Smart, Ballsy, Foreign

at

saturday night show

They come here.

Stripping our assets with their big testicles.

The Saturday Night Show’s Brendan O’Connor spoke to Sunday Business Post financial journalist Ian Kehoe about his documentary ‘Who’s Buying Ireland?’ (Tonight RTE1. 9.35pm). The programme follows Kehoe as he meets the international ‘big players’ buying Irish assets.

Brendan O’Connor: “It’s been a good few weeks, unemployment is down kind of dramatically enough – employment is up, Moody’s are adding to penny-ugrade us in January, huge tax take in November, property seems to be kind of coming back – are things looking good, do you think?”

Ian Kehoe: “Well, I suppose, look – hands up, everyone knows that the country is still swamped in debt. You have the National Debt, people… consumer debt, bank debt – it hasn’t gone away, but the economic indicators to use those words have been very strong over the past couple of weeks. We’re due to come out of the bail-out, a three year bail-out – over the next five or six days. And if you asked anybody, most of the economists a year, year and a half ago, ‘would we come out without needing another bail-out, or some sort of financial back-stop, or some sort of safety net?’, well nobody would have believed that- and that’s what’s going to happen. I think an awful lot of that is confidence – suddenly the mood music changed around Ireland -the international investors started to believe the Irish story, but most importantly they started looking at other countries and really poured the pain onto those that couldn’t. So, yeah – the numbers look good.”

O’Connor: “Okay, so now – you’ve made this documentary which is going out on Monday night and what you’ve done is – you’ve spoken to…. they’re basically allowing international investors and stuff – they’re kind of queueing up to buy Ireland, aren’t they?”

Kehoe: “Absolutely, there’s a staggering amount of money – billion, tens of billions, hundreds of billions that’s literally been coming into ireland over the past couple of years while we’ve been dealing with the austerity and the cuts and the cut-backs. Some of the estate agents have crunched the data in property alone and they reckon that there is six billion euro waiting out there – just to be invested in Irish property at the moment. And of that 75% is coming from foreign money. So what we did is, we tried to talk to some of the people who are doing it – the {big} players.”

O’Connor: “Before we talk about them now – you could take two interpretations of what’s going on, could you? Obviously it suggests a certain confidence among international players in Ireland, or you could say, ‘Jeez, are we giving the place away too cheap?’ Is that fair to say that of the situation?”

Kehoe: “Absolutely, I mean if you look at it – the former Anglo Irish Bank is currently being sold as part of the liquidation, that’s twenty two and a half billion euro on the blocks in a rapid-fire six month auction, NAMA is selling tens of billions of euro worth of property as well. So as you say, there are two ways of looking at it – there is – one, you could say we are asset-stripping the country, somebody is literally profiteering on the back of Ireland’s economic calamity they’re able to get top-value products – I mean there are hotels that cost one hundred million euro, like The Ritz, 150 million euro – down in Powerscourt – it was bought for small… one, two, three million. You can buy properties literally for a fraction of their cost price because they need to be sold, the banks need to sell them, cash-strapped investors need to sell them – and there really is a buyers’ market at the moment. But on the other hand we need the money coming in – they have to be sold to somebody.”

[Later]

O’Connor: “So look, I suppose what everyone’s kind of wondering, I feel a little conflicted about all of this – is this a good thing, or a bad thing?”

Kehoe: “I mean, it’s both – it’s a massive change for the country – we are effectively seeing a major shift in the ownership of the country – buildings, banks, bonds – the whole thing has literally been sold in the past couple of years. But that’s what happens in a recession when the economy tanks. It happened in the United States – great fortunes were made after the recession there, it happened all throughout Europe when the economies went bad – it happened in Japan – it’s just the inevitable consequence of a post-crash environment. There’s an awful lot for sale – the people with the money aren’t from the country. Foreigners come in and they make an awful lot of money in distressed assets – they hold it, we don’t know how long they hold it for – ultimately, they will sell it and make an awful lot of money.”

Watch here (@1.10)

Previously: Where The Big Colourful Players Are