Michael McGrath (Cork South Central, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

220. To ask the Minister for Finance the details, including the aggregate value of such transactions if individual transaction values cannot be provided, of the list of NAMA loan or asset disposals, including disposals by a receiver appointed by NAMA, since the inception of the agency where an open competitive sales process did not take place and where the disposal was made to a special purchaser, in tabular form; when NAMA's policy changed in respect of such off-market disposals; and if he will make a statement on the matter. [13542/17]

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

As the Deputy will be aware, NAMA does not own property, and its role in relation to property is as a secured lender. As a result, where properties and assets over which NAMA holds a charge are being sold, the sales process is managed by the property owner or by a receiver. NAMA does not manage the sales process, but NAMA guidelines require that a property is openly marketed, with the property owner or receiver appointing a sales agent to market the property and ensure that the sale is conducted in an open and transparent manner. As secured lender, NAMA's approval of the sale is required before its security can be released to complete the sale.

NAMA's Business Plan, which was published in July 2010, stated that NAMA would engage proactively with Government departments, local authorities, State agencies and other appropriate bodies in relation to their possible need for land/properties.  The NAMA Board formally approved a policy in relation to open marketing exceptions in 2014 and since then all exceptions have been logged. I am advised that since January 2014, 240 exceptions to NAMA's open marketing policy have been approved and the aggregate value of these transactions to date is €1.2 billion, which is less than 6% of total disposal proceeds since January 2014. Such derogations are dependent on achieving the current market value as determined by independent market valuations.

I am further advised that NAMA Board policy in relation to exceptions provides for four exceptions to its policy of open marketing:

1. Where specific written advice (either legal or professional) has been obtained by NAMA in relation to the disposal of the asset recommending that open marketing should not be pursued for commercial or legal reasons. Such assets are offered at the appraised market value confirmed by way of independent valuation report received by NAMA.

2. Where a government or State entity has approached NAMA to purchase an asset for legitimate reasons in the public interest. Such derogations are dependent on achieving the current market value as determined by an independent valuation.

3. Where NAMA, through NARPS, acquires assets for social housing purposes from NAMA debtors or receivers for onward leasing to Approved Housing Bodies (AHBs).  Such derogations are dependent on achieving the current market value as determined by an independent valuation

4. Where the asset is the subject of a compulsory purchase order (CPO) by a State body or local authority.

Included in the first exceptions categoryare transactions which resulted in full redemption of par debt, transactions involving defective security and transactions involving the sale of assets where there were legal impediments to open market sales. These included cases involving existing ownership agreements and third parties with legal entitlements or pre-emption rights relating to the assets. Table 1 provides a breakdown by sub-category. NAMA's primary objective under the NAMA Act is to obtain the best achievable financial return for the State and in cases where it can be demonstrated that the best achievable price for an asset will not be achieved on the open market, derogation from NAMA's open marketing policy is sought from the appropriate delegated authority. Such assets are offered at the appraised market value confirmed by way of independent valuation report received by NAMA. The total value of transactions in this category was €795m.

The second exceptions category relates to cases where State bodies require certain property assets in the public interest. This includes the sale of sites to the Department of Education for the provision of primary and secondary schools and properties and sites sold to local authorities and to various Government departments and State agencies. This category also includes sites identified by IDA Ireland as suitable for Foreign Direct Investment. Derogations are applied in instances where the purchaser is an existing tenant or where an existing business is looking to expand into an adjoining NAMA-secured property or site. Again, such derogations are dependent on achieving the current market value as determined by an independent valuation. The total value of transactions in this second category was €242m.

Thethird exceptions category relates to NAMA's engagement with the Department of Housing, Planning, Community & Local Government and the Housing Agency in relation to the supply of residential properties for social housing purposes. Since the start of 2012, NAMA has identified 6,941 houses and apartments controlled by its debtors and receivers as available for social housing. Of these, 2,748 properties have been confirmed as suitable by local authorities. NAMA, through its special purpose vehicle, NARPS, purchased properties from its debtors and receivers for onward long-term leasing to local authorities or AHBs. In addition, AHBs directly purchased residential properties for social housing purposes. In total, social housing transactions valued at €149m have received derogation from NAMA's policy of open marketing. Again, such derogations are dependent on achieving the current market value as determined by independent market valuations.

The fourth exceptions category sites subject to a CPO by a local authority or other State body accounted for €9m in transactions.

TABLE 1below summarises the position since January 2014.