New home for Silver Fern Farms?
Silver Fern Farms is considering moving its Dunedin
headquarters into the former chief post office as the anchor
Property industry sources in Dunedin say SFF has signed a
conditional lease agreement for the ground and first floor of
the Princes St building, subject to board approval.
SFF chief executive Keith Cooper said yesterday, when
contacted, the landlord's redevelopment of the company's
present George St building would prompt a ''rent review'',
which would be based on a ''materially higher value''.
The old chief post office was one of several sites being
considered and, in order to ''future-proof'' SFF, a new site
would include facilities for a larger workforce, product
development and meeting facilities.
The number of Dunedin staff, 120 at present, could be boosted
in the future, if staff from the company's other 23 sites
around the country were relocated.
''We may have to consider sub-letting,'' he said, referring
to the prospect of having more space than initially required.
Property industry sources say SFF's annual lease costs would
rise from about $300,000 at its present headquarters to
$625,000 at the post office, with possibly $3 million-$3.5
million to be spent fitting out the two floors.
Mr Cooper said it was ''not us with that figure''. He said he
would expect any prospective landlord to share fit-out costs.
The post office lease ''was not double'', he said.
''To put it bluntly, we won't be paying $625,000.''
It could be ''several months'' before SFF was in a position
to release relocation cost estimates, he said.
On the question of a conditional agreement having been
signed, Mr Cooper said: ''We have no committed position. We
have several options open to us to exercise, and have got
[first option] preference at the head of any queue.''
Building owner, Invercargill-based Geoff Thomson, of
Distinction Hotels, who bought the former chief post office
in May 2010 for a reported $4.4 million, could not be
contacted yesterday about his plans for the building.
Last October, he said he remained committed to developing the
former post office into a hotel. His initial plans were for a
$20 million hotel, including 180 rooms and suites,
restaurants, bars, conference facilities, a business centre,
gym and lap pool.
SFF chairman Eoin Garden said yesterday when contacted it was
a ''management issue'', noting ''nothing had come to the
board yet, [so] it's not a board issue''.
Last financial year, SFF booked an after-tax loss of $31.1
million, on $2 billion turnover, after demand for lamb fell
dramatically in the face of unsustainably high prices.
Turnover was down 3%.
SFF's debt surged by $206 million, from $111 million to $317