Kennards Self Storage circling Aus Post’s Adelaide Mail Centre
Australia Post is close to striking a deal to sell off the Adelaide Mail Centre to private self storage operator Kennards Self Storage for more than $40 million.
News of the impending disposal comes shortly after the postal corporation, led by chief executive Christine Holgate, said it could defend profitability this year, despite the decline of its letters business.
Australia Post had a near-50% slump in first-half profit and there has been drop in parcel volumes from China to Australia in the wake of the coronavirus outbreak, although this had been partially matched by Australians sending packages offshore. The business relies heavily on its parcels unit, which drives profit, and makes up for the decline in the letters business. The government-owned organisation’s profit before tax dropped to $83 million for the six months to December 31.
Former Australia Post boss Ahmed Fahour had said before his departure that Adelaide Bulk Mail Centre would not be shut down but may be shifted to a new location.
While the property deal may not affect this year’s financial results it is likely to see the long-time Adelaide site changed. However, Kennards is likely to take a sale and leaseback.
Colliers International was last year called in to sell the Adelaide Mail Centre, with the multi- faceted gateway site on Gouger, Grote and Blenheim Streets in Adelaide’s CBD, also drawing developers. The asset sports a strategic land holding of 17,924sq m with an adaptable main exchange building of about 23,128sqm.
Located in the coveted western CBD precinct, the site also carries favourable Capital City Zoning.
Colliers International’s Paul Van-Reesema, Justin Hazell, and Alistair Mackie were marketing the site as a development opportunity. The adaptability of the main building and expansive land holding was pitched as appealing to the market. The site was marketed with a short-term triple net leaseback to Australia Post.
The locality of the Mail Centre forms part of a well-established mixed-use precinct that includes residential, office, showroom, healthcare, education and retail.
This article originally appeared on www.theaustralian.com.au/property.
