British banking-halls as a property investment

Abstract

This research is related to British banking-halls as a class of real estate investment. Sale-and-leaseback has become an increasingly common approach during the last two decades for the holding of British banking-halls. One measure used in making property investment decisions is the all risks yield (ARY). Investors and their advisors have a need for a predictive framework which they can use for predicting those retail bank premises likely to achieve the highest ARY when assembling investment portfolios of such properties. A predictive framework necessitates the identification of those factors significantly influencing the yields of British banking-halls. This research aims to develop such a framework. Triangulation methodology was adopted to establish and test the predictive framework. A literature review established theory before a qualitative study, based upon semi-structured interviews and a questionnaire, was used to establish the influencing factors. A cross-sectional study of auction data then formed the basis of the quantitative regression study. The qualitative and quantitative studies validated that four factors were significant in influencing yield. These were tenant banking company, lot size, super-region and the macro-economic cycle index. A toolkit comprising a predictive framework for those banking-halls likely to produce the highest ARY was produced. This is capable of being used by professional practitioners and investors in predicting high yield for portfolio building purposes. The predictive framework was developed based upon the quantitative data from those three banks with the most premises sold by sale-and-leaseback. It formed a baseline from which further studies can build to test its significance for other banks. Consequently, a more robust predictive framework can be developed for banking-hall investments. Further research can also be conducted to develop predictive frameworks forecasting yields for investment in other commercial retail sectors, based upon the findings of this research.