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Nama to take on loans of 20 per cent of Irish hotels
21 March 2010 By Ian Kehoe
The National Asset Management Agency (Nama) is set to take on the loans of more than 200 hotels, making it the banker to more than one fifth of all hotels in Ireland.
The properties will range from small rural hotels to five-star properties, including the Shelbourne Hotel in Dublin. Loans froma number of hotels chains will also be transferred to Nama,which is expected to establish a separate division to deal with hotels. Internal estimates state that the Irish banks will transfer the loans of between 200 and 220 hotels to Nama. However, Nama officials stressed that they would have no formal role in the running of the hotels, unless the owner fell into arrears. In cases where a lender is in arrears, the agency will then make a decision on whether to keep the hotel open or close it down.
The agency has commissioned an assessment of the Irish hotel market in an effort to decide how to manage the hotel and leisure-related loans that are transferred to the agency. The Nama review is expected to highlight areas where there is a significant oversupply of hotels, and will make recommendations about which hotels should be supported in the long term.
Industry insiders believe banks have already taken ownership of up to 100 hotels around the country.The Irish Hotels Federation estimates there is excess capacity of up to 15,000 bedrooms in the hotel sector. It said the overcapacity was caused by the addition of 27,000 new hotel bedrooms between 1999 and 2008, which brought bedroom numbers to 60,000.
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