So what did the National Asset Management Agency announce this week?The State loans agency said it plans to invest at least €2 billion to finish building projects, improve commercial properties and develop "greenfield sites" over the next four years, to avoid future property shortages.
The following day, the State’s budgetary watchdog, the Comptroller and Auditor General, said in a report on Nama that the agency planned to lend €3.5 billion for this purpose over its expected life, up to 2020.
Why is Nama doing this?The agency has been criticised for being a drag on the Irish property market by focusing on selling properties in the UK, where the market is stronger than in Ireland, and not doing enough here to kick-start the moribund market. Nama has to spend money on completing and developing properties in Ireland if it is recover the €32 billion it borrowed to buy property and related loans with a face value of €74 billion. A fifth of Nama's loans are secured on undeveloped land and a further 9 per cent is made up of properties in development. More than half of Nama's underlying collateral is Irish property.
Will Nama officials be putting on hard hats and high-vis vests to start building?No. The agency plans to lend to about a third of the borrowers on its books, who will do the work for it. Nama will also approve the payment of salaries to those debtors. The agency said the plan could create up to 35,000 jobs.
Where will Nama be pumping money into projects?Where there is demand, Nama chairman Frank Daly said. The agency will invest only in projects that are viable – most likely in the greater Dublin area and in other cities, where multinationals will require property. Nama's Irish properties are for the most part in or around the cities.
Does this mean it will be completing ghost estates or other residential properties?Nama doesn't own as many of the worst ghost estates as you might think. The agency has about 4,000 uncompleted residential properties that it plans to finish.
Has Nama already loaned money for the completion of properties?Yes. Until the end of 2011, Nama had approved new lending of €975 million, of which it debtors had drawn down €720 million.
Can you give me an example of the kind of building that has received funding from Nama?The highest-profile example is the Montevetro building, next to Grand Canal Dock Dart station, in central Dublin. Nama provided a further €40 million to complete the property, and the building, one of the biggest office blocks in Dublin, was sold to Google for €99.9 million.
So where is Nama getting the money? It's not borrowing it, is it?No. Although Nama has the legal authority to borrow and to lend developers up to €5 billion, the agency is raising cash from debtors who are selling properties and repaying their loans. Nama took in about €6.2 billion in cash up to the end of 2011; about half of this came from property sales, mostly in the UK.
Simon Carswell
