BusinessDesk report by Paul McBeth
Kirkcaldie & Stain’s, Wellington’s upmarket department store, has found buyers for the two buildings making up the Harbour City Centre, provided certain conditions are met for each property.
Kirk’s has entered into separate conditional sale and purchase agreements for the front and rear buildings of the Lambton Quay site, it said in a statement just before the market closed this afternoon. More details will be announced once due diligence for each transaction is completed, and both deals need shareholder approval.
The front building, a historically significant structure that formerly housed Kirk’s long-defunct competitor the DIC, accounted for most of the $50 million valuation ascribed to the property. Its sale is subject to physical works being completed to separate it from the back building, which houses a car park, shops and low-grade office space.
Work to separate the buildings is expected to be satisfied in the second half of June. Due diligence and title conditions are likely to be met in early July, with shareholder approval within 30 working days of that, the company said.
Due diligence on the rear building is expected to be satisfied five months after the title and physical works conditions, to allow the buyer to explore potential development of the site.
Kirkcaldie plans to recapitalise its retail unit from the proceeds of the asset sales before returning any surplus to shareholders.
Its retail segment returned to profit in the six months ended Feb. 28, with earnings of $563,000 as it fattened margins from its cost reduction programme. The shares were unchanged at $2.