BELFAST BRIEFING:As trepidation and resentment grow, the agency's role in the North is to be explained, writes FRANCESS McDONNELL
THREE MONTHS ago he was virtually unknown in Northern Ireland, now Peter Stewart is the hottest ticket in town. His gig in Belfast next month has sold out.
What is his secret? Simply that Stewart could become Northern Ireland’s de facto champion over the next few months. He is set to be the chair of Nama’s Northern Ireland Advisory Committee and, together with Frank Daly and Brendan McDonagh, he is going to headline a gig in May which promises to reveal what Nama could mean for the North.
The Northern Ireland Chamber of Commerce event will be the Nama three’s first public outing in the North. It will also be the first time Northern Ireland businesses will get an opportunity to quiz senior Nama executives about what role exactly the agency will play in the North.
The first loan transfers in the south by Nama have sent a shiver of trepidation through certain companies in Northern Ireland with significant development loans with Irish banks.
The Business Alliance believes that Nama could in the worst-case scenario result in additional burdens being placed on Northern companies at a time when the local economy is “emerging slowly from the recession”.
This would, according to the Business Alliance, be “very unhelpful” to say the least.
In principal, according to the Business Alliance, any company or individual in the North that holds a land or property loan of more than €5 million in notional value could have that loan transferred into Nama.
The Business Alliance also states: “Consideration is being given to reducing the €5 million threshold to €1 million, although this may involve too great a workload for the new institution in the initial period. Clearly, if this lower threshold was to be set there would be a very significant increase in the number of companies impacted by the proposals.”
According to at least one local property insider, the discounts imposed by Nama on development portfolios which are worth a fraction of what companies and private developers paid for them are a “fire just waiting for a spark”.
Major Irish financial institutions which operate in the North, chiefly Anglo Irish Bank, Bank of Ireland and Allied Irish Banks via First Trust, have been quietly setting up their own Nama-related teams in Northern Ireland over the last few months.
But there is a feeling among some companies that these banks have been less than communicative about how their clients will fare if and when their business is transferred to Nama.
Perhaps it is because the banks themselves have been somewhat in the dark about how Nama will operate in the North, but this has not helped lessen a certain wave of resentment that appears to be gaining momentum about the agency generally in Northern Ireland.
Property development companies and individuals who paid high prices for prime sites at the height of the North’s short-lived property boom could not be in a worse place than they are at the moment.
Latest industry research shows the Northern Ireland property market is in the grip of a major slump which appears never ending. According to the Nationwide building society the North is now officially the worst-performing region in the UK when it comes to house prices.
Northern Ireland is the only part of the UK where average prices are lower today than they were in the same quarter one year ago.
Martin Gahbauer, Nationwide’s chief economist, believes there are a number of factors to blame for this but the local economy is the chief culprit. “Unemployment has risen more sharply in Northern Ireland than in other regions, which is likely to be hindering the recovery in its housing market,” he said.
In short there is no end in sight to the misery that local property developers and companies now find themselves in and with Nama just around the corner it could get much worse.
Perhaps that is why there is an air of resentment circulating in certain quarters that Northern Ireland-based businesses are somehow getting sucked into a Nama-related minefield which was born south of the Border.
It is hard to feel sympathy for companies and developers who speculated in a boom time and undoubtedly enjoyed the resulting rewards.
If Nama had not come north of the Border it would just have been a matter of time before the ticking time bomb of the current gigantic and unserviceable property loans still in play came back to haunt certain Northern Ireland-based companies.
As it is Nama is now a reality for all concerned and the questions it poses remain to be answered.
Tickets for Peter Stewart’s gig at the Chamber of Commerce Nama-briefing lunch went on sale at £37.50 but if he sheds some light on the current situation they could well end up being priceless.
