Document ID: chunk:federal_register_of_legislation:F2024L01073:front:0:p13
Version: federal_register_of_legislation:F2024L01073
Segment Type: other
Provision Reference: 
Character Range: 33681–36783

single tenant represents:
                 1.             greater than 25 per cent of portfolio net rental income for portfolios of retail shopping centres that typically require significant anchor tenants to attract specialty tenants; and
                 2.          greater than 10 per cent of portfolio net rental income for all other portfolios of real estate assets (e.g. commercial offices, industrial buildings, hotels), with the exception of Government tenants.
 2.          Where an ADI has an exposure to commercial property that is used predominantly for forest or agricultural purposes, it may classify the exposure as 'not dependent', unless the property has been acquired specifically for lease or resale, and the servicing of the debt is dependent on such lease or resale (or the lease or resale of other properties).

Land acquisition, development and construction
 1.          Land acquisition, development and construction (ADC) refers to property exposures where the security for the loan predominantly relates to any of the land acquisition for development and construction purposes, or development and construction of any residential or commercial property.
 2.          All property exposures where the predominant property security is not fully completed must be included as ADC unless:
         1.           the property is used predominantly for forest or agricultural purposes; or
         2.           the loan is secured by residential property under construction, or by land upon which residential property will be constructed, where the property will be the primary residence of the borrower.
 3.          An ADI may apply a risk weight of 100 per cent to its ADC exposures secured by residential property if the following conditions are met:
         1.           the exposure meets all of the requirements in paragraphs 3, 4, 6 and 7 of this Attachment;
         2.           total debt to qualifying development costs are less than 75 per cent, where debt includes all debt facilities held by the borrower in relation to the underlying property;
         3.           where the exposure to the borrower is greater than $5 million in aggregate for a single development, qualifying pre-sales for the underlying property are at least equal to 100 per cent of the total debt; and
         4.           the ADI has a policy that defines qualifying pre-sales and qualifying development costs for the purpose of meeting the requirements under paragraph 29 of this Attachment.
 4.          An ADI must apply a risk weight of 150 per cent to all other ADC exposures.

Attachment B – Risk weights for non-property exposures
 1.              An ADI must risk-weight all exposures that are not property exposures according to the requirements detailed in this Attachment, with the exception of:
         1.           unsettled and failed transactions, which must be risk-weighted in accordance with Attachment D to this Prudential Standard; and
         2.           defaulted exposures, which must be risk-weighted in accordance with Attachment E to this Prudential Standard.
 2.