After much criticism and time to gather its thoughts on the subject and muster its forces, Irish property lender NAMA is moving in on developers to recoup billions of pounds in outstanding commercial property loans from those who Chairman Frank Daly says are ‘not taking it seriously’ when it comes to their repayments. The result will be a flood of sales of commercial property onto the London market that, in such volumes, could risk destabilising the marginal recovery that has been seen recently.
First on the hit list are prime sites in Canary Wharf, Leicester Square and Shoreditch, but many more are expected to follow. As well as existing properties, some new commercial property developments will also be in the firing line, with Ray Grehan’s planned new 67-storey tower in the Docklands being one of the first to fall, though there will certainly be much interest in this site.
Around one third of NAMA’s £14bn stock is in the UK, and the announcement that foreclosures had started would not have been too much of a surprise due to the comments NAMA Chief Executive Brendan McDonagh made in his interview with the Financial Times recently when he said that he wanted to push through at least £2.2bn of commercial property sales over the next few years.
Throughout the last decade the Irish have been giving cash-rich Arabs and Russians a run for their money on the acquisition of key commercial property in London, among the properties are Hamleys, Tiffany’s, numerous tower blocks in Docklands, the Goldman Sachs headquarters, Claridges and the Berkeley Hotel. Now, with the market in a very different place, NAMA are set to potentially put around ten of these developers into administration unless they put their business hats on and come up with realistic plans for their commercial property debts.
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