NAMA publishes 2020 year-end review

04 Jan 2021

NAMA has today published an end-of-year review summarising progress made during 2020 and since inception. 2020 highlights include the following:

• NAMA generated €900 million cash in 2020, exceeding its target. Since inception, the Agency has generated cash in excess of €46 billion from its operations.

• NAMA expects to report a full-year profit for 2020 – its 10th consecutive year of profitability.

• NAMA expects to transfer €1 billion to Exchequer during 2021.

• NAMA transferred €2 billion cash from its lifetime surplus to the Exchequer in June 2020. The Agency forecasts that it will deliver a total surplus of €4 billion to the Exchequer, subject to market conditions. It will make surplus transfer payments of €2 billion to the Exchequer in 2021 and 2022, subject to market conditions.

• NAMA redeemed the final outstanding €1.06 billion in subordinated debt in March, completing the full repayment of all €32 billion debt originally issued by NAMA to acquire loans.

• In May, NAMA acquired the €56 million private investor equity, eliminating the Agency’s final outstanding external obligation and giving the State 100% ownership of NAMA.

• NAMA’s residential delivery programme continued to facilitate the delivery of much needed housing across Ireland throughout 2020, despite the impact of Covid-19 restrictions on construction.

By end-2020, 19,000 homes have been directly or indirectly delivered through NAMA funding.

This figure consists of: o 12,450 units funded directly by NAMA o 6,550 units completed on sites for which NAMA had funded planning permission, enabling works, legal costs or holding costs prior to disposal.

• To date, NAMA has delivered over 2,600 social housing units to local authorities and approved housing bodies. This figure excludes additional units provided under Part V arrangements on NAMA-secured sites.

• NAMA has continued to make significant progress in facilitating the delivery of commercial office space and residential units in the Dublin Docklands SDZ, which, on completion, will deliver 4.2million square feet of commercial space and over 2,000 residential units across the 15 original NAMA-related sites. By December 2020, just 14% of NAMA’s interest in the Dublin Docklands remained under construction, with the other 86% now complete or sold.

• The process to seek an investment partner for the development a large site in the Poolbeg West SDZ concluded in December. The site has potential to deliver 3,500 residential units and 1 million square feet of commercial space.

CASH GENERATION AND PROFIT

€900 million cash was generated through NAMA’s disposal and portfolio management activities in 2020. This result exceeded targets, despite the impact of Covid-19. A total of over €46 billion in cash has been generated since the Agency’s inception, primarily through asset and loan sales. NAMA expects to be profitable in 2020.

SURPLUS TRANSFER AND REPAYMENT OF OUTSTANDING OBLIGATIONS

NAMA expects to transfer €1 billion to Exchequer during 2021.

In June 2020, NAMA completed the payment of €2 billion to the Exchequer, representing the first transfer from NAMA’s projected lifetime surplus of €4 billion. Further transfers totalling €2 billion are expected to be delivered in 2021 and 2022, subject to market conditions. In March 2020, NAMA used its strong cash generation to redeem the final outstanding €1.064 billion of subordinated debt. In May 2020, NAMA acquired the 51% shares held by the private investors in National Asset Management Investment Agency DAC for €56.1 million With these repayments, NAMA has extinguished all its senior and subordinated debt obligations, which stood at €31.8 billion at inception (comprising €30.2 billion senior debt, the last of which was redeemed in 2017, and €1.6 billion in subordinated debt). Accordingly, NAMA is debt free and is now 100% owned by the Minister for Finance.

RESIDENTIAL DELIVERY

Covid-19 restrictions resulted in unavoidable delays to construction projects across all sectors. However, through its Residential Delivery programme, NAMA continued to work with its debtors and receivers to fund and facilitate housing units across NAMA-secured sites, where commercially viable. The number of housing units delivered directly by NAMA’s residential delivery programme since 2014 totalled 12,450 by end 2020. A further 6,550 units have been delivered on former NAMA-secured sites which benefitted from NAMA asset management and/or funding. Therefore, a total of 19,000 homes have been delivered or facilitated nationwide through NAMA funding. NAMA’s current residential pipeline is in excess of 25,000 additional units comprising: • 6,400 construction-ready units (under construction or with planning permission) • 7,750 units currently in the planning system (applications lodged or being prepared) • 11,000 units in the pre-planning and feasibility stage, or with long term potential.

SOCIAL HOUSING DELIVERY

NAMA has delivered 2,614 residential units from its secured portfolio to local authorities or approved housing bodies for social housing purposes across Ireland. These residential units have provided homes for over 8,000 people. Over half of these units were delivered via NAMA’s social housing vehicle, NARPS. Approximately €350 million has been invested in the remediation or completion of properties or for the purchase of properties for social housing use.

DUBLIN DOCKLANDS SDZ AND POOLBEG SDZ

Since 2014, NAMA has made considerable progress in delivering commercial and residential space in the Dublin Docklands SDZ. On completion of all sites in which NAMA originally had an interest, a total of 4.2 million square feet of commercial space and 2,183 residential units will be delivered. This delivery has been a significant factor in the attraction of foreign direct investment to Dublin.

By end-December 2020, 86% of sites in which NAMA had an interest are construction completed or have been sold with the benefit of planning permission. Just 14% of NAMA-related projects remain under construction.

The Poolbeg West SDZ Planning Scheme was formally adopted by An Bord Pleanála in April 2019 and in January 2020 NAMA obtained the grant of planning permission for phase 1 infrastructure.

In December, NAMA announced the completion of a comprehensive process to select an investment partner for the development of a large site in the SDZ. The successful bidder, a consortium consisting of Ronan Group Real Estate, funds managed by Oaktree Capital Management, L.P. and Oaktree affiliate Lioncor Developments Limited, will be the 80% majority shareholder in Pembroke Ventures DAC (“PVD”). NAMA will retain a minority 20% shareholding in PVD.

The site has potential to deliver 3,500 residential units (including 10% Part V and 15% social and affordable), 1 million square feet of commercial and retail space, a school site and cultural, community and public open space.

Aidan Williams, Chairman of NAMA, said:

“2020 was a year of significant milestones for NAMA. Notwithstanding the difficulties brought about by Covid-19, we redeemed the last of the remaining subordinated debt and our private equity obligations and were therefore in a position to complete the first payment of €2 billion from our lifetime surplus to the Exchequer. This significant payment was made at a critical time for the country and has materially reduced the level of Government borrowing required during the Covid crisis. On behalf of the NAMA board, I thank the staff of NAMA for their continued resilience and commitment as we navigate our way through the current crisis and the final phase of NAMA’s work”

Brendan McDonagh, Chief Executive, said: “2020 brought many unexpected challenges but we continue to work towards achieving our strategic objectives, particularly regarding the funding and facilitating of residential development and the completion of our work in the Dublin Docklands SDZ. Importantly, a significant objective for NAMA concluded in December 2020 with the securing of consortium partners for the development of the Poolbeg West SDZ. Alongside this, with €900m cash generated, we will have a profitable 2020 which will enable us to make another substantial €1 billion surplus payment to the Exchequer during 2021.”

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