I am advised by NAMA that rent abatements have typically been agreed for an initial fixed period of no more than twelve months and that thereafter they are subject to ongoing assessment by reference to factors such as turnover and business profitability. The objective of agreeing rent abatement in the first instance is to support the short-term viability of a business which is intrinsically viable but experiencing difficulties arising from current economic conditions. In cases where there is genuine hardship which can be ameliorated by rent abatement, NAMA achieves two significant benefits. Firstly, it helps preserve the value of the collateral supporting its loans by ensuring that tenants remain in business and continue thereby to generate rental income. Secondly, it safeguards jobs and economic activity in general.
Any short-term loss of rental income arising from rent abatement and any short term decrease in the value of the asset where there is rent abatement, therefore, is likely to be more than offset by these long-term benefits.