Kirks spends above $20 million on Harbour City Centre so it can expand

By Campbell McIlroy

Friday 14th December 2001

Wellington icon Kirkcaldie & Stains has entered into the largest deal of its history, spending $29 million purchasing its neighbour, the Harbour City Centre.

The conditional deal announced yesterday is also one of the largest property deals in Wellington this year.

The purchase will be part funded by an underwritten 1:2 renounceable rights issues of new shares to existing shareholders at a price of $3.50 a share, raising $8.75 million.

The remainder will be funded through bank debt and from financial institutions that Kirks are negotiating with.

Kirks chairman Denis Tait said the company was talking to its bankers about how best to split the debt.

The deal adds significantly to the company's debt, which in the annual report released on Wednesday was just $2 million.

But Mr Tait said the property was a self-sustaining asset and would not be a drain on the Kirks business.

He said the company needed to buy the building to protect its future ability to expand.

"If we wanted to expand one department at the moment we'd have to throw another one out to do it, which isn't a very pleasant prospect."

Mr Tait said the company had no immediate plans to expand into the Harbour City Centre and had not even looked at rebranding the building.

"Some will stay and some may go. There's a lot of high-profile tenants in there we think would fit quite well with our business."

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