Nama says global slowdown risks delaying completion of new homes

NTMA HQ on Treasury Dock

Sarah Collins

Nama says the global economic slow down risks delays to delivery of new homes on the agency’s remaining land banks.

The National Asset Management Agency, Ireland’s bad bank, said surging construction costs and supply delays might impact its plan to sell off its property portfolio.

“A volatile global economic environment may cause disruption to market and construction activity, which may impact the pace at which Nama’s portfolio reduces,” Nama said in a letter to Finance Minister Paschal Donohoe on Wednesday, as it presented its second-quarter results.

“Construction cost, inflationary pressures and supply chain disruption pose a significant challenge to the commercial viability and planned delivery of new homes from Nama secured sites.”

So far in 2022, Nama has delivered 284 new homes, with a further 758 under construction. An additional 1,300 have Nama funding committed.

Nama recorded a profit after tax of €56m for the first half of this year, less than half the €119m it earned in the same period last year.

It generated €279m in cash in the period, bringing its total generated cash as of the end of September to €47.3bn.

The agency has transferred a total of €3.65bn to the State from its surplus and in corporation tax since it was set up in 2009.

Its expected lifetime contribution to the Exchequer will be in the region of €4.9bn.

Since it was set up 13 years ago to take bad loans off Irish banks’ balance sheets, Nama has delivered 26,165 residential homes, with the bulk built since 2015.

Just over half of the total were delivered directly through Nama funding, while 12,686 were delivered indirectly on sites sold by Nama debtors, or refinanced.

Nama estimates its remaining lands have the potential to deliver 18,800 new homes in the medium to long term. Of those, 1,800 units have been granted planning permission.

Most of those will be delivered after Nama has been wound up in 2025.

Nama said its objective is to “maximise the number of sites that are ready for future development” by funding planning applications and pre-planning feasibility assessments.

It warned that some sites could be “inhibited” by “commercial viability, infrastructure (roads, water, utilities, waste, etc.) or suitable planning permission”.

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