Fri 14 Jun

SFM Redevelopment Update

SFM Redevelopment Update

It is with great pleasure that SFM can inform that the shareholders of Sydney Fish Market Pty Ltd (Catcher’s Trust and SFM Tenants & Merchants Pty Ltd) at an Extraordinary General Meeting in April, resolved to endorse the Agreement for Lease that was executed by SFM and UrbanGrowth NSW Development Corporation on 19 February 2019. 

The effect of the resolutions that were passed means that the way is now cleared for the NSW Government to lodge the development application this month and for the processes to proceed for funding approval, hopefully in the 2019 state budget. 

This is an exciting milestone in what has been a long journey and means that the focus shifts from negotiations with the NSW Government to detailed planning and ultimately construction of a new Sydney Fish Market, programmed to be completed in early 2024.

The new Sydney Fish Market will be a world-class facility that will showcase the NSW seafood industry and have short and long term, direct and indirect benefits to catchers.  NSW currently supplies the biggest proportion of seafood to SFM, some 7,040 tonnes or 52 per cent of all the produce traded through the auction. Through redevelopment, the NSW seafood industry has an opportunity to build its reputation for producing some of the best seafood in the world and ensuring local seafood has a home for future generations to enjoy. 

Improved Seafood Trading Facilities 
The redeveloped SFM will be built with world-class retail and seafood trading facilities with enhanced infrastructure such as live tanks and state-of-the-art refrigeration. Improved facilities will help increase the value of seafood supplied to SFM to drive demand and prices which will be a direct benefit to fishers. 

Increased Demand for Local Seafood 
SFM receives over 3 million visits a year and it is estimated that customer patronage is set to double in the coming years. Having a purpose-built facility for trading seafood will ensure that SFM has the infrastructure and capacity to accommodate increased visitation and demand for local seafood. 

Future Financial Viability of SFM
The redevelopment will ensure the future financial viability of SFM. SFM financial modelling indicates that if the development does not proceed the future viability of SFM is at considerable risk due to the need to maintain and remediate a deteriorating site that is beyond its economic life. 

However, the redevelopment will remove the need to incur maintenance costs and will ensure that SFM is in a strong financial position. In avoiding adding maintenance costs of the current site, it is anticipated the net profit before tax will exceed $51 million in total over the first 10 years following completion.

Government Lease Expiration 
The existing lease from the Government for the current SFM site will expire in 2044, with no offer for extension currently in existence. If the new development proceeds, SFM will have a lease over the new site until 2044 plus the option of further three by 10-year extensions available, totalling in excess of 50 years. The lease agreement for the redevelopment will ensure security and longevity for seafood trading into the future.

Impacts of Potential Changes to Fisheries Management
Entering into a new lease agreement will provide a level of security for any potential changes to NSW fisheries management that could impact catchers. The new lease provides a mechanism for SFM to seek compensation in the event that the NSW Government changes any laws to alter fisheries management. The lease states that in the event of changes to the control and management of fisheries, the entitlement of fishers to operate, or regulation of fish marketing in New South Wales, SFM must enter good faith negotiations with the Landlord to determine the impact on the income of SFM for consequential amendment to the rent for the balance of the lease term.

Obligations to Industry
Through the process of redevelopment negotiations, the NSW Government has emphasised the importance of the NSW seafood industry and their contributions to the success of SFM. With a vision of SFM fulfilling the role as the masthead for the seafood industry, the NSW Government has set out some obligations for SFM to ensure the business carries out its responsibilities to the best of its ability and in the interest of the seafood industry. 

In an effort to showcase the diversity and quality of product traded at SFM, the new lease includes an obligation on SFM to use the wholesale areas for a wholesale fish market that can be viewed by the public to encourage increased interest and raise the profile of local product.

The lease also acknowledges the benefit that SFM provides to the community and regional fishing communities that depend on SFM. According to Deloitte Access Economics, by trading seafood and attracting tourism, SFM contributes $41 million in value added and supports 254 jobs in regional NSW’s fishing and tourism supply chains. 

Having identified the role SFM plays in the broader community, NSW Government wants to ensure that the business remains accountable and has set the obligation that SFM must also report annually to the Government on its activities and contributions in supporting the fishing industry. This obligation is assurance for catchers as there is a requirement that seafood trading at SFM must continue to benefit NSW’s fishing supply chain and an expectation that the benefits to the community will increase upon completion. 

Industry Storytelling and History
Sydney Fish Market’s vision for the new market includes paying homage to the industry by showcasing the history and stories of the NSW catching sector. Consultation has commenced on this project which seeks to showcase the stories of the industry in an innovative way with the aim to improve social licence and public understanding of the industry. While the format this will take is yet to be finalised, it is likely to take the form of a combination of digital images and video footage, artworks and interactive experiences around the site.

Socioeconomic Benefits
Studies by Deloitte Access Economics and Stafford Strategy commissioned by SFM found the redevelopment would have numerous benefits to local and regional communities. Key findings of the study found that development could deliver:

The next stage of the project is the lodgement of the DA which is expected to be announced in the coming weeks.  SFM will continue to share project updates as they are announced.