Government signs ‘astronomical’ office lease
Statistics New Zealand may have taken the most expensive government lease in the country, as it raced to secure office space after the November earthquake.
Documents show the government department is paying close to $800 per square metre for a two-year lease across four floors in Westpac House on Wellington’s Lambton Quay.
The building is owned by Michael and John Chow, whose business interests span commercial property to brothels.
The price is more than double what some other tenants are paying for office space in the 1974 tower, and is well above the roughly $500/sqm that lease experts said corporate tenants pay for leases in the best Wellington office towers.
Both Statistics NZ and the Chow brothers argue the price is inflated because the lease is short term and much of the space is serviced offices.
But a spending watchdog says serviced offices are aimed at small businesses willing to pay a premium for leases as short as a few weeks, not large government departments.
Jordan Williams, executive director of the Taxpayers Union, said the cost of the lease was ‘‘astronomical’’ and Statistics NZ appeared to have been ‘‘out negotiated’’ by the Chow brothers.
While terms of leases are usually confidential, detailed information was contained in documents released to potential buyers when the Chows announced plans to sell Westpac House this month.
A tenancy schedule showed Statistics NZ signed up for 2338.79sqm, at an average rate of $793.95/sqm.
Two of the floors were leased to Statistics NZ for about $450/sqm, which experts said was not unusual for shortterm leases of comparable office space.
The remaining two floors were leased to the department for $930/sqm and $1280/sqm.
Statistics NZ said the cost of the lease was at the ‘‘higher end’’ of the 15 buildings it viewed.
The Chows had presented Statistics NZ with an ‘‘all or nothing’’ deal.
‘‘The Chows offered us a package deal of all the floors we took. We could not pick and choose which parts we wanted given the market at the time,’’ a spokesman said.
John Chow dismissed comparisons to other leases in the building, because Statistics NZ had taken the entire serviced office space.
Williams said the Taxpayers Union believed the lease may be the most expensive of any government organisation in New Zealand.