PRESENTATION DELEVERAGING NAMA IN A COMPLEX GLOBAL ECONOMIC ENVIRONMENT - THE BIG PICTURE O?^1March 2016 Brendan McDonagh. CEO NAMA National Asset Management Agency www.nama.ie NAMA Evolving focus Valuation and transfer of €74bn in par debt loans and initial engagement with debtors A 2010 o K O Extracting as much value as possible from the acquired loans that cost €31.8bn NAMA Established and successful work-out platform Starting-up an organisation to manage a €74bn par debt loan portfolio - NAMA had to be established quickly from scratch Acquiring €74bn of loans - substantial and complex challenge of dealing with 780 debtor connections which represented over 5,000 borrowing entitles and 60.000 property units Securum of Sweden was only €6bn Creating a platform to manage debtors and properties - early stage (mid 2010 - mid 2012) decisive approach to portfolio strategic assessment (i.e. via debtor business plan review process), ensuing restructuring and strategy implementation laid the platform for future success Leading an innovative and responsive staff and business model - breadth and depth of solutions required Stimulating and exploiting market recovery - different experiences in different territories and asset classes. V NaBoiwl Aitet Harugwramt Agency WWW.nama ie NAMA Injecting liquidity to Irish Banking System N A M A - € 3 2 b n - could only ever solve part of the estim ated €1 OObn liquidity lost by banking system since 2 0 0 8 In 2 0 0 8 -2 0 1 0 EC B w as not very accom m odative - ELA w as not liked NttkmiAJset Agency 2010-2015 What way is the market going? ?has month's homes muting in ma.- me last month's Mums mung mm may mm I mum?? mum.? ECB Reference Rate versus 5 Year Euro Swap Rate NAMA Acquired Assets from PIS and Executed Balmme She-(rt IN 2010 Harm-1m ?lf?l?x?ft? Am N A M A 2 0 1 0 - a year of transition Acquired a portfolio of over €71 bn nominal in loans from the five participating institutions for just over €30bn (an additional €2.8bn acquired in 2011).The first loan transfers occurred on the 29th March 2010 Engagement commenced with 780 debtors and the 12,000 loans (secured by 60,000 properties) acquired Little information on the underlying collateral from the participating institutions Foreign currency exposure in excess of €10bn was successfully hedged into Euro in difficult market conditions (remember Icelandic ash cloud and Ireland heading into Troika programme!) A€250m prudential liquidity buffer was put in place. A€2.5bn ECP Programme was established and listed on the Irish Stock Exchange NAMA absorbed losses arising from the impact of the 25%-30% decline in Irish property values which took place post acquisition right up to the end of 2013 Liquidity in the Irish commercial and residential property market dried up completely. Meanwhile in NAMA Euro Interest Yield Wm nama.le NAMA 2011 - active loan sales process launched By end Q1/2011 NAMA had a much better sense of the property portfolio acquired Lots of visitors willing to help - NAMA or themselves? Transfers in 2011 took place in two phases: a transfer of €1.1 bn in March (loans which were deemed eligible by AIB in late 2010) and a transfer of €1.7bn in October In 2011. NAMA approved asset disposals in excess of €5.6bn NAMA launched an active loan sales process in 2011- enabling it to monetise its loan portfolio and thereby reduce its balance sheet Dreadful August 2011 - Interest rates soar to high levels - Irish 10 year 15%, Riots in London. Kitioiu! Amt MiruLRment Afetcy * Euro area sovereign debt crisis drove interest rates down 2 I 4 ! > * » . . r j KitiooilAitet Mjmvgfmenr A$«tcy 31 y v »r t*» w t jt Tit 7h -M V\ 2011 Interest rate curve NAMA 2 0 1 2 - encouraging signs of recovery By end-2012 the Irish property market showed encouraging signs of recovery, the Exchequer finances improved, Ireland was taking first steps back into the sovereign debt markets 64% of cash receipts in 2012 were generated by property sales. 80% of those sales relate to Britain, reflecting in particular, the strength of the London market at that time and the quality of NAMA’s asset The Irish market suffered further price declines in 2012 - fifth year in succession To support the recovery of the Irish market, NAMA introduced a number of new initiatives to help support sustainable recovery, these included a vendor finance initiative Government reduced stamp duty, CGT exemptions. Euro Interest Yield 2012 - rates go lower - Draghi Effect - we expected good times ahead for NAMA 2012 Weak recovery in the US. ongoing Euro Debt crisis and political uncertainty drove interest rates further down ?J. irt Interest rate curve 2013 - landm ark year for Ireland and N A M A Exit from the Troika and return to long-term sovereign bond markets NAMA’s first major debt redemption milestone - the repayment of a cumulative €7.5bn by end-year NAMA made a substantial contribution to the resurgence of activity in the Irish property market 2011/12 strategies of only selling €1bn in Ireland proved - strategically and commercially sensible IBRC - Feb 2013 - NAMA directed by the Minister to acquire any loans left unsold by the Special Liquidators (ultimately NAMA involvement not required as SL sold all IBRC loans to the market) In the first half of 2013, NAMA completed its first major Irish loan portfolio to Starwood - €800m par debt portfolio (Project Aspen) - NAMA’s first JV as we take 20% equity stake NAMA starts Portfolio sales of Property Launch of Irish REIT market - Green REIT July 2013 and Hibernia December 2013. National Afe«e( Munafrastttt Atency www.nama -3 Euro Interest Yield 2 0 1 3 - rates increase 5 0 -7 5 bps (1 Oyr) L!H J3 ECB cut reference rate fu rth e r and FED considers phasing out of QE resulting in a steepening of the yield curve lit NaboiuI Ajwet Muugcment Agency * 4f E* V» 2013 Interest rate curve NAMA 2 0 1 4 /1 5 - strong recovery of the Irish m arket NAMA passed its half-way point in repaying Senior Bonds in 2014 with a further €5.5bn in 2015 Strong recovery of the Irish market - yields for certain assets reverted towards pre-crisis level Meeting investor demand - major asset portfolio sale and a major upsurge in loan sales Market for Irish loan and asset portfolio sales was buoyant throughout 2014 and 2015 In 2014 portfolio and loan sales accounted for 63% of Irish sales and 59% of total sales by NAMA Estimated that over €22bn of loans were sold by Irish vendors including NAMA in 2014, €24bn in 2015 The billions invested in the Irish commercial property market and in Irish loan portfolios in 2014/15 reduced substantially the contingent liability of Irish taxpayers and to IBRC and to NAMA - from €43bn at the start of 2013 to €8bn today. Natfcxul Asset KinijmemA$wcy Euro Interest Yield 2014 - Weakness in European core countries results in 10yr rates falling 130bps WPjR>4*K(UMr D/3_!« mJV* Economic weakness in. euro area core countries weighed on markets with expectation that an ECB QE program would be announced 2014 Interest rate curve 1 > f *Jn C. t» v I Mt / •IH •l!% * iu it . *16 tatkxul Attet Mjaajnnrot A$wey 7i i eV n iff IF St jjt \*t n ivr ix www.nama.'s* Euro Interest Yield 2 0 1 5 - ECB QE program announced January 2015, deposit facility rate cut by 10bps to -0.30% , asset purchase program extended to M ar’17 in December w , onvr am'U 2015 ECB announces QE program, bond yields decline as QE effect kicks in - search for yield ,*t 17 HitlOMlASM! Afwtcy n Interest rate curve NAMA Overview mm? Am! mmnamala Management Agncy Summary Cash Flow - NAMA Summ ary Cash Flow - NAMA 2010 2011 2012 2013 2014 YTD 31 Doc 2015 From Inception Cm_________ Cm_________ Cm_________ Cm_________ Cm_________ Cm _______ Cm, Opening Cash & Cash Equivalents 837 3,847 3,644 4,006 1r849 Inflows Disposal Receipts 431 3,726 3,041 3,672 7,757 8,532 27,159 Non Disposal Income 363 1,242 1,210 792 809 617 5,033 Other 220 117 254 16 (4) *61' 543 1,014 5,085 4,505 4,480 8,562 9.088 32,734 - (1,250) (3,500) (2,750) (9,100) (5,500) (22,100) FX & Debt Servicing Costs (net) 112 (378) (745) (567) (546) (875) (2,999) Operating Costs (49) (143) (155) (179) (171) (828) Capital Drawdowns, New Loans acquired and Vendor Finance (240) (304) (308) (131) (672) (892) (994) (3,411) Net Outflows (177) (2,075) (4,708) (4,119) (10,717) (7,540) (29,337) 837 3,847 3,644 4,00S Outflows Bond Redemption - Existing NAMA book Total Cash, Liquid asaeta & Collateral balance , 1,849_______ 3,397_______ 3,397 Senior Bond Repayments 2 Years Ahead Of Schedule NAMA Senior Bond Redemptions €bn €b Actual Redemptions (LHS Axis) Forecast Remaining 2015 Redemptions (In Tine with NAMA 2015 Budget) (LHS Axis) •Cummulath/e Planned Redemptions to end 2016 {In line with 2014 strategy) (RHS Axis) ' Cummulative Residual Planned Redemptions (Post 2016) (RHS Axis) 3.00 0.00 2011 3 National Ktnagement Agency 2012 2013 2014 2015 Mar-16 YTD 2016 2017/2018 Senior Bond Repayments 2 Years Ahead Of Schedule NAMA Sensor Bond Redemptions 9.0P 8.0 0 ? nn . .uu <5.00 A n f ^ »/ 9 r Debt repaid t Oct 2015 k f paid in 2014 - more than the previous A years combined - €7 5bn Actual Redemptions (LHS Axis) Forecast Remaining 2015 Redemptions (In line with NAMA 2015 Budget) (LHS Axis] Cummulative Planned Redemptions to end 2016 (fn line with 2014 strategy) (RHS Axfe) Cummulatlve Residual Planned Redemptions (Post 2016) (RHS Axis) S.QO L.0P Well on the way towards meeting next major milestone - the redemption of a cumulative 80% of Senior Bonds by end2016 2013 2015 Mar-16 YTD 2016 2D17/7018 NAMA retains diverse portfolio interests €9.6bn as at 31/12/2015 G eographical and sectoral diversity ■ London (1.6) 16% Rest of ROI (2.1)21% Dublin (4.7) 50% ■ Rest of UK (incl Nl) (0.5) 5% . Rest of World (0.6) 7% . NRE (0.1)1% London 1 Rest of UK 31 December 2015: Projected Disposal Proceeds (€9.7bn) National Asset Management Agency Dublin " Rest of ROI ROW Non Real Estate Assets Ireland by County Urban Centric - €6.8bn as at 31/12/2015 Remaining Portfolio €bn Rest of ROl Dublin (4.698) • 70% Cork Kildare Galway Meath Wicklow Limerick Sligo Laois Louth Donegal Wexford Westmeath Cavan Roscommon Kerry Waterford Clare Tipperary Mayo Cariow Kilkenny Leitrim Offaly Monaghan Longford -- -----------€0 23 Nation*] Mimgeirwnt Agency €100 €200 €300 €400 €500 €600 €700 NAMA Development Funding - ?mm AM Hansen-m Agency The Dublin Docklands SDZ Background May 201,41 May 2014 -SDZ Planning Scheme approved. NAMA has interest in 75% o f 22 hectares of developable lands. July 2014 - Minister for Finance, launching NAMA Section 227 Review, referred to the Docklands Area and NAMA’s role. September 2014 - NAMA Board approves Docklands Business Plan (DBP) and Docklands delivery team is established in NAMA. Scale of opportunity exemplified by estimate that up to 3.8m sq. ft. of commercial space and 2,000 apartments could be delivered in all sites. This includes one additional site at City Quay Gust outside the SDZ). Double the size of original IFSC, 25 M t U O f u lA t t e t Muugtnwnt Agency a gca c * I II 8 I t I £ f *1 1 I I I I fll Sill!!!! ®0 * !x 3! !i s a! 5 * © 0 ®(D(D(D(§> TJ S £ 2 ° o Q .© £ fc > c ° = a) _Q -t; 3 " Q < a> 4 CD «N The Dublin Docklands SDZ Planning and construction overview Pre-pJanrung - 1,266,156 sq ft 11,266,156 s q .ft Commercial Planning submitted - (not yet granted) - 366.673 1,168 Residential Units ■ 366,673 s q .ft Commerciar Planning granted (not u 285 Residential Units** ■ 931,076 sq.ft. Commercial • Gly Quay ■ 226 Residential Units • EXO Building Point VAllage 4169 Bedroom Hotel • Wiodonide - SJock 5 Construction commenced - 1,333,892 sq.ft. 1,333,892 sq.ft. Commercial 1332 Residential Units 8 Hanover Quay Bolaml's Quay - demolition works Capital Dock - prolrmtnary wo/ks ' Including City Quay 5 Hanover Quay ** Including 285 residential unit equivalent m the form of student accommodation Prcvect Wave - Phase 1 SECTION 4 Residential Delivery Division N a tio n a l A w e t M a n a g e m e n t A #*ncy www.nama.ie How did we get here? Early 2014 Board approved strategy to finance the construction of 4 ,5 0 0 houses/apartm ents in G reater Dublin A rea over 3-Y ear Period (2 0 1 4 -2 0 1 6 ) March 2015 Board strategy meeting - general bias towards longer term involvem ent in residential property delivery. A cknow ledgem ent that an orderly exit of Irish land portfolio at e n d -2 0 1 6 w as probably not likely particularly given prevailing m arket difficulties October 2015 Establishm ent of the Residential Delivery Division November 2015 Approval by the Board o f the N A M A Residential Delivery Business Plan. NAMA Funded Residential Delivery in the Greater Dublin Area June 2 0 1 4 to Feb 2 0 1 6 Units 20,000 ■ Planning Applications to be lodged w ithin 1 2 months Planning Lodged Planning Granted ■ Under Construction i Completed A* s? * & A^ Cf ^ ^ < d5‘ d?' d)' c5, d^ — Approvals ——Drawdowns Graphic Source: G oodbody 30 National Atttt Waatfemem Agency www.nama.ie However, cause for optimism! N ew Z e a la n d ’s Introduced prudential rules in O ctober 2 0 1 3 and their experience suggest that buyers becom e accustom ed to saving for higher deposits BPFI figures show averag e m ortgage approvals rising, driving buying power Davy consider impact of m ortgage rules ‘overblown’ M ortgage m arket growth anticipated in 2 0 1 6 (est. €5b n , up from € 4 .5 b n in 2015) Prices continue to recover - mainly com m uter belt and cities ex Dublin ........All points to enhanced viability in the foreseeable future. KAtjocui Amh M4»*feineni Agency WWW.nania.ie Residential Business Plan Conclusions M ajor turning point in N A M A ’s evolution Assessm ent: 1 3 ,2 0 0 units currently com m ercially viable - 6 6 % of 2 0 ,0 0 0 target Landbank potentially consisting o f alm ost 5 6 ,0 0 0 units nationwide € 5 .6 b n capital expenditure program m e P eak funding of € 1 .8 b n - should not impact N A M A bond redemption trajectory Viability thresholds essential - for Profitability Hatton*! Asset and S tate Aid issues. NAMA mama] Ant! Management mics: Commitment to accelerate deleveraging activity, meeting market demand and redeeming at least 80% of Senior Debt i.e. €24bn by end 2016 NAMA is profitable NAMA will continue to satisfy substantial international and domestic investor demand by way of portfolio sales at appropriate scale Contingent liability to the State is significantly diminished - currently €8bn from a potential €43bn at time of IBRC’s liquidation in February 2013 NAMA’s dual strategy of supplying the market with high quality office and residential property overtime enhances the value of the residual portfolio Over 90% of NAMA’s Irish assets are in Dublin, commuter belt and major cities. S41(1)(a), S36(1), S30(1)(c) NAMA - Projected Staff numbers 2016-2020 (1 >(a). S36(1). S30.1KC Kattoiud Atset MftBi*rrueni cy R e d u c in g Ire la n d ’s € 3 0 b n N A M A c o n tin g e n t lia b ility According to M oody’s latest research 0 c t-2 0 1 5 : N A M A is no longer a material contingent liability for the Irish governm ent N A M A will produce a profit for the Irish state w hen wound down N A M A is the most advanced of the three largest European “bad banks” in selling its assets N A M A ’s strong cash flows allows for accelerated debt reduction. 42 Ntttonii Ajoer fcUtwgement Ajency Existing NAMA Commitments Unaffected Subject to current m arket conditions prevailing By 2018 1st March 2020 €2 bn all senior debt repaid Subordinated debt repaid potential upper-range terminal surplus PRESENTATION DELEVERAGING NAMA IN A COMPLEX GLOBAL ECONOMIC ENVIRONMENT - THE BIG PICTURE 09th March 2016 i Brendan McDonagh CEO NAMA National Asset Management Agency www.nama.ie Eastdil Secured: The Heal Estate Investment Banking Company Eastdil Secured is one of the foremost providers of financial advisory services to real estate owners. Eastdil Secured combines superior capital markets expertise with a deep understanding of real estate fundamentals to execute a wide range oftransactionsfor our clients. EASTDIL SECURED Wow, W hat a Start to the Year! Global Equity Markets Other Key Benchmarks Change 1 Change RMZ REIT Index (1.2%) WTI Crude Oil (Barrel) (6.4%) S&P 500 (3.2%) 10 Yr US Treasuries Yield 42 bps Stoxx 50 (7.8%) VIX Index Nikkei 225 (10.9%) Shanghai Composite (19.2%) Source: Bloomberg as o f 03 March 2016 6.6% “ Where’s the Recession? Building Permits New Mfg. Orders* Capital Goods Orders** Job Openings S&P 500 Index Consumer Spending Initial Jobless Claims* -15 "In s titu te fo r Supply Manangement Index •"Excluding defense and aircraft •**Ch a nge i n 4 week movi ng avg. Source: Bloomberg I Avg. for first 3 mos. of last 5 recessions I Latest 3-Mo. Change = Current volatility may give some pause, but... = The U.S. &Western Europe continues to be a key market for Global Investors - creating a strong bid in top markets for larger & iconic assets - and a growing bid for yield. = Pricing is beyond 2007 peak in primary assets/markets, but decent relative to other asset classes. = Properties with rollover/vacancy are pricing well given improving fundamentals and transitional debt, but this is the area to watch if the world continues in a “risk off” mode. = Volatility could drive further CRE investments. = Financing globally very attractive with limited sign of overextending. = Fundamentals solid = Limited supply, no immediate signs of overbuilding. = CIO must get money to work and CRE is attractive. CRE Capital Market Questions Today = Will the Central Banks be more influenced by the financial markets or the economy? = Given mark to market in publicly traded asset classes, are investors better off in less liquid, higher returning assets? = If the world financial markets have become more dependent on QE for stability, would investors rather own financial assets or real assets? = Where can investors find yield with stability? Concerns = 2 5 % o f w orld e c o n o m y no w m a n a g e d by central b an ks w ith a n e g a tiv e in terest rate policy = A re public equ ity m a rk e ts signaling a C R E correction? = A re oil prices and th e high yield bond m a rk e t indicating a recessio n on th e n e a r term horizon? = W h a t a re th e im p acts o f grow ing regulatio n? = W ill su s ta in e d low oil prices c a u s e M id d le E a s te rn investors to retren ch ? = C o uld / A re th e C h in e s e g o v e rn m e n t limit outflow s to help m a n a g e th eir curren cy? = W e a re a long w a y into this reco very What Typically Ends CRE Cycle? Yes O v e r S u p p ly O v e r L e v e ra g e B a n k in g C r i s i s G lo b a l F i n a n c ia l C r i s i s M a te ria l R e c e s s i o n No Maybe S S S S Dublin Core Office & Retail Value 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 200S 2009 2010 2011 2012 2013 2014 2015 Reasons Ireland Remains Attracted Ireland: Continues to be relevant and remain a prime destination for capital across the risk spectrum (Core/Core+/Development/Distressed) Italy: The largest banks have opted to sell unsecured portfolios or servicer operations limiting their upfront losses but also frustrating capital that wants to deploy. Spain: Recent very large / high profile aborted processes will likely equates to lower volumes and smaller ticket sizes for 2016, with less buyer confidence in the certainty of the processes being run. Greece: Legal uncertainty over enforcement, the ability to sell assets and the projected continuation of a decline for the next two years will limit activity in 2016. Netherlands: Big focus for groups at the start of 2016 due to sale of Propertize, the €5.5 billion Dutch bad bank. Portugal: Continued transaction flow from local and international banks but limited attention globally given the limited scope and scale. Central and Eastern Europe: Many opportunistic groups have spent time in CEE, with most being frustrated by the lack of transparency, relatively small lot sizes and legal jurisdiction uncertainty. NAMA = Patient and Clever Approach to Recovery - Selling into Liquidity = NAMA Bonds / Senior Debt = Ingenious Structure and Profit Participations = Market Confidence in Open and Transparent Processes = Consistent Behaviour and Messaging from Senior Leadership = The New Model for Global Deleveraging = Ireland is the fastest growing economy in Europe, growing by 6.7% in 2015 (ESRI forecast). = Dublin contains a unique concentration of technology, healthcare, research, finance and innovation found nowhere else in the world. = The city is recognised as one of Europe’s top 24-hour cities to work and live. = Due to a young, highly qualified and productive workforce along with its attractiveness as a political and cultural hub it is the chosen headquarter location for many multi-national companies. = This combined with low corporation tax, the fastest growing GDP in Europe and a significant rental growth forecast positions Dublin as and ideal investment location. Young, Well-Educated and Growing = Dublin’s population increased by 4.9% between 2004 and 2015 and 40.9% of Dublin’s inhabitants are under 30 years old. European Countries Population Under 35 Years Old 0.0% Ireland = The population of the greater Dublin area is projected to increase by 22.0% over the next 15 years, and is forecasted to continue to grow by a further 400,000 by 2031. = Ireland has a higher percentage of population under 35 than any other European country. 20.0% 40.0% 60.0% Impressive Educational Achievements = The Government's strong focus on investment in education has helped secure Dublin's reputation as a highly attractive location: - 20% increase in applicants to third level science, technology, engineering and maths subjects. - 22% increase in third level science as 1st preference. - 31% increase in third level computing as 1st preference. - 20% increase in third level engineering as 1st preference. = m Dublin, the proportion of persons over 15 years old with a higher level education is 35.0%. Competitive Advantage Since the Global Financial Crisis, Ireland has emerged with many competitive advantages over other EU countries. = Since 2008, Dublin's cost of living has improved compared to the EU. This has been driven by higher productivity and efficiency combined with falling business, labour, services and property costs. = Residential property prices are 38.0% lower than at their peak levels in February 2007. = Dublin is ranked 15th in the IMD World Competitiveness Yearbook, rising 9 places since the last survey. Outstanding Productivity = Ireland is one of the most productive economies in the EU. = Productivity levels are greater than 40 points above the EU baseline. = Improvements in productivity combined with decreasing nominal labour costs have led to a 20.0% improvement in unit labour costs compared to the EU. = Since 2008, Irish labour costs have remained stable compared to a 7.0% increase in the EU (IDA). Thriving Dublin Economy = The Dublin economy has rapidly shifted from contraction to growth and continues to outperform expectations. = The macroeconomic recovery has been one of the most robust in Europe. = Ireland’s membership in the EU allows free trade between other member states, and the country benefits from being a euro currency economy. = In addition, Exchequer returns for January show tax revenues increased by more than 7.0% when compared with the same month last year. GDP Growth Ahead O f European Average Ireland’s GDP grew by 6.7% in 2015 (ESRI) and is projected to grow by 4.5% in 2016 and by 3.5% in 2017 (EC projections) The growth forecast is significantly higher than both the European average of 1.5% and the UK average of 2.7%. Strongest Job Growth in the EU = Ireland has benefitted through strong job growth, significantly above that experienced by other EU countries throughout 2015, with job growth of approximately 3.0% per annum. = The unemployment rate has decreased by more than 4.0% over the past two years and now stands at 8.6% (CSO). = Half of the jobs created in Ireland over the last two years have been located in Dublin. 3.0% 2.0% 1.0% 0.0% .-----T u -1.0% I £ -2.0% International Market Environment = Dublin h as con tinuously a ttra cte d intern ational in v e s tm e n t th ro u g h o u t re c e n t ye a rs , w ith th e in v e s tm e n t v o lu m e no w significantly e x c e e d in g o th e r cou ntries such as th e UK , G e rm a n y and F ran c e. = Ireland reco rd ed u p w ard s o f $ 8 6 billion o f intern ational in v e s tm e n t th ro u g h o u t 2 0 1 4 . = T h is in v e s tm e n t w a s c o n c e n tra te d aro u n d n u m ero u s secto rs, including ICT, construction, b u sin ess and m an u factu rin g . = A s a result, this h as h elp ed to g e n e ra te su s ta in e d jo b grow th w ithin th e Irish e c o n o m y and e n s u re it re m a in s E u ro p e ’s m ost p ro sp ero u s econom y. = Ireland w a s ran ked 13th out o f 1 8 9 cou ntries for e a s e o f doing business in 2 0 1 5 , fo u r p la c e s h ig h er th an th e previous y e a r (W orld B ank). International Market Environment (Continued) Case Study: Google = Google initially set up an office in Dublin with five employees in 2003. = Today, they employ more than 2,500 people from 65 different countries, which makes Dublin Google's largest operation outside of the US. = In the last 3 years, Google has spent €280 million for office space and now occupies approximately 650,000 square feet. Investment Volum es ($000's) Germany France United Kingdom ^ " Ire la n d Europe’s Silicon Valley = Dublin is c o n sid ered th e in tern et capital o f E u ro p e w ith m a n y m ulti­ national c o m p a n ie s ’ E M E A h e a d q u a rte rs lo cated in th e city. = U S c o m p a n ie s invested heavily in Irelan d since 1 9 9 0 . S o m e e s tim a te s put th e fig u re as high as $ 2 7 7 b n billion, e q u iv a le n t to th e a m o u n t in vested in all d ev elo p in g A s ia n cou ntries o v e r th e s a m e period. = Further, th e city h as th e highest n u m b e r o f s q u a re fe e t o ccu p ied by th e 13 la rg est N A S D A Q co m p a n ie s . = Dublin is E u ro p e ’s fa s te s t grow ing city for d a ta c e n tre o p e ra to rs with in ve s tm en ts from leading te ch n o lo g y firm s such as M icroso ft and A m azon. = Ire la n d ’s fa v o u ra b le corpo ration ta x o f 1 2 .5 % h as reinfo rced th e a p p e a l of th e city as an ideal b u sin ess h e a d q u a rte r location. Europe’s Silicon Valley (Continued) b w ib b e r # Google Linked Q3 sales/orce E A S T D IL SE CU R E D Europe’s Silicon Valley (Continued) European headquarter location for more than 1,150 international companies. More than 50.0% of the world’s leading financial services firms have offices in Dublin. 9 out of the 10 top global ICT companies have an office in the city. 2.5 M SF 2.0 M SF 1.5 M SF 1.0 M SF 0.5 M SF 9 out of the 10 top global pharmaceutical companies have an office in the city. All of the top 10 “Born on the Internet” companies are located in the city 0.0 M SF ■ / / / ■ ? / S S / < / DUBLIN OVERVIEW Budnm LOddaliOH - Flexibility and Oponnoco to Foreign Adopt ability 0! Investors Workforce (1M0 mud Commnvenes?. .?upg;mg mama: lnvodmont 8m Mo. iv" Transparent Market In tho WorId 1JLL Global Truman-My ham Top Dodina?on :ngi?ro Country for oun ry Foroign Direct gash. 303?, Investment "9 (Faces: IIBH ?30m LDceIon Yuma: Facts and Bout-n EASTDIL SECURED 24 50 I EASTDIL SECURED Dublin Docklands SDZ Board Strategy Day 9th March 2016 Mary Birmingham, Head of Asset Management Nttkmil Anet ' M*n»jeroen( A«ency SDZ - Site Overview v\ . 0000000103? 'omou Cl ?WW-Pbme no 00.000000000000000"but" i . m? :2 . numnu' - . nun-u I lulnan-r canalInn-ecu 19., manequa-noun..- num- ?a '59 ?an. Commercial Sq.ft. Construction Commenced Residential Units. S41(1)(a), S36(1) 1,334,000 332 Planning Granted 931,000 226 Planning Submitted 367,000 285 Pre-Planning 1,266,000 1,168 Total 3,898,000 2,011 (1X3). S36( Forecast 201® Commercial Forecast 2016 Residential Construction a, .. Roland's Mill - Demolition Site mm . Wm 5 Hanover Quay Block 14b Status: Under Construction and Part Sale Planning Strategy: Complete Delivery Strategy: ICAV (Oaktree) > 204,000 sq.ft. Commercial > 100 Apartments Sale of residential site to Cairn Homes pic for €18m. a N e x ^ te p s 8 Hanover Quay Block 15b Status: Under Construction Planning Strategy: Complete Delivery Strategy: ICAV (Oaktree) Area: (offices) L G Next Steps 47,500 sq.ft. Britain Quay/Capital Dock Block 15a Status: Enabling Works Commenced Planning Strategy: Complete Delivery Strategy: QIAIF {Kennedy Wilson) > 447,000 sq.ft commercial > 190 apartments Next Steps S41(1)(a). S36(1), S30(1)(c) n North Wall Quay (Project Wave) Block 8 Status: Under Construction Planning Strategy: Part Complete Delivery Strategy: Agreement for Lease (Oxley) Commercial 304,000 sq.ft. (Phase 1) granted Commercial 340,000 sq.ft. (Phase 2) W V O ft '-.t r e e ; i. £ r> ~ 7 " $ U 2 f Residential 315 Units (Phase 2/3) i Next Steps S41(1)(a), S36(1), S30(1 )(c) SDZ - Sites B olan d ’S Q uay Block 17 Status: Demolition and Enabling Works Commenced Planning Strategy: Delivery Strategy: > > > > > Complete Receiver funding (Savills) Office: 309,590 sq.ft. Restaurant/cafe: 12,750 sq.ft. Cultural/exhibition 5,910 sq.ft. Retail: 2,300 sq.ft. Residential: 42 Apartments M ovt fsto n c ' EdEmcisi 68? .8855: .3: Maia: 'l?u . mcEcmE 76 Sir John Rogerson Quay Block 14a Status: Planning Granted jiu w i* Planning Strategy: Complete Delivery Strategy: ICAV (Oaktree) > 102,000 sq.ft. commercial > 61 Apartments Next Steps I *t *i NationalAstei Muugeitttrrt Agency Wintertide Block 10a Status: Planning Granted Planning Strategy: Granted Delivery Strategy: Under review (Receiver/ Sale/ JV) Area: 403,000 sq.ft. commercial. Next Steps S41(1)(a), S36(1), S30(1 )(c) Spencer Dock Block 2 and 7 Status: Planning Granted / (Part) Planning Strategy: Part Complete. Delivery Strategy: JV Partner (Galliard) selected to bid on site. > 165 apartments > 425,000 sq ft Commercial > Hotel 169 bedrooms. > Phase 2 - 184,000 sq ft Commercial, 75 Apartments Next Steps: S41(1)(a), S36(1), S30(1 )(c) Mayor Street B lock 5 Status: In Planning Planning Strategy: Planning lodged FI request received D elivery Strategy: Combined disposal o f Block 5 Lands (Wintertide, C1E and NAPM land holdings) > v v Residential: 970 bed space / 285 residential equivalent Retail: 9,160 sq.ft Community: 4,180 sq.ft. N sxl Steps r ^ ftiS2CB»J Aaart WaiMgemtTrt Exo Building, Point Village Block 10b Status: In Planning Planning Strategy: Planning lodged. FI request received Delivery Strategy: Under review (In Receivership) > 213,000 sq.ft Commercial Next Steps 1c. H*Uoaai Ajjmk Muwprment Agency 23:95! 3 g! Mayor St/New Wapping Street Block 3 Status: Masterplan Planning Strategy: Pre-planning Delivery Strategy: Under review with Receiver > C om m ercial 253,000 sq.ft. > R esidential 367 units Next Steps a). S36(1), S30(1)(c) u i a 7 North Wall Quay (Tile Style & Crosbie's Block 9 Status: Masterplan Planning Strategy: Pre-planning Delivery Strategy: Under review with Receiver Commercial: 363,000 sq.ft. Residential: Next Steps 41(1 )(a), S36(1), S30(1)(c) 261 units Dublin CBD Of?ce 20 mm Dimmer? Agency Dublin Offices Supply and Demand > 3m sq.ft. take-up in Dublin offices in 2015 > 1.6m sq ft take-up in CBD* in 2015 Potential Net Projected Increase in CBD Office Stock. Year Area sq.ft (similar to 2014) > Grade A vacancy rate CDB <5% 2016 +500k > > Active requirements - 4.1m sq ft Onsite 31 schem es- 2.1m sq ft (uncommitted) 2017 +725k > First Mover Advantage 2018 +3m 2019 +3m • CBD is D1.D2 and D4 Source: Savills Contingent on funding, pre-lets, market risks. Existing Occupiers in Dublin Docklands ifi& M ®*nc Ceannals na htireann Central Bank of Ireland Vumyabm A&.LGoodbody Q G o ■■■ g 'e & o ^ n b „ St a t e St r e e t - 11 12 p u/c 10 WILLIAMFRY IR > accenture 14 hsbcp CAPITA y a h o ^ E B 18 21 tripadvisor® th e c o n v e n t i o n C E N T R E D U B L IN facebook o / LogMe© ancestnr Bloomberg 23 Revised Apartment union-1 use! inn-9mm Apartment Standards - Example A DCC Development Plan 2011-2017 Cores Key Figures: Total No of Units: No of Cores: % Dual Aspect: Average Unit Size: Apartment Standards - Example B New Guidelines Cores Key Figures: Total No of Units: No of Cores: % Dual Aspect: Average Unit size: 252 6 54% 79 sq m Misnomer: In terms of minimum size of a 1 bed apartment in reality it will be closer to 50 sq m rather that 45 sq.m within the new guidelines. r v f -x; - Kitfcm*! AlHt Mintfemenf Agency Apartment Standards Impact on Viability/Delivery > More apartments built on the same footprint. > More units per core results in improved cost effectiveness. > Net:Gross ratio improvements. > A reduction in cost per apartment is achieved. > Apartment development moves from marginal to viable. Dublin Docklands SDZ Key Activities 2016 41(1 )(a). S36(1), S30(1)(c) ■y-1 ^1 Kabotul AM€ft Maurw#menf hfcncy National Asset Management Agency Board S tra teg y A w a y Day - 9 M a rc h 2016 Downsizing and Cost Management The price of doing the some old thing isfar higher than the price of change" \v National Asset Management Agency CD £ 2 c < 2^ ro --M c "a C ro rH o c ™ CL M" o % TO CD co TO ■“ 1 ro CD II c CD £: co O CJ to 00 1 § u mo C CD E JD _CD 4-) ru CO CD to C CD 'a o Introduction c — o — bJD c »- co ’F ° c rsl TO (D Q JO C QJ C 1O — co *-* £ ■co — ■C O CO CO CD QJ i— 4- J 03 CD kl c t•— Q j;_ ■— 3 'a o J ^ TJ eto cd PJ .E £ c 2 E E S> ro > 13 r: ® c3 8 (U ClO qj CL) e TO j= "O f5 1 * c ^o .E _ ■° CD JC I- m "5 p CL! * r -Q 5 NAMA's changing business model NAMA currently has 3 core businesses: Deleveraging, RD, Docklands/SDZ RD & SDZ/Docklands businesses are being scaled up and staffed up fo r 2016-2020 delivery tim efram e. This w ill be NAMA's prim ary focus from 2017 While the deleveraging business is nearing com pletion, there w ill be a num ber of deleveraging connections remaining in 2017, not form ing part o f loan sale: • Active connections where there is a compelling alternative strategy, e.g. litigation which w ill deliver significant incremental value to NAMA; and • Residual "NRE" connections (i.e. no remaining collateral) being closed out The number o f connections and related workload is currently unknown (current best estimate: in or around ^ a c t iv e connections and "N R E " connections) Assume overall reduced business requirement in 2017 as NAMA's original "raison d'etre" deleveraging business is nearing completion s NAMA deleveraging journey Deleveraging Annual Cash Generation €'bn 10 8 7 Assume 88% senior bonds redeemed by end-2016 (per NAMA 2016— budget) 6 2010 2011 2012 2013 2014 ^ P r o je c te d (based on NAMA 2016 budget) 2015 2016 — Actuals 2017 Significant change in scale of NAMA's loan portfoliohowever, RD/SDZ businesses are highly complex Residential Delivery Deleveraging Docklands/SDZ 2016* End-2016 projection as per NAMA 2016 Budget National Asset Management Agency Downsizing explained Downsizing means adjusting an organisation?s infrastructure and cost base to best fit the underlying business environment and reduced business requirement, including inter alia: Governance and 0 Policies procedures control framework - IT systems - Business processes - Organisational structure (frontline and support) - Management team Any downsizing actions headcount reduction) should follow on from careful consideration of what is the underlying business requirement and ensuing required organisation infrastructure 8 National Asset I Management Agency & r r o c o +-» CO CD D cr co 4-* CO 3 * 4-* o c CO •4-> • • > . r— “D CD C c 03 CL Q or o 4-» t 03 ■M in cn it CD < 4-J <4CO M— oi— O CL) X M— •— CO E c ■*-* 03 JZ +-* CM UBO i_ •M k_ CD (D JZ 4-» _d i_ 4— 1 Z3 <4— c CD ro 4-> E c o ■ LO CO -• E CO o i_ 4-J CD TJ _Q CD E 0) D 2 C k. 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