Clare Daly (Dublin Fingal, Independent)
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15. To ask the Minister for Finance to clarify his statement to the Committee on Housing and Homelessness that it is true that the Real Estate Investments Trusts bought at the bottom of the market but the same buildings were available to everybody else given that in August 2014 a company (details supplied) bought 761 apartments from the National Asset Management Agency for €211 million, a price beyond the reach of most; and his views on the wisdom of the agency selling residential property in large lots that are, equally, beyond the reach of most, if not all, potential purchasers. [10473/16]

Michael Noonan (Limerick City, Fine Gael)
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I would clarify, for the Deputy, that my statement at the Housing and Homelessness Committee, was stating the fact that such sales, regardless of the ultimate purchaser, are conducted on the open market, thus allowing all interested parties to bid.

It should also be noted that it is a decision for NAMA, in line with its independent statutory commercial mandate, to determine the value maximising sales strategy for each of its assets. It is also NAMA's established policy to sell assets, be they individual units or property portfolios, on the open market. So, while a transaction such as the one referred to by the Deputy would, naturally, attract investors who wish to purchase a certain class of asset, this does not impact the capacity for similar market participants to bid for those assets.

I would also wish to refer the Deputy to the NAMA Chairman and CEO's appearance at the Housing and Homelessness Committee on 11th May 2016. NAMA's opening statements and presentation to the Committee are available on NAMA's website. During his opening statement, the NAMA Chairman pointed out that 88% (or 11,219) of the 12,781 residential property units sold from NAMA's portfolio were sold on the open market by NAMA debtors and receivers in individual sales transactions to individual house buyers.

The relatively small number of remaining units, 1,562 units, (12% of the total) were sold on the open market by NAMA debtors and receivers as part of larger group or portfolio sales. The properties that were sold in groups or portfolios were typically already tenanted and vacant possession was not sought prior to the sale. 

I am advised by NAMA that the property referenced by the Deputy is in keeping with this trend as it was fully occupied by rental tenants at the time of the sale and vacant possession of the units was not sought.  It is not surprising that the sale of these rental units would be attractive to institutional landlords rather than aspiring owner occupiers.  Portfolios like this are generally acquired by investors, such as REITs, who are seeking long-term stable rental income rather than seeking to sell the properties in the short-term.  Existing tenancy arrangements tend not to be impacted by such sales.  Contrary to the Deputy's contention, a sale of these units on an individual basis to owner occupiers could be more likely to lead to the displacement of existing tenants.

With this in mind, I am firmly of the belief that REITs participation in Irish market is a positive step for many reasons. This is why I, through the Finance Act 2013, established the REIT framework which allows for modern collective investment ownership structure of real estate that provides benefits to both small and large real estate investors, provides benefits to the Irish property market and to the broader economy.

In particular, REITs support the rental sector through the professional management of both commercial and residential property. The long term return expectations of REIT investment capital ensures a proper focus on investment, enhancement, maintenance and efficiency of rental properties. Over the long term investment capital from REITs is expected to provide a greater and much improved stock of professionally managed rental accommodation in the Irish market ultimately contributing to greater security of supply and tenure for tenants.