Wellington’s massive shutdown
Occupiers must relocate while quake damage assessment is carried out at 16 closed buildings in the city
Nearly 17ha of Wellington CBD office floor space spread across 16 separate buildings is now closed to 50 tenants after last month’s earthquake, say experts.
Zoltan Moricz, CBRE’s New Zealand head of research, and Richard Carr, its research analyst, have released a detailed report showing the scope of the damage and a list of the 16 buildings hit by the quake.
“While the precise scope of damages and their ongoing effects are still being assessed, currently it is believed that 16 buildings comprising 11 per cent or 167,300sq m of Wellington CBD’s total office building stock, have been closed to occupiers — 47 per cent of this space is classified by CBRE as prime quality stock,” the report said.
“Across the 16 buildings, there are 50 different tenants,” it said, citing IRD with just under 28,000sq m of office space losing the most area.
Some buildings will be out of stock for a few weeks while others will be removed for more than six months.
A list of top tenants affected shows major Government entities and big corporates, including Vodafone.
In the past three weeks, there has been a big flurry of activity as large occupiers try to find accommodation while their buildings are shut. BNZ has been the most active, finding new space in six different buildings throughout the city.
“All six locations are within the CBD, representing 11,500sq m which is around 56 per cent of the prequake space requirement,” the report said.
But some large Government occupiers such as IRD and the Ministry for the Environment have not committed to any new space. “It is currently believed that the Asteron Centre where the majority of IRD is housed will be re-opened just before the end of the year so no substantial leasing will be required but that does not address the space which has been lost in the Deloitte Building,” the report said. Vacancy rates in Wellington will reduce due to the reduction of building stock.
“Investment within the city has slowed which is a predictable response to any natural disaster. Investors are reassessing the market and are unlikely to make any new deals before the end of the year as December is a traditionally slow period,” the report concluded.
But the investment freeze is expected to be short lived. More relocations of Wellington CBD office tenants this month are predicted as tenants learn more about how their buildings performed in the earthquake, how long shut buildings will remain closed and how extensive future strengthening programmes will be, the CBRE report said.