Milk the potential: former OAK factory on the market

Known around Australia for its majestic old brick buildings with the giant OAK sign on the roofline, alongside the railway line and the highway in the NSW Upper Hunter Valley, at Muswellbrook, the 8.9-hectare site is back on the market.

And while the sale has immediately sparked a great deal of investor interest, it’s also led to an outpouring of grief on social media from OAK product devotees, fearing the days of the iconic sign – a well-known landmark in the countryside – might well be numbered.

“It’s very early days, but I’d imagine a buyer would keep some of the buildings that are there,” said Selin Ince of Savills Metropolitan, regional sales and insolvency, who’s working on the sale. “There’s no heritage listing on anything in the site, so it does offer lots of opportunities.

“It has light industrial zoning, as well as general residential and recreational use, so it’s a bit of a blank canvas for any buyers.”

With a price guide of $10 million via an expressions-of-interest campaign that closes on March 3, the old OAK factory, built in the inter-war functionalist style, is has two bottling lines, evaporation and refrigeration plant, water treatment plant and a gas boiler, suitable for the production and bottling of various beverages.

In addition to the main building, the site, on Hunter Street and the New England Highway, includes a large warehouse, industrial shed and four residential houses, providing potential for numerous income streams. It has a total lettable area of over 5600 square metres.

The OAK brand began in 1903 at nearby Raymond Terrace and construction of this factory by the Hunter Valley Co-operative Dairy Company started in 1945 to meet the increased milk production from the area and continued through to 1953. It included drying rooms for powdered milk, a butter room, refrigeration, a laboratory and an employees’ amenity block.

Production of flavoured milk started in 1967 from here, with chocolate, strawberry, banana and vanilla malts its core products, later to include iced coffee. Other flavours have been introduced over the years, including eggnog, cookies & cream, cinnamon donut, choc peanut butter, rocky road and one of its latest, banoffee choc top.

The factory closed in 1994 – and OAK was bought by Parmalat in 2009, which was, in turn, bought by French company Lactalis in 2019 – and it was converted into a wine and spirits distillery. The wine company Hunter Wine Services, which produced 4 million bottles a year, exported to 30 countries and was Australia’s biggest seller of wine to Russia, was placed into liquidation in May 2019.

Agents Savills say the factory has all the infrastructure needed to manufacture all spirits and wine, with a maximum daily capacity for 25,000 litres of spirits, and could be easily adapted to produce beer, cider or other drinks.

“It’s in a great location, just two and a half hours out of Sydney, and industrial estates have been trading so well during, and since, COVID,” said Ince. “It has a lot of strong fundamentals and it’s so well known, with the buildings and sign so recognisable.

“We’ve already had a lot of interest as it’s an A-grade offering, with a lot of potential income streams.”