The Warehouse Group has announced the final sale of its Newmarket location in an unconditional contract that is due to be completed in July of this year.
The group has been setting plans for its new location for a while and now has taken the next step by selling its property for $65 million. The proceeds will be used to reduce debt before the move.
Settlement of the sale is expected to be completed in July this year and the sale proceeds will generate a pre-tax gain of approximately $12 million.
In April, last year, Warehouse Group revealed its plans for a huge mix-use site which will also be based in Newmarket.
The plan is for a mixed-use development that will house another 18,245 square metres of retail space, 9165 square metres of office space, a 160-unit apartment complex, a 40-room hotel and 720 carparks.
The expected size of the new Broadway address is to be about 47,914 square metres.
General manager of property for The Warehouse, Fiona Shilton, says the company bought the site strategically to secure a long-term footprint in the area.
“Mixed-use is a very new approach to development in New Zealand and we’re looking for additional expertise to support us in our endeavour to provide a quality space that supports living, working and play for the community,” Shilton says.
She says given the site’s location in the fashion capital of New Zealand, as well as Newmarket’s low-vacancy rates, it could be the best mixed-use development the country will see this year.
The current site will continue to be leased and operated by Warehouse until it is to be vacated in October 2018.
In March, Warehouse posted a 76 percent drop in first-half profit to $13.6 million.
The retailer is on a cost-cutting drive, cutting a net 130 jobs at its store support offices in Auckland and some regional centres.
The shares last traded at $2.22 and have dropped 22 percent so far this year.