Scotiabank considers selling Toronto tower

Tony · #1 Posted **Jan 19, 2012, 4:50 PM**

Scotiabank considers selling Toronto tower
Could be Canada's biggest commercial real estate deal
The Canadian Press
Posted: Jan 19, 2012 9:31 AM ET
Last Updated: Jan 19, 2012 9:29 AM ET

Scotiabank is in the early stages of hunting for buyers interested in Scotia Plaza, its skyscraper headquarters in downtown Toronto that could be worth as much as $1 billion.

The bank said Thursday that a sale of the second-tallest tower in the country is being explored as part of Scotiabank's regular review of its operations.

http://www.cbc.ca/news/canada/toront...ank-tower.html

Highinthesky · #2 Posted **Jan 19, 2012, 5:09 PM**

I think it might be more than just regular reviews. Interesting coincidence that they are looking at selling a 1 billions dollar real estate asset at the same time they buy a 50% stake in another bank for approximately 1 billion dollars.

DrNest · #3 Posted **Jan 19, 2012, 7:06 PM**

Interesting proposal.

Should they sell, would ScotiaBank remain in the tower as rental tennants, or would they complete relocate their head office? Would they construct a new tower, or move into several smaller offices dotted about the city?

LeftCoaster · #4 Posted **Jan 19, 2012, 7:27 PM**

I have always been a bit surprised they still owned their building, none of the other major banks do. Its not their core competency and it is really incongruent with their business model.

I would imagine if they sold it they would stay on as tenants as it is an iconic building associated with their brand. No real reason to move, especially since it is the newest of the bank towers and in the best shape.

go_leafs_go02 · #5 Posted **Jan 19, 2012, 8:19 PM**

If they sell, they could move to Halifax......

Just kidding...

Rico Rommheim · #6 Posted **Jan 19, 2012, 8:55 PM**

What's the point of even building office towers if banks seek to sell them off 20 years later? How would that be beneficial?

LeftCoaster · #7 Posted **Jan 19, 2012, 10:28 PM**

Well that's why they don't do it anymore

urbandreamer · #8 Posted **Jan 20, 2012, 4:42 AM**

I take it as a sign that SB believes the real estate market has peaked this cycle.

LeftCoaster · #9 Posted **Jan 20, 2012, 2:40 PM**

There is a certain amount of truth to that.

Ramako · #10 Posted **Jan 20, 2012, 6:46 PM**

You also have to consider that Scotia needs to raise some cash at the moment to pay for recent acquisitions. Apparently they closed a deal on a Colombian bank this week.

Highinthesky · #11 Posted **Jan 20, 2012, 7:38 PM**

BNS did not own Scotia Plaza when it was constructed. However the original owners went bankrupt and that is probably how BNS ended up owning the tower.

BNS would almost certainly stay in Scotia Plaza if they were to sell the tower and reading into this sale as anything more BNS selling an asset that is outside of their core business so as to meet Basel III capital requirement given their recent acquisition would not be good.

Andrewjm3D · #12 Posted **Jan 20, 2012, 9:38 PM**

Quote:

Originally Posted by Ramako

You also have to consider that Scotia needs to raise some cash at the moment to pay for recent acquisitions. Apparently they closed a deal on a Colombian bank this week.

This is exactly why. I wonder if Brookfield will want to ad it to their portfolio?

LeftCoaster · #13 Posted **Jan 20, 2012, 9:43 PM**

I'm sure Brookfield, CF, BCIMC and Oxford are all licking their chops at this one.

It's a prize asset for sure, but these companies are all very well run and will likely show some restraint in running up the price.

The firms that have the capital to afford this asset make up somewhat of an oligopoly so I don't expect thing's to get too out of hand.

Highinthesky · #14 Posted **Feb 2, 2012, 9:20 PM**

Scotiabank announced today that they will be raising around 1.5 billion dollars through the sale of stock. I bet this ends the interest in a potential Scotia Plaza sale on the part of Scotiabank.

Richlord11 · #15 Posted **Feb 16, 2012, 4:03 PM**

Agreed. This will vastly boost their Tier 1 capital ratio and there will be no need to continue offering Scotia Plaza to potential buyers.

caltrane74 · #16 Posted **Feb 16, 2012, 11:38 PM**

Shit! I was just gonna buy some Scotiabank stock for my RRSP ....

now what do I do........ geez?

WhipperSnapper · #17 Posted **Feb 16, 2012, 11:53 PM**

Quote:

Originally Posted by Richlord11

Agreed. This will vastly boost their Tier 1 capital ratio and there will be no need to continue offering Scotia Plaza to potential buyers.

Why should they hold on to a non-core asset like Scotia Plaza?

urbandreamer · #18 Posted **Feb 17, 2012, 3:19 AM**

Knowing the egos of CEOs and top management, the folks are probably sick of staring at Trump Tower. They want better views.

osmo · #19 Posted **Feb 21, 2012, 5:47 PM**

The Bank wants to sell its home... I agree this points more to a ceiling in the property market. They are selling high, I am sure they wanted to dump the Plaza for a while but this was the right time to try and do it.

Highinthesky · #20 Posted **Feb 21, 2012, 6:58 PM**

Quote:

Originally Posted by caltrane74

Shit! I was just gonna buy some Scotiabank stock for my RRSP ....

now what do I do........ geez?

Wait for the sale of the new stock and buy on any dip while enjoying the temporary increase in yield.