Part A — Commercial propertyPart A — Commercial property

Part A – Commercial property

Total exposure limits

When calculating total exposure limits, do not include internal limits, which have not been formally advised to a client and may be cancelled at your ADI’s discretion.

Total actual exposures

When calculating total actual exposures, the exposure should include:

• claims and commitments recorded on-balance sheet; and
• the credit equivalent amounts of off-balance sheet claims and commitments.

Impaired exposures

The definition of impaired exposures should be consistent with the methodology used to compile the information for ARF 220.0 Impaired Facilities – ADIs. Specific provisions and security held against these exposures are also requested.

Commercial property classifications

The information required for total exposure limits, total actual exposures, impaired exposures (balance outstanding, specific provisions & security held) are to be classified according to the type of commercial property market/categories to which the ADI is exposed. The categories that the exposures are to be classified in this form are listed below:

1. office;
2. retail – includes retail shops, restaurants, shopping centres, petrol stations, etc;
3. industrial - includes warehouses and factories;
4. land development and subdivisions;
5. other residential - includes residential exposures not excluded by point 1 in the general instructions;
6. tourism and leisure - includes hotels, motels and lodgings, recreational and sporting facilities, hotel developments, time-share developments and other hospitality industries; and
7. other - includes other property exposures not elsewhere covered (e.g. health, education related, churches, infrastructure, etc).

An ADI’s own investment in commercial property (such as equity investments or purchases of units in trusts) should not be included in the main section of the form, but should be noted in Part B. Property held for the ADI’s own use should not be included.

Bank ADIs need only include commercial property exposures which exceed AUD $250 000, whilst non-bank ADIs should include total exposures irrespective of the dollar amount.