The Warehouse to move out of Newmarket

  • 18/04/2017
The Warehouse Newmarket
The Warehouse Newmarket (Google Maps)

The Warehouse is selling its large property in Newmarket, a major retail area of Auckland.

The company has signed an unconditional contract to sell the property for $65 million and will vacate the store in 2018.

"With Auckland's unprecedented period of growth and rising land values it is clear that large format retail use is simply not the best value for the site," Warehouse Group Property General Manager Fiona Shilton said in March.

"Newmarket is a sought-after location and works really well for smaller format stores, offices and residential developments but becomes less viable for larger format stores."

Settlement is expected to be completed in July 2017 and the sale proceeds of $65 million will generate a pre-tax gain of about $12 million, the Auckland-based company said in a release to the stock exchange.

Further details will be provided when it announces its full-year result on September 22.

The site will continue to be leased and operated by Warehouse until it is to be vacated in October 2018.

The retailer is on a cost-cutting drive, cutting a net 130 jobs at its store support offices in Auckland and some regional centres, as it moves to group-wide support systems.

In March, The Warehouse posted a 76 percent drop in first-half profit to $13.6 million after the retailer took an impairment charge against its financial services unit, recognised restructuring costs and earned less from its Red Shed department stores.

The shares last traded at $2.22 and have dropped 22 percent so far this year.