Ireland’s attempts to ringfence bad real estate loans is being aided by the rebound in UK asset prices. The government set up a vehicle called NAMA for the purpose, and it’s now set this month to start buying up EUR 80m in real estate loans. Many of those loans, it turns out, were to projects just across the water, where a recovery of sorts seems to be underway. The timing couldn’t have been better, reports Business Week.
As Ireland takes its biggest financial gamble since winning independence from Britain almost nine decades ago, a rebound in the U.K. real estate market has become the unlikely source of a boost to the value of loans included in the rescue package.
Prices for commercial properties rose a record 8.1 percent in the U.K. in the fourth quarter from the previous three months, according to Investment Property Databank Ltd, a research company based in London. Irish prices fell 4.9 percent over the same period, it said.