NAMA seeks partners for €7.5bn development drive

NAMA has entered the final phase of its lifecycle with the launch of a €7.5bn development programme aimed at bringing forward 4m sq ft of commercial space in Dublin Docklands and 20,000 new homes in Dublin and other areas of strong demand in tandem with joint venture partners, writes Paul Norman.

As a first phase of the programme, which sees NAMA move from operating as an asset management agency (AMA) managing defaulted loans to operating as a proactive developer, creating value and establishing a positive legacy for the built environment in Dublin and beyond in an effort to boost capital returns to the Irish taxpayer.

Today NAMA has announced plans via Savills to provide €170m to fully fund a major office-led development in Dublin’s Docklands as the first plank of its mammoth domestic development progamme.

NAMA will also seek expressions of interest from joint venture partners n the New Year.

NAMA said the residential programme will require total funding of €5.6bn with peak funding expected to be €1.8bn. The proceeds from the sale of completed projects will be recycled to fund new commercially viable projects. The Docklands development programme will require total funding of €1.9bn with peak funding up to €500m.

In an effort to de-risk these programmes and to maximise the contribution of the alternative funding, development and construction sectors, NAMA said it will look for jv partners interested in the co-funding and construction of projects. With that in mind, NAMA will formally seek, in January 2016, ‘expressions of interest’ from potential partners for its residential delivery programme.

In line with NAMA’s obligations under Section 10 of the NAMA Act, all projects will be required to pass a stringent commercial viability threshold before NAMA approves funding.

The Agency said it will explore appropriate financing options for each site to establish the best financing mechanism specific to each. These options include NAMA funding all of the construction work required; co-funding with other lenders; or establishing project-specific joint ventures with major investment or construction groups. NAMA will also work with non-NAMA building platforms.

The funding programme is expected to generate up to 30,000 jobs when construction is at its peak and deliver commercial space equivalent to approximately double the original IFSC.

NAMA said it is confident that the new programmes will not affect its plan to redeem all of its senior debt by 2018 and its subordinated debt by 2020. Current projections indicate that the programmes are likely to increase NAMA’s projected surplus at wind up from the currently estimated €1.75bn to €2bn which will be transferred to the Exchequer when NAMA completes its work.

The announcement was made today at the formal launch of NAMA’s funding programme in Dublin, which was attended by Minister for Finance Michael Noonan TD and Minister for Public Expenditure and Reform Brendan Howlin TD, and hosted by NAMA Chairman Frank Daly and NAMA Chief Executive Brendan McDonagh.

As a first project, Mark Reynolds of Savills confirmed that full funding (€170m) had been made available by NAMA for the development of ‘Boland’s Quay’ at the former Boland’s Mill site in the docklands.

Last December Reynolds – the appointed receiver over the iconic Dublin site – submitted a planning application for the development of almost 30,000 sq m of offices for approximately 2,300 workers, 42 apartments, shops, cafes, restaurants and a number of new public squares and plazas. The plans were approved by Dublin City Council in July.

Reynolds commented: “The development of Boland’s Quay is now full steam ahead. We are delighted with NAMA’s commitment to funding its construction, as it enables us to move forward with the certainty that our plans for the site will come to fruition. This will be the most significant construction project this city has seen over the past 10 years and it has been supported by the SDZ fast-track planning scheme introduced by Dublin City Council, which has seen us bring the project from planning stages to development in less than a year.”

The scheme designed by Dublin architect Burke Kennedy Doyle, is expected to take over two years to full completion.

Reynolds concluded: “We need to ensure that we continue to attract the biggest players in global business to Dublin – providing the quality office and residential accommodation which will be seen at Boland’s Quay is paramount to that.”

Making the wider announcement today, Michael Noonan, Minister for Finance, said: “NAMA’s commitment to the Dublin Docklands SDZ combined with its efforts to provide much needed supply of residential units will continue to encourage Start-Ups and Multi-Nationals alike to have confidence in identifying Dublin as the home of choice for their businesses and will allow us to continue to punch above our weight in the global competition to attract and retain talent.

“On the residential side, today’s launch follows on from an announcement I made in my Budget speech that NAMA would be in a position to provide 20,000 additional housing units by 2020. This, in addition to the housing package announced recently by Minister Alan Kelly, demonstrates this Government’s commitment to addressing the housing shortage which is particularly evident in the greater Dublin area.

“I want to take this opportunity to thank the entire NAMA team for its continuing and tireless efforts to bring about such an important contribution to the recovery of the State.”

Brendan Howlin, Minister for Public Expenditure and Reform, said: “I commend NAMA for taking this considered commercial decision which will ultimately benefit the taxpayer. It is welcome both in terms of the Housing and Commercial Development resulting from these programmes and in terms of the enhanced return to the taxpayer these programmes will secure.

I look forward to seeing the SDZ come to life. I also look forward to the positive impact on the housing market your residential funding programme will have. Judging by today’s presentations, both will be remarkable achievements.”

Frank Daly, NAMA chairman, said: “NAMA has committed itself to funding the delivery of much-needed office space and quality homes and, in doing so, it hopes to leave a lasting and positive legacy for the coming decades.”

We are proud to be in a position to use NAMA’s unique blend of property and financial expertise, funding capability and scale to benefit the taxpayers the Agency was set up to serve.”

Brendan McDonagh, NAMA Chief Executive, said: “We are making the Dublin Docklands a better place to live, work, invest and create jobs and are on track to make a significant contribution to delivering large numbers of quality new homes where people need them.

This is an ambitious commercial programme but we are confident that we can deliver. We look forward to building on our successful track record of creating significant value for the taxpayer and asset managing our secured assets in the best way possible.”

Key features of Dublin Docklands SDZ programme

• 15 major new city blocks

• Almost 4m sq f of offices

• 66,000 sq ft of shops

• 2,000 homes

• 13,000 sq ft of restaurant (in schemes granted permission)

• 18,000 sq ft of new cultural and community space and high-quality civic plazas (in schemes granted permission or where planning has been submitted)

• one major new street

• Building cross-river access to DART rail line from North Dockland

• Building cross-river access to LUAS tram network from South Docklands

• Ireland’s biggest-ever student accommodation block

• Dublin’s tallest office block

pnorman@costar.co.uk

 

About CoStar News

Finance Editor, CoStar News
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