ONE OF the State’s biggest property developers believes Nama will take over most of its assets, but that the process will benefit both it and the economy.
The Government’s plan to recapitalise the banks hinges on the proposed National Asset Management Agency (Nama), which will take over up to €90 billion in property loans.
Listed property investor Real Estate Opportunities (REO), whose biggest shareholder, the John Ronan and Richard Barrett-controlled Treasury Holdings, is Nama’s landlord, believes the agency will take over the loans it has from the banks.
John Bruder, managing director of Treasury Ireland which is part of the Treasury Holdings group, told The Irish Times yesterday that the company has studied the draft Nama legislation. He said the agency could take over good and bad loans. “It’s our expectation that a lot, if not all, of our portfolio will end up being subsumed into Nama,” he said. Mr Bruder added that, unlike other players in the market, none of REO’s loans are distressed. The company owns a large number of commercial and retail properties, including the landmark Central Park complex close to Leopardstown in Dublin, Montevetro on Barrow Street in the city centre, and a range of others in the capital’s main business district.
In Britain, it owns the flagship Battersea power station, which it is redeveloping as a new urban centre.
REO yesterday reported that its Irish properties, including investment assets and those under development, were worth just over €1.3 billion at the end of June, an 8 per cent fall over the previous six months. Its British interests were worth £388 million, a decline of 14.5 per cent.
Mr Bruder said that if loans related to part or all of its portfolio are taken over by Nama, it will simply mean that the company will be repaying the agency instead of the banks. If the Oireachtas passes the legislation on schedule, Nama will begin its work towards the end of the year on a phased basis, taking on the larger loans first. On that basis, REO expects to begin dealing with agency around December or January.
Under the terms of the proposed legislation, Nama will assume the banks’ rights and obligations in relation to any loans it takes over.
Mr Bruder added that the Nama process should be positive for both the company and the economy generally, as it will allow the banks to raise money that can then be loaned.
Nama’s critics argue that it will result in the taxpayer taking on too much risk as the State will overpay for the loans. However, the Government and the system’s supporters say that the proposed valuation method will not expose the taxpayer to excessive risk, and that the full amount of the loans will be recovered.
