47 ANZ Banks for sale

[Dazz]

Hello chaps....

Not that I'm in the market, but thought the attached may whet the appetite for those contemplating dipping their toe in a different pond.


http://www.anzjoneslanglasalle.com.au/




If I had to give a quick summary ;

Positives

1. Blue chip Tenant (i.e. you'll get your rent)
2. Outgoings paid by tenant (CR, WR, LT, Ins)
3. Long secure Leases
4. Market review....these are crucial....after 4 years for the 10 year leases
5. Rent goes up by 4% per annum otherwise
6. All auctioned on the same day.....March 18.
7. Big melting pot of 47 to choose from, with a range to suit all budgets
8. Some have a decent land component
9. Some have outstanding corner positions
10. Some are lovely old heritage buildings.
11. After the Lease has expired, Tenant will paint and decorate for you.


Negatives

1. With it being advertised so widely....you'll be doing well to get a bargain.
2. Nice safe everything done investment means high price usually.
3. Some are old heritage buildings.


Do your own DD, and don't ask me which ones look good. These are all way too nice for what we normally buy.


Good luck if you are interested.

 

[eggnog]

Thanks daz. Looks like some nice properties in great locations for sale. First thing that comes to mind though-why selling so much ANZ properties?

 

[Humphrey]

Yield?

Ok Daz, I won't ask which ones you think look good but feel free to tell us if you change your mind

What I will ask is roughly what yield this type of property should provide and what multiple of that yield should determine the price?

 

[eggnog]

I cant get to the lease details section. Could someone please post the details for me. Would really like to know what a commercial lease looks like and what is included in them. Thanks.

 

[Humphrey]

The site was a bit twitchy. Here are the Lease details

Lessee
Australia and New Zealand Banking Group Limited.

Demised Premises
The land which includes all of the buildings, improvements and structures on the land excluding property of the Lesse

Rental
As detailed for each property.

Lease Term & Options
Leases comprise of 5 and 10 year leases with further 5+5 or 5+5+5 year options depending on the property.

Rent Reviews
Fixed 4% increases annually on the anniversary of the commencement date of the lease with an open market review at each option period. Where the lease has a ten year term, an open market review will take place upon the fourth anniversary of the first term rather than a fixed 4% increase.

Commencement Date
Day following the settlement of each property.

Outgoings
The Lessee is responsible for the payment of:

rates and other charges payable to any authority (including land tax on a single holding basis);
the landlord’s insurance relating to the premises, its use and occupancy;
the utilities connected to the premises; and
limited maintenance and repair costs,
unless otherwise stipulated by state specific legislation.

Make Good
Within a reasonable time after the lease ends, the Lessee may remove its property and must promptly repair any damage caused to the premises as a direct result of the removal of such property.

If the Lessee does not remove any part of the Lessee’s property at the end of the lease, it will become the property of the landlord excluding ATMs and night safes.

The premises will be returned at the end of the lease:

with the interior clean and tidy; and
in good and tenantable repair.
Note: The above summary is provided as an overview only and a thorough review should be undertaken of all contract and lease documentation by any purchaser. Copies are available upon request.

 

[BayView]

I remember reading a feature article in API magazine some 4 or 5 years ago now on investing in Bank's buildings for sale with lease backs.

One of the hidden "cons" of it was that the Banks are often downsizing their branches, so they sell off their property knowing they won't be needing it into the future.

In effect, they are winding down the branch/branches concerned and eventually will close it; consolidating the areas into larger areas serviced by less Banks. Gotta keep those shareholders happy.

The problem for the investor is that they end up with this lovely old heritage building on a prime corner location, but with no tenant and the building is sort of "purpose built", so limited to which type of tenants you can get.

Often times, these Bank branches are in country towns, or regional areas, and the Banks don't think it is a viable proposition any more, and it may be very difficult to get another tenant in a country/regional town.

What do you then do with it?

Turn it into a trendy cafe, or boutique apartments, or a hairdresser's salon?

If it is a Heritage building, does it have restrictions governing it's use and any renovations or changes etc?

I'm not saying you shouldn't do this sort of investment, but you really need to look at the future plans of the Bank, what is happening in that area population/commerce wise, and weigh up whether there is merit in doing it.

 

[GIDDO]

Ok Daz, I won't ask which ones you think look good but feel free to tell us if you change your mind

What I will ask is roughly what yield this type of property should provide and what multiple of that yield should determine the price?

I'll have a stab at guessing the yield.

My guess: between 6 and 7 percent.

 

[Humphrey]

One of the hidden "cons" of it was that the Banks are often downsizing their branches, so they sell off their property knowing they won't be needing it into the future.

In effect, they are winding down the branch/branches concerned and eventually will close it; consolidating the areas into larger areas serviced by less Banks. Gotta keep those shareholders happy.

I thought along these lines myself. I only looked at NSW and QLD as these are areas I know. NSW seemed to be all rural. QLD was a mixture. Two were within 1-2K of CBD - Fortitude Valley and Spring Hill. A ha, I thought, these are the "safer" ones. But then realised that these are maybe even more easily retired than the rurals one. Customers would simply have to go to the CBD branch a k or two away.

 

[buzzlightyear]

I thought along these lines myself. I only looked at NSW and QLD as these are areas I know. NSW seemed to be all rural. QLD was a mixture. Two were within 1-2K of CBD - Fortitude Valley and Spring Hill. A ha, I thought, these are the "safer" ones. But then realised that these are maybe even more easily retired than the rurals one. Customers would simply have to go to the CBD branch a k or two away.

I do recall reading recently (can't remember when though), that banks are now looking at increasing the number of branches.

I had a look at the Vic properties and only 2 is in Melbourne metro (Doncaster, Cheltenham). I doubt that the price paid for these, you would get a yield of 6-7%. Given the name of the lessee (ANZ) and the locations in Melb metro, I suspect you would get less than 5% yield...

 

[Humphrey]

Show me the money

With a yield of 5-7%, and interest rates of 9.5%+ then where is the money? Grossreal has mentioned that commercial property has a fairly flat growth curve so I don't see the appeal of this type of investment. Even 30% deposit makes the deal roughly cash flow neutral at 7% yield and 10% finance. Tell me what I'm missing?

 

[WillG]

Perhaps ANZ is trying to raise some $$'s to get out of credit problems

http://www.news.com.au/business/story/0,23636,23231656-31037,00.html

 

[chrispy]

I can only reiterate LA's warning.

Our local ANZ Bank was sold some time ago, with a lease to the ANZ Bank, which resulted in a very good price, subsequently, ANZ downsized and consolidated branches at Greensborough.

The Building sat vacant for some time before it was let to an accountant, however, considerable expense was involved in reconfiguring the building to relet.

Chris

 

[buzzlightyear]

I can only reiterate LA's warning.

Our local ANZ Bank was sold some time ago, with a lease to the ANZ Bank, which resulted in a very good price, subsequently, ANZ downsized and consolidated branches at Greensborough.

The Building sat vacant for some time before it was let to an accountant, however, considerable expense was involved in reconfiguring the building to relet.

Chris

Given the experience, if you knew then what you do today, would you have proceeded with the purchase?

 

[chrispy]

Buzz

I was not the purchaser. So am unable to answer your question. I do know that the value of the building has not increased in line with the remainder of the shops in the street as it had been sold at a premium.

Chris

 

[Dazz]

hahahahahahaha Amazing response so far.....

Fear's a powerful thing. It'll stop reasonable folk dead in their tracks.

To put things in perspective, there are levels of risk associated with every IP. Some people start with a vacant block, build something and then go looking for a tenant. They are braver than I, for I don't have the fortitude for this, but they usually do well. This on the other hand is at the other end of the spectrum, with everything handed to you on a platter. If this is too risky....then you surely don't buy IP's, cos a blue chip tenant signed up for either 5 or 10 years with rent guaranteed.....well, maybe there is safer out there, but I've not seen it.

Even our first CIP, where everything was done (Tenant / Lease / systems) and presented to us on a platter, wasn't as safe and secure as these.

Blue chip tenant on a 10 year Lease....hmmmm. What will happen after that....who knows. I've never met investor who can predict exactly what's going to happen in 10 years time. They'd be rich if they could.

Anyway, looks like the consensus on the forum is be very very careful. You are very likely to go bankrupt and lose everything. Someone read an article once about it. hahahahaha


I had no idea people on this forum were that scared of things they don't know. Sailor would have a field day with the psychology behind this.

Has anyone ever actually owned one of these, and is in a position to comment from experience ??

 

[chrispy]

Daz

I have commercial property and it is returning a lot more than 5%

Banks are not as secure as they were plus the buildings on offer are not all 10 year leases.

The one sold that I was interested in had a 3 year lease, with options - the purchasers well and truly got their fingers burnt and it was an ANZ Bank, the bank consolidated and downsized branches.

Careful SSers - yes - my investing is what I live on - at my age I can't start again, at your age you can, thats the difference

Chris

 

[Humphrey]

hahahahahahaha Amazing response so far.....

Fear's a powerful thing. It'll stop reasonable folk dead in their tracks.

Fear enough Daz. Can you respond to my question/comments concerning the returns? Show me where the money is in this deal?

 

[BoatBoy]

Similar on Crikey

Top Stories
1 . ANZ catches cold, market sneezes
Glenn Dyer writes:



Last Wednesday it was the Commonwealth Bank surprising the market with what was considered to be a substandard result: earnings were flat and provisions were up $138 million; disclosures which knocked the back's share price down 7.5% last week and took the rest of the sector with it.


Friday saw the sector shaken by a 2-3% plus fall for some banks, among them the ANZ which shed 53 cents. Today we found out why it was sold off with a series of surprises in its first half trading update.


From the nervy market's point of view, the news wasn't good, as ANZ revealed three problem loans or deals including one each in both property and resources. Total provisions of around $340 million will effectively wipe out profit growth this year, from what the bank said today.


Last October the ANZ reported full-year cash profit of $3.92 billion, following an 8% increase in costs in the second- half and a 39% jump in provisions for bad debts, a move that had been signalled, but still startled the market.





Despite an attempt to spin the news today with a confident forecast of bettering the 11.5%-plus improvement in underlying earnings in 2007, the market wasn't listening.


ANZ shares were sold off by more than 5% in the first few minutes of trading, dragging the rest of the market down . That wiped the best part of $2.3 billion off the bank's capitalisation and takes the loss in value since the peak to more than 28%, a wonderful departing legacy from former CEO, John McFarlane.


The fall in value from the peak is around $13 billion and ANZ shares fell as much as 5.8%, or $1.38, to 22.53 in early trading.


News of the indefinite postponement of the interim earnings and financial update for the struggling Allco Finance Group, didn't help sentiment; while news of a 65% price rise for iron ore for BHP Billion and Rio, which would have normally sent the market higher, wasn't enough to offset the impact of the ANZ's news.

The Commonwealth lost another 5.9% or $2.73 to $43.65, stretching this year's loss to around 25%; the National Australia Bank fell by nearly 3% at one stage, or 83 cents, to $29.8, while Westpac Banking Corp. was off 85 cents, or 3.6% to $22.51 in early trading.

Read the full story on our website


Dave

 

[Dazz]

Fear enough Daz. Can you respond to my question/comments concerning the returns?

No I cannot....I have not done any DD on any of them. I don't plan on buying any of them, so there is no need to do any.

Show me where the money is in this deal?

No. This is not my job. As an investor, it is incumbent upon yourself to your own DD. I'm not a sales agent for the ANZ. As people have mentioned, they could be completely cr@p for your individual circumstances....only you can answer.


If you are interested, have a squizz, chase it down to the nth degree and make your own mind up. Time for adults to stand up, not rely on other folk. If you're not interested, that's just fabbo too.

 

[Humphrey]

Strangely enough, I never for one moment thought that you were a sales agent for ANZ.

I thought you might come back with something like "well actually the yield would be more in the vicinity of x%" or something similar to correct my ballpark calculation, rather than calling me a scared child.