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Kirkcaldie's property sale stalls

Last updated 05:00 04/12/2012
kirkcaldie & stains
MAARTEN HOLL/Dominion Post

Kirkcaldie & Stains

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A move by Wellington retailer Kirkcaldie & Stains to sell its real estate portfolio appears to have hit a snag after the bidder for its retail and office building in the capital missed a second due diligence deadline.

The department store and property manager yesterday announced the unnamed party looking to acquire the six-storey Harbour City Centre had not confirmed it was satisfied with the assets despite that being a condition of the sale. The original deadline for the due diligence report was mid-November, later extended to the end of the month at the bidder's request.

Harbour City Centre has undergone extensive earthquake strengthening, and its anchor tenant, Contact Energy, had recently leased all the office space after smaller tenants were given notice.

Real estate agency Bayleys valued the building at $46.5 million last year.

When the deal was announced in late October Kirkcaldie's share price rose 25 per cent in just three days to $3.25 before dropping back to its current level of $3.05.

The sale of the property comes as the firm has struggled to be profitable. It reported a net loss of $773,000 for the 12 months ending August, above the $56,000 loss seen in the prior year.

Retail sales in the period fell to $37.3m from $38.7m previously, while rental revenues rose to $4.1m from $3.7m.

The building is situated opposite its main store front on Lambton Quay, which it rents from a firm controlled by Sir Robert Jones.

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