This article by Eamonn Loughrey, Partner DPP Belfast, first appeared in the Belfast Telegraph on 2 August 2011.

NAMA was created by the Irish government to acquire and manage loans from struggling Irish banks but it is only now, with the publication of NAMA’s first Annual Report, that we get an insight into the properties under its control in Northern Ireland.  With NAMA now controlling £3.5 billion of the property assets in the north, more than anyone else here, what it decides to do next will be crucial as NAMA stretches well beyond the housing market.  The whole property sector in terms of office, retail, hotel and leisure development is affected by NAMA.

NAMA was set up with great speed and, at the time, with much acclaim.  It was viewed as creating certainty.  However, it has not yet lived up to its early positive perception.  It and the banks have acted slowly and it is the speed of the recovery that is causing the greatest difficulty for the property industry.  Many of the property companies that have gone bust in the last few months have been highly successful and well run businesses, but nothing could have prepared them for the depth and length of the downturn in the property industry.

Whilst a ‘fire sale’ of NI properties is not on the cards right now, this should not end the debate.  In the south, the second major auction by Allsop Space in Dublin at the start of July raised €16m with 95% of properties sold, many to cash buyers.   NAMA is under pressure to follow the Allsop experiment and carry out an open and transparent sale.  Looking at the list of properties in NI, some are simply too big for cash buyers, but there is perhaps 30-40% that could be cash bought or partially funded.  Whilst selling these properties at auction is a risk, it would help set the base of the market.  Moreover, the money generated from these sales could stimulate and breathe some life into the property sector, restoring both buyers and sellers confidence.

Whilst NAMA decides what it will do with the Northern Ireland properties, now is the time to set out clear and strategic steps to support the property sector and get the market moving again.

Eamonn Loughrey is a partner in the Belfast office of independent planning consultancy DPP.