Bank tenants prove popular as Commonwealth Bank in Swan Hill fetch $1.41 million at auction

An investor has paid $1.41 million at auction yesterday for the 491 square metre premises of the Commonwealth Bank on a corner site in the Swan Hill CBD in the Murray River region.

Before bidding began at the Burgess Rawson auction, the auctioneer David Scholes highlighted that the Swan Hill premises were “bookended” by two ATMs in a region with a booming economy led by agriculture, viticulture and tourism.

The Commonwealth Bank has renewed its lease for a further three years until 2016 paying rent of a round $102,533 per annum, but with no further renewal terms.

However, Scholes said the bank was keen to remain in the building, which it has tenanted for many years and which was recently upgraded.

Scholes said there might also be opportunities to strata the two-storey building should the Commonwealth Bank not sign a new lease.

Bidding started at $1.2 million with a handful of bidders competing for the property in the River Room at Crown Casino.

The winning bid of $1.41 million reflected a yield in excess of 7%.

Vendors may have been motivated by Scholes’ earlier remark that “banks are making so much money, I think your rent is secure”.

The property was marketed by Raoul Holderhead and Jamie Perlinger from Burgess Rawson.

The bank premises formed part of a Burgess Rawson portfolio auction.

Earlier the premises of the ANZ Bank in Korumburra sold for $462,000 on a yield of 5.2%.

Another bank branch, the NAB outlet on Sydney Road in Kilmore, bringing in annual rent of around $39,000, sold for $800,000 to local investor after it was passed-in on a vendor bid of $820,000 – a yield of around 5%.

Bidding started at $500,000.

Ahead of bidding Scholes disclosed the bank had not yet renewed its lease, which expires in September this year.

A head of agreement is in place to renew the lease, but has not yet been finalised.

The buyer can rescind the contract if the lease is not renewed.