BNZ sale of more branches nets $8m

By Bob Dey

Thirteen Bank of New Zealand branches were sold on a six-year leaseback basis this week, 11 under the hammer, to complete a property selldown by the bank.

BNZ collected $8.8 million in March, when it sold 18 branches at auction, and just over $8 million this week from the Auckland auction plus pre-auction disposal of the Katikati and Martinborough branches. Four remain to be sold by private treaty.

It sold another 45 branches in 1996 and has now reduced its ownership to 20 per cent from about 70 per cent.

Yesterday's auction began with spirited bidding - the opening offer of $500,000 for the Kerikeri branch was at a 10.8 per cent yield and, after three minutes of furious bidding, Colliers Jardine auctioneer Mike Williams banged down his hammer on a price of $767,000 and a 7 per cent yield.

Two others went for single-digit yields, the Milford branch in Auckland for $1.4 million at 8.7 per cent and the Paraparaumu branch for $970,000 at 9.1 per cent.

Yields on the rest ranged from 10.02 per cent for the Whakatane branch up to 13.74 per cent on Glen Eden. Top price was $1.42 million for the Henderson branch, sold on an 11.54 per cent yield.

The bank's head of corporate property, David Browne, said yesterday's result was slightly better than he expected.

For most of the bank's remaining branches, sale was impractical at the moment.

"In most of them a property solution is required. For example, the space is too big for the bank. Newmarket is an example, where you have a large building that is no longer suitable. We may sell to a developer and lease back."