In the context of its overriding commercial mandate, NAMA seeks to manage its portfolio in Ireland in a manner that complements the objectives of other public bodies, including Government departments, State agencies and local authorities. One way that NAMA gives practical effect to this is by giving public bodies first option on the purchase, at assessed market valuations, of property securing NAMA loans. In line with this, NAMA has facilitated the sale of land and property for a range of public uses including schools and healthcare facilities.

Another important part of NAMA’s work is to facilitate important transactions in the Irish property market that might not otherwise take place. A good example of this is NAMA’s on-going work in identifying suitable properties for companies looking to establish or expand existing business operations in Ireland and facilitating engagement between these companies and NAMA debtors and receivers. NAMA’s work in this area is closely aligned with that of IDA Ireland and other State agencies whose core responsibility is to attract and expand Foreign Direct Investment activity and employment in Ireland.

This has resulted in a number of very significant property transactions in Ireland with companies such as Google, Facebook, Eli Lilly, Kerry Group, Novartis, LinkedIn, Amazon, BskyB, Adroll, and Scottish and Southern Energy. Examples of such transactions in 2014 include the letting of a combined 250,000 sq. ft. of Grade A office space at 4 and 5 Grand Canal Square to Facebook for its EMEA headquarters, the sale of an office development site in Dublin 2 to LinkedIn and a 10 year lease arrangement with Yahoo for over 71,000 sq. ft. of office space at the Point Village.

NAMA is also working with local authorities and other public bodies in the planning system to support the achievement of key policy objectives including, for example, the resolution of the problem of unfinished housing estates.

Social Housing

NAMA continues to work closely with the DECLG and the Housing Agency in seeking to match the residential stock held by its debtors and receivers with the requirements of local authorities for social housing. By end-2014, NAMA had identified over 5,750 residential properties as being available and potentially suitable for social housing. Of these, demand has been confirmed by local authorities for just over 2,200 residential properties.

The onus for determining the suitability of these properties for social housing purposes rests with the local authorities and the Housing Agency. An important consideration for local authorities when assessing the suitability of identified houses and apartments is the requirement to provide for an appropriate mix of housing tenures and to avoid undue housing segregation within individual developments and wider residential areas.

Once the suitability of a property has been confirmed, NAMA facilitates contact and negotiation between its debtor or receiver and a local authority or Approved Housing Body to acquire the property. Contractual arrangements can take the form of a lease or purchase. In addition, as a means of expediting the provision of social housing, NAMA established a special purpose vehicle – National Asset Residential Property Services Limited (‘NARPSL’) – to purchase units from its debtors and receivers and to make them available to Approved Housing Bodies by way of a long term lease. NAMA’s involvement has facilitated what may potentially become one of the single largest allocations of social housing in the history of the State.

By end-2014, 1,068 residential units had been delivered under this initiative. The delivery of these units has involved 65 individual transactions across 15 counties.

Of the 472 properties which were delivered during 2014, almost 60% of them were located in Dublin. It is noteworthy that 53% of the 2014 properties were delivered through NARPSL which highlights the importance of the role of this mechanism. It is unlikely that these units would otherwise have been delivered due to the lack of available capital funding. NARPSL has to date spent €29m in acquiring 252 units for social housing. This initiative will generate a future rental income stream for NAMA.

Capital expenditure in excess of €20m has been incurred to date in completing residential properties for social housing use. Works funded by NAMA include both the completion of buildings and the remediation of building defects, such as non-compliance with regulatory standards which has been a prevalent feature of many of the residential developments that came within NAMA’s portfolio following its acquisition of the related loans.

FIGURE M: Units identified by NAMA for social housing at end-2014

Examples of properties delivered for social housing in 2014 through NAMA’s social housing SPV, NARPSL include:

Social Housing Delivery as at Q4 2014

Full schedule of properties delivered for social housing by NAMA via an Approved Housing Body or local authority to end-2014.

ESRI Study

NAMA, along with Banking & Payments Federation Ireland, is co-funding a programme of research by the Economic and Social Research Institute (‘ESRI’) on the Irish residential property market. The objective of the programme is to produce practical market research and insights that will facilitate informed decision making by policy makers and market participants, including potential purchasers, investors and the construction industry.

The initial phase of the research in 2014 was focused on the demand for housing, with reports delivered on demographic change, household formation and housing need, and the role of credit in the housing market. A number of papers have been published by the ESRI as a result of the research completed thus far. These are Alternative Scenarios for New Household Formation in Ireland (in April 2014), Household Formation and Tenure Choice (in July 2014), Projected Population Change and Housing Demand: A County Level Analysis (in August 2014) and The Role of Credit in the Housing Market (in December 2014) – all are available on www.esri.ie.

In September 2014, NAMA convened a special National Housing Supply Conference to bring together policy makers from national and local Government and wider stakeholders to discuss the supply issues facing the housing market. The results of the ESRI research helped to inform the conference and its deliberations.

The next phase of the research by the ESRI will focus on the supply of housing to meet demand, with initial research findings expected in mid-2015.

Resolution of unfinished housing estates

NAMA advances funding for site resolution works on unfinished housing estates in which it has an interest as a secured lender. The DECLG, in conjunction with local authorities throughout the country, prepared an updated survey in 2014 of unfinished housing developments. Based on that survey, NAMA has security over 229 or 23% of the revised estimate of 992 unfinished housing estates in the country. This represents a substantial reduction in the number of unfinished housing estates within the overall NAMA portfolio over the course of 2014 and reflects the impact of funding to debtors and receivers to undertake remedial works in line with Site Resolution Plans agreed with local authorities. NAMA has advanced in excess of €5m for such works to date, which include the completion of internal roads and paths and the completion of remaining housing units to a saleable standard.