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Nama’s North Dock woes cushioned by €500m docklands profit

Slump in demand for office space diminishes agency’s 40% stake in North Dock scheme

North Dock office scheme: Values in the block are down as much as 50 per cent from their peak

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Thu Jun 20 2024 - 05:44

The National Asset Management Agency (Nama), set up 15 years ago to take over toxic commercial real-estate assets from the State’s domestic lenders in the wake of the financial crash, is counting its blessings it managed to shift most of its assets before the latest downturn in office and retail property.

But it hasn’t escaped entirely. It recently emerged that initial bids for the landmark North Dock office scheme, 300m down the river from Nama’s Liffeyside headquarters, have come in at a level that will wipe out the agency’s 40 per cent equity interest in the block.

US investment firm Pimco, which provided €120 million of senior loans to the project, appointed receivers over the asset in February. The Irish Times reported three weeks ago that bids have come in below the €100 million mark. Oaktree owns 60 per cent of the project.

Irish commercial property values have slumped by 27 per cent since 2019, according to Central Bank of Ireland data, driven by the growth of working from home in the wake of the pandemic as well as a surge in interest rates.

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Values in the North Docks, however, are down as much as 50 per cent from their peak, Bloomberg recently reported, citing estimates from brokers and property investors.

Nama and its debtors originally held a 75 per cent interest in the 22 hectares of land designated as the Docklands Strategic Development Zone (SDZ) 12 years ago. It has resulted in the development of 390,000 sq m (4.2 million sq ft) of commercial space and more than 2,000 homes.

Nama chief executive Brendan McDonagh said at its results briefing on Wednesday that it had made about €500 million profit on its activities in the docklands. Sources said this includes a gain booked years ago from the sale of the North Dock site into the Oaktree-controlled joint venture. They said Nama is still in the money on the project even if it gets nothing from its ongoing interest.

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