Apartments sold and slated for demolition
Dozens of apartment owners face an uncertain future after the sale of two Wellington buildings with structural issues and earthquake concerns.
It comes amid warnings that many more earthquake-prone buildings are likely to follow them under the hammer.
Tasman Gardens, a quake-prone building near the city’s National War Memorial, is to be sold for what Stuff understands is about $20 million.
It was put on the market after 41 of its 42 apartment owners decided that repairing the buildings, deemed earthquake-prone and not watertight, would be too expensive and complex, said owners and the agents handling the sale.
Rick Stace, of real estate agency CBRE, declined to reveal who had bought the property but did confirm that it was likely to be demolished and another residential development built on the 4735 square metres of valuable inner-city land.
That may also be the future for another, smaller building in the city.
Tommy’s real estate agent Chris Robinson said the No. 2 Brooklyn Terrace, a complex with six two-bedroom apartments and three garages, is also under offer.
Advertising said the building was earthquake-prone and could be ‘‘a prime site for high-density housing’’. The building had a rateable value of $3.5 million.
Geraldine Murphy, part of the resident advocacy Inner City Wellington (ICW), said the two sales could be the first of many.
‘‘I know there are several others where that [selling up] is now an option,’’ she said.
The group estimates there are at least 40 apartment buildings in the city that are deemed earthquake-prone.
Some owners in those buildings face paying hundreds of thousands of dollars to fix and strengthen their complexes, as well as facing rocketing insurance premiums.
‘‘It’s just too expensive, apartment owners can’t afford it and it’s uneconomic to strengthen the building inmany cases because the costs are so high,’’ Murphy said.
The sale of Tasman Gardens will be a bittersweet end for apartment owner Wendy Booth. It has been her home for nearly 24 years, the last eight of which have been a stressful slog through engineers’ reports, earthquake assessments and lawyers’ letters. Two years ago the owners decided that attempting to fix the building would be too tough on finances and their health.
‘‘We looked at ourselves and thought, we are not developers ... we’re not going
to strengthen, we are going to sell,’’ said Booth, who is also a national executive member of the Body Corporate Chairs’ Group.
‘‘It was a lot of money and not affordable for anybody. Some might have been able to pay it, but the return on the pain, the time – it just wasn’t viable.’’
The sale was complicated, requiring a collective agreement, because it was a majority stake in the body corporate that was put on the market, not the building itself.
Booth did not know how much she would make from the sale. She said it was likely to be less than the $1.2m-$1.5m she believed her inner-city penthouse apartment was worth.
But she said she was happy with the end result.
Murphy said the sales would hit the value of the city’s apartment sector as well.
‘‘Confidence has been undermined by the leaky buildings issue, by the retrospective seismic strengthening issue, the challenges of body corporate.’’
Government inaction and indifference had only worsened these challenges, she said.
‘‘They’ve got their head in the sand. They think that people are so desperate that they’ll just buy and sort out the problems later.
‘‘The Government has to make sure the legislative framework around those building models protects the owners, is workable.’’
Inner City Wellington was planning a meeting with new Building and Construction Minister Poto Williams.
Williams told Stuff the Ministry of Business, Innovation and Employment was working on an evaluation of the earthquake-prone building system, with a result expected early next year.
‘‘This will provide useful evidence to identify any areas of the current regulatory system that could be improved.’’