Commercial property buyers still bank on branches
Bank branches may have been trimmed from the retail mix across Australia in recent years but agents say there is no shortage of buyers wanting to invest in them.
Long-term leases, modern fitouts, business frontage in high traffic areas and easily managed single-tenancy leases are the key drawcards for bank site investors.
The sale of the Bendigo Bank in London Circuit, Canberra, this week did not disappoint with the building going under the hammer for $2.55 million within minutes of the opening bid.
Selling agent Kieran Bourke, from Burgess Rawson Sydney, said the property went to a local investor and the price met market expectation.
“We had two registered bidders competing strongly over the phone, with an opening bid of $2.35 million and it was sold within about five minutes,” Mr Bourke said.
“Banks generally sell well with no shortage of interest but it does come down to the location.
“On this particular property, the rental income is good and Bendigo Bank does a lot of business banking and loans so people use the branch regularly unlike some other banks which are more ATM focused.”
Bank site investors look for long-term leases in prime locations, with the property leased to a single, preferably national tenant, Mr Bourke said.
Bendigo Bank at 2/161 London Circuit has occupied the 315-square-metre site for more than 10 years and has a current six-year lease with an option to renew until 2027.
“The branch is in a busy CBD location, has recently been refurbished and was also in a price bracket that appeals to buyers, Mr Bourke said.
The bank’s net annual income is $171,910 pa + GST.
