The National Asset Management Agency (NAMA) expects commercial property prices to stabilise this year as it prepares to package assets into investment funds to tap growing interest from foreign investors, its chairman said on Thursday.
Irish commercial property prices have fallen by around 65% since their peak in 2007.
“There is strong reason to expect that commercial prices will stabilise this year,” chairman Frank Daly said in a speech in Dublin, predicting a series of tax breaks in the Irish budget in December would give the market a “substantial boost”.
Having approved asset sales of €7 billion since it was launched in March 2010, the agency is targeting a €1 billion profit over its seven to 10-year lifetime through asset sales and is working with property developers to ensure viable projects get off the ground.
Daly said NAMA had registered growing overseas interest in acquiring prime office and retail properties in Dublin and was planning to collect properties into so-called Qualifying Investor Funds to market to investors.
NAMA will acquire the assets from receivers or debtors then package them in various combinations which can then be sold, Daly said.
The agency, whose assets range from skyscrapers in London to farmland in the Irish countryside, will then assemble sub-portfolios based on asset types or geographical region to market to investors.
Daly, speaking to the Dublin Chamber of Commerce, also defended NAMA against widespread criticism in the Irish media over its lack of transparency.
“I do not have to tell you how absurd your negotiating position would become if the parties with whom you are negotiating had full sight of your hand of cards. This would be commercial madness,” he said.
Daly said NAMA has secured €381 million of additional security following negotiations with debtors and expected to increase that to €500 million.
It has secured pledges of €221 million of unencumbered assets from debtors and €160 million by reversing transfers of asset by debtors to family members and other interested parties.