One reason Weis move is bad for owner
FOOD giant Unilever will have difficulty offloading the historic Weis ice-cream factory because of its limited appeal as a commercial site and the exorbitant costs involved to convert it into a residential estate.
That was the consensus among commercial real estate valuers after Toowoomba residents were left reeling after Unilever announced it was closing the site which has been making Weis ice-cream bars for more than 60 years.
Unilever's decision to manufacture the ice confectionery at their NSW plant will result in the loss of 93 local jobs.
It also breaks a promise made to the family that sold the property for $11 million in 2017 that it would remain open.
A residential estate sits on the doorstep of the 2.73ha property, which is within 300m of Downlands College and less than 1km from a suburban shopping centre.
Despite seemingly being ideally placed for residential development, commercial real estate expert Dan Dwan said the plant would most likely remain an industrial operation.
The managing director of Colliers International Toowoomba said it was very specialised asset and a quick sale was highly unlikely
"The facility is very specialised in nature, with a lot of cold room type, or climate controlled, facilities and production floor which reduces the market for those type of assets," Mr Dwan said.
"It's also potentially a residential site and that's one of the alternative uses, but you would suggest there would be more valuation out of reconfiguration or repurposing the existing facilities."
Placing any type of value on the property was fraught with danger for a number of reasons, not the least was what a prospective buyer had in mind for the land and the cost of removing, or reconfiguring, equipment and buildings, Mr Dwan said.
Although Unilever paid $11 million for the site, in 2017, the site has a land valuation of $2 million, according to RP Data records.
"It was only in 2017 and the market probably hasn't shifted but it is hard to determine how that sale was assessed at the time," Mr Dwan said.
Herron Todd White director Bradley Neill said the area was in transition from commercial and industrial to residential uses and it was also located near a railway line.
"Arguably I would be considered a secondary location for residential use.
"Given the size and scale of the structure that is there, I believe that a likely purchaser would see the value in those improvements given the significant costs essentially to knock them down.
"It's a factory that has been developed over many years to have a state-of-the-art ice cream manufacturing facility and it's highly specialised in its designed."
The factory is located in the suburb of Harlaxton which has more than 2,500 residents and the median weekly household income is $925, according to the 2016 census
A local agent, who did not want to be named, said it the area was low socio-economic and the property was unlikely to break any sales records even if it was being purchased for residential development.
"It's a tough spot - a railway goes around it. Not an appealing part of town, either, with a bad reputation," they said.
"The government land value of the site $73 per square metre, or $2 million. It wouldn't sell for a cent over that."