As advised to the shareholders of Smiths City Group in its annual report for the year ending April 30, the directors have engaged Colliers International to investigate market interest in the Colombo Street property, including the possible sale and leaseback of the property.

The company is pleased to advise that Smiths City Properties (one of its subsidiaries) and the owner of the Colombo Street property have entered into a conditional agreement to sell that property. In addition Smiths City (Southern), another of its subsidiaries, and the main retail trading arm of the group, have conditionally agreed to enter into a lease in respect of the property from the new purchaser.

In terms of the sale the subject property is located at 550 Colombo Street, Christchurch. The sale price is $20 million plus GST. Settlement will be September 18 conditional on satisfaction of the further terms in the agreement.

There is a due diligence condition and lease approval condition both inserted for the benefit of the purchaser within 10 working days. The agreement also contains conditions requiring the approval of the transaction as a major transaction by both vendor Smiths City Properties and the shareholders of Smiths City Group. In terms of the latter approval, this will be put to shareholders of Smiths City Group at its annual general meeting to be held on August 25 in Christchurch.

With regard to the lease, the commencement date is to be aligned with settlement of the property and rental is $1.409 million per annum plus GST and outgoings. The initial term is for 12 years, with two further rights of renewal of six years each.

This transaction is also subject to the approval of Smiths City (Southern) and the shareholders of Smiths City Group as major transactions.