Real estate

New Irish agency proposed to acquire and finish developments

July 31, 2009 - The Construction Industry Federation (CIF) in Ireland has begun consulting its members on the draft legislation for the establishment of the National Asset Management Agency. This is according to the state broadcaster RTE.

The federation, which represents developers, said it will respond once the deliberations have ended.

The proposed legislation, which will be debated by the Irish parliament the Dáil in September, proposes to allow the agency to sell, retain or finish property assets that it takes over, as part of its mission to clean up the balance sheets of the banks.

NAMA will have the power to borrow up to €10bn to finish uncompleted developments that it acquires. In their initial response opposition parties have been critical of the whole concept. But the debate between the opposition and the government will continue as to whether NAMA the solution to the banking crisis or simply a bad idea. Two-thirds of the properties that will be acquired by NAMA will be in Ireland. The bulk of the overseas assets are in Britain.

The CIF says it is imperative that NAMA is up and running quickly to clear the logjam in the banking system. The Irish Bankers' Federation has welcomed the new legislation. It said the model used for NAMA had been rolled-out successfully in other countries.