ANZ Branches up for sale.

Just looking thru the latest commercial property news. I see ANZ National Bank are putting up 16 branches for sale , all with leases back to the bank. If anyone is interested in setting up a propertional ownership scheme to buy 1 or 2 or 3 of these I would be interested in joining in. I would also consider managing the whole process. I have purchased and sold 8 commercial properties over the last 5 years so have a reasonable amount of experience.

Not sure what branches are for sale yet although 1 article mentions a 6 North Is , 10 South Is. split with Ashburton and Timaru being mentioned ( good strong dairying towns ) so they could be interesting. Any thoughts on yields ?? ... I would have thought 8% minimum in this climate.

I agree Funguspudding that the LPT's look great value and I have been buying heavily the last few weeks. ( GMT and APT esp ) . I have most of my money invested in a Canterbury based dairy farming / milk processing company. Have quadrupled my money in the last 3 years ... just thinking of converting some of that capital gain into cashflow by buying a few lowly geared commercial properties. ANZ or National Bank in Queenstown or Wanaka would really get my juices flowing. A few actual biuldings sitting along side a portfolio of listed property stocks with 7.5% divi yields seems a good idea.

Disc: hold and have purchased within the last 3 weeks.

APT
KIP
GMT
KPF
ING
PFI

It will be interesting to what the ANZ will lend to potential buyers of these buildings .... they'll know the tenant pretty well , they'll know the properties pretty well .... I wonder if they will stretch to 65-70% against the sale prices. I'm guessing the rent in say the Ashburton Branch for example would be between $80,000 and $100,000 .... at a yield of 8% that's up to $1.2m . Big chunk of equity required of say $400-500k for a single buyer but split 5 ways quite manageable.

Key to the economics are obviously not paying thru the nose , realistic rent which will rise at cpi minimum, and the hardest thing at present getting the finance ... rates will fall over the next few years, so if you can handle the short term cashflow implications of 10%+ rates then when have rates fall by 200bps b say early-mid 2010 and the first rent review is around the corner and is going to rise by say 4% for the 08/09 12mth period and then 3% for the 09/10 period the cashflows could look quite nice ... I will do some sums.

No interest yet .... I'm getting CBRE to send me all the info ... auction not till Sept so a while to get things together if people interested.

RBD sold and leased back all the properties they owned a few years ago

My concern is when ANZ decide they do not need to keep the National Bank brand going. They will then only need one branch in each town rather than two. So then you have a building set up as a bank that has no tenant.

Looking at the ANZ's announcement ( and 10% fall in value ! ) it looks like they need avery penny they can get their hands on ! ANZ share price virtually halved in the last 10 months. Makes commercial property look very safe in comparison. Better to be the landlord than the tenant !!