Australian hardware giant Bunnings will begin demolition work next week at its Dunedin site in preparation for developing the 2.3ha Strathallan St plot, estimated to be valued at more than $27 million when completed.
Despite the recession, Bunnings remains adamant it will stick to its New Zealand expansion plans of opening new stores each year, which at present also include sites under construction at Cambridge and Gisborne, Bunnings general manager Rod Caust said yesterday.
"The New Zealand market is extremely competitive, but we have a proven and robust business model that enables us to deliver value to customers.
"We are still committed to opening at least three new stores per year," Mr Caust said.
Hardware outlets are expected to experience a downturn like all retail outlets during the recession, however homeowners are also expected to return in droves to DIY practices to save money on house renovations or extensions.
Bunnings secured resource consent from the Dunedin City Council in July last year, despite a challenge from a group of local businessmen, to redevelop the Strathallan St site which it bought from the council in December 2006 for an undisclosed sum.
It will have more than 12,000sq m of space, a car park with room for 250 vehicles and employ up to 120 full-time and part-time staff.
Once the lease of present site occupier New Zealand Woolhandlers expires next week, it is expected demolition will take about two months and construction a further seven months.
The Bunnings store could be open by the end of the year.
However, Mr Caust said an opening date was yet be chosen.
Rather than send in bulldozers to level the existing building, Mr Caust said the demolition work would be "orderly, with existing concrete crushed and re-used". Aside from the undisclosed purchase price, about $11 million is expected to be spent on construction and $7 million on stock, with the completed project to be valued at about $27 million.
Nearby hardware competitor Mitre 10 Mega, which was developed in 2005 by Dunedin businessman Martin Dippie for about $10 million, created some controversy when it was painted bright orange.
The proposed large Bunnings roof, visible to surrounding elevated suburbs also, is to be an off-white colour to avoid undue glare issues, and Bunnings has said in the past the building would be painted dark green.
The granting of the Bunnings resource consent application was essentially an exemption for a non-complying activity, in that the industrial 1 zoning restricts retailing activity.
The decision came with several conditions, mainly surrounding traffic management issues.
