strategy in Ireland over that period was to limit asset disposals into the market, particularly in the period to end-2012 when prices were still trending downwards. Reflecting this, in the period to end-2012, NAMA had disposed of less than €1 billion or 5% of its Irish portfolio. This information is set out in my Section 227 Review of NAMA, which was published in July 2014.

NAMA advise me that the Agency's focus during that period was primarily on ensuring that debtor properties were efficiently managed, that rental and occupancy were optimised and that rental income was fully captured. NAMA also sought to assist the Irish market's recovery by offering a limited number of assets for sale to test investor appetite and help bring about price discovery. I am advised that NAMA did so in a number of cases with the benefit of NAMA vendor financing. The interest generated by those transactions strongly pointed towards a basis for the market s ultimate recovery. NAMA, however, waited until that recovery was fully underway before increasing the flow of assets to the Irish market.

I would argue that this patient approach, which has been supportive of market recovery, is not how an agency engaged in "fire sales" would behave. Indeed, NAMA inform me that the Agency strongly resisted attempts from opportunistic buyers looking to acquire Irish assets at what could be regarded as "fire sale" prices in 2010 and 2011, instead, as mentioned, focusing on the sale of appropriately yielding British assets in order to fund its operations, fund its investments in Irish assets to enhance their longer-term value and to retire debt. 

It is my experience that those who suggest that NAMA sold assets prematurely tend to draw attention to the same handful of transactions in 2011 and 2012. Such critics ignore the fact that NAMA had to sell some assets in Ireland to help generate some level of transactional activity and seed a recovery in the Irish property market. In addition, NAMA sold assets in order meet its end-2013 debt repayment target, a target which was monitored by the Troika. NAMA has, since mid-2013, been able to sell substantially more assets at far more favourable pricing and, in turn, accelerate its senior debt repayments and progressively remove that contingent liability on Irish taxpayers - further enhancing our economy's recovery.

The value of loans and assets as at end-2014 was, as per NAMA's Annual Report and Financial Statements for 2014, which is available on the Agency's website, €13.44 billion. I intend to publish NAMA's Quarterly Report and Accounts for the period to end-March 2015 shortly.