PET - Plain English Taxonomy

Attribute: E01858
Concept:
Label: Non-performing Exposures - Security Held: Commercial Property - Industrial
Concept Guidance:
This is the value of security held in relation to the reporting party's exposure to industrial commercial property.     Commercial property exposure is defined according to the nature of the risk. An exposure should be classified as commercial property risk, if the exposure is subject to the performance of the property market.     For reporting purposes, an exposure exists when a facility has been provided for the development, acquisition or improvement of Industrial property, and the servicing and repayment of the facility is dependent on the cash flows generated by the Industrial property itself through sale or rental income, and/or from cash flows generated from other Industrial properties owned by the borrower.Industrial commercial property may include for example, warehouses and factories. 
Form-Specifc Guidance:
The following points may assist to further clarify this general definition:
- The definition excludes residential property loans for owner occupation and loans to individuals or families for investment in residential property.
- Exclude loans to private family companies and/or family trusts where the residence is occupied by the directors or principal beneficiaries of the family trust.
- Exclude loans to builders, construction companies or sub-contractors who are paid for the execution of their contracts by a third party and not out of the sale or rental of the property upon completion. If, however, they assume development risk, whether recognised as a developer or not, the exposure is classified as property exposure.
- Rural exposures will generally not meet the definition of commercial property, unless the property has been acquired specifically for lease or resale, and where the servicing of the debt is dependent on such lease or resale (and/or the lease or resale of other properties).
- Facilities to investment companies, property management companies and unit trusts whose success in business (and therefore the servicing and repayment of the debt) is predominantly dependent upon the performance of the property market are included in commercial property exposure.
- Facilities provided for the acquisition of property to be used for generating income other than through rental or sale are classified under the industry from which the cash flow servicing the debt is derived. In such owner-occupied properties where part of the debt servicing is derived from rental income, the classification depends on the predominant source of debt servicing. If most of the servicing is by way of income derived from the owner's business, the exposure is classified under that business. However, if most of the servicing derives from the property itself, it is a property exposure.
- The Australian and New Zealand Standard Industrial Classification (ANZSIC) codes may be used as a guide. Although ANZSIC was not developed for this purpose, property exposures will generally be to enterprises classified under ANZSIC 771 (Property Operators and Developers), and exclude those under subdivision 57 (Accommodation, Cafes and Restaurants). Also excluded are loans to enterprises classified under subdivision 41 (General Construction) unless they assume the development risk, as described above.
Dimensions
Dimension Member Description
(UnsecuredNotWellSecured)
This dimension categorises information according to whether or not arrangements are in place to secure the repayment of amounts due in relation to the reported information.
The data reported relates to exposures that have been classified as not well-secured or unsecured, that is exposures that have not been classified as well-secured as defined in Prudential Standard APS 220 Credit Risk Management (APS 220).
(OutsideAustralia)
This represents the location of the items being reported.
The items being reported are physically located outside Australia
(NonPerforming)
This dimension categorises information according to the quality of an asset that is connected to the concept being reported, not the concept itself.
The data reported relates to items that are related to assets that have been classified as non-performing as defined in Prudential Standard APS 220 Credit Risk Management (APS 220). The non-performance is recognised in relation to the related concept, not the reported information.