The countdown is on. The demolition of the esplanade shops is less than a month away, with all tenants instructed by owner Watpac to vacate their shops by January 31.
And in good news for locals, visitors and Coolum’s business community, Watpac managing director Greg Kempton said the company intends to begin work as soon as possible.
“Come the end of January, we’ll knock the shops over and be straight into rebuilding, with a view of having leases in place, tenancy fit-outs done and the shops open before the Christmas period,” Mr Kempton said.
“It would be nice if it was quicker than that but it’s just not physically possible.
“At the moment we’re in the market sorting out sub-contractors and finalising design.
“We’re wanting to have it up and running; it’s a dead investment for us like it is.”
This week Watpac informed the Australian Securities Exchange that it had renegotiated its existing finance facilities with the ANZ for an additional two years, maturing in December 2010.
Watpac has approximately $216 million of group debt of which $199 million relates to the group’s property development activities.
The balance relates to plant and other assets.
Mr Kempton said the refinancing would not have an impact on the $20 million Coolum esplanade development.
“The refinancing covers most of our properties; it will refinance the purchase of what we’ve got there already. But the development side of it, we fund under a construction package, which is outside that,” he said.
“Whether it is on-sold or whether it’s held as an investment, what happens will pay the debt associated with the construction.”
Last month Watpac downgraded its earnings forecast for this financial year to between $15 million and $18 million, compared to last year’s record profit of $39.1 million.
Mr Kempton said there had been “quite a bit of interest” in the new development from prospective tenants, with “between a third and half” of the leases already signed.
But there have been some complaints from local businesses and current tenants that the rent for the new shops will be double the present level, with the asking price about the same as Mooloolaba rents.
Local tourism has already suffered because of delays to the redevelopment.
With uncertainty over the start date, many regular visitors had cancelled their annual Coolum holidays and booked elsewhere.
The uncertainty regarding tenure in recent times has also seen many tenants move on, leaving empty shops and a deserted, derelict appearance for Coolum’s prime position.
Mr Kempton said the new development would bring “a level of retail” to Coolum that lifted the market.
“If you look at the Mooloolaba strip, and if you look at Noosa and those areas, they have a quality of tenant that supports the surrounding lifestyle but also supports tourism,” he said.
“That’s what we want to do in Coolum.
“So we don’t just want to have KFC fast food shops. What we want to do is bring the level of retail shopping that supports the betterment of Coolum.”