The Manawatu Mail Centre will be processing all of the lower North Island's post at a newly confirmed site in Palmerston North by this time next year.
New Zealand Post has purchased the lease to 39 Malden St, the current processing site of Steel and Tube, and will shift from its Tremaine Ave building to the Roslyn site once it begins processing Wellington's mail in March.
It is a decision that has been a long time coming after the government organisation announced it was cutting its main mail centres from six to three in June.
That brought with it an announcement of 180 new jobs for Palmerston North. Those numbers could not be accommodated at the current Tremaine and Matthews Ave site on the western side of Coronation Park, which has a warehouse that is just 2111 square metres in size.
The 9401sqm Malden St site has a roughly 4000sqm building on it, which NZ Post will renovate and expand by about 1500sqm to accommodate four mail processing machines.
Manawatu Mail Centre leader Rob Fryer said it was pleasing to finally have everything confirmed.
"This site here helps us deliver on our future plans."
Taranaki's mail will begin to be processed in Manawatu on May 5, but the Tremaine Ave site would comfortably handle that increase in capacity for the time being, Mr Fryer said.
The new site would only be needed once the Te Puni Mail Centre in Wellington shut, and when that happened, everything was likely to be shifted into the Steel and Tube building.
Some non-mail processing functions of NZ Post would remain at the Tremaine Ave building, which NZ Post would keep the lease to, Mr Fryer said.
Colliers International Palmerston North agent Grant Lloyd helped broker the arrangement, which began with the sale of the Steel and Tube building to a Palmerston North property developer last year.
"Steel and Tube originally made plans to move out - they are off to a big new $6 or $7 million dollar factory which they are putting in on the corner of Francis Way and Armstrong St.
"We started looking for tenants and NZ Post were going to go to a place near the airport, but we offered that building to them and it has worked out.
"It's a brilliant result for the region."
The building has a capital value of $3,875,000 and was sold to the Palmerston North developer, who did not want to be named, for $3 million.
Steel and Tube representatives had not returned calls at press time.
- Manawatu Standard
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