GST sparks branch sell-offs

THE recent spate of bank branch sell-offs has been caused to a large extent by uncertainty over the impending GST, says Jones Lang LaSalle research analyst Frank Sorgiovanni.

“It is apparent that the demand from investors will be reduced with the effects of the GST on sale and leaseback transactions remaining unclear after its inception,” Mr Sorgiovanni said.

“Many banks are placing their properties on the market nationwide with the Westpac Banking Group offloading sixty-eight buildings and the Commonwealth Bank, National Australia Bank and Colonial expected to follow over the next couple of months,” he said.

“The banks are introducing new ways to better facilitate their capital more effectively and want to refocus towards core business priorities.”

Last month, Jones Lang LaSalle sold three ANZ properties in WA as part of a $50 million, twenty-three property sell-off, with ANZ intending to sell a further nineteen properties around the country.

The first two properties in Morley and Geraldton sold for a combined return of $2.7 million while the Murray Street Mall site achieved $5.4 million with a five year leaseback.

“One of the largest off-market transactions in the city last year included the Westpac Banking Group’s direct transfer of the Challenge Bank Centre on 109 St George’s Terrace to an affiliate property trust for $22.25 million,” Mr Sorgiovanni said.

In all, Westpac offloaded $176 million worth of Australian property to the Westpac Property Trust and by doing so reduced its branch ownership from about 30 per cent to 20 per cent.

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