Developer has eye on rent crisis
High-profile property developer Ian Cassels has bought a multistorey office block in central Wellington to convert it into student accommodation.
The Wellington Company managing director bought the 2500-square-metre Boulcott St building for more than $3 million.
The five-storey building, known as ComSmart House, is fitted out with offices; however, it will eventually be converted into student accommodation.
Cassels said ComSmart House would not be the last building converted for student use in Wellington.
‘‘The situation’s clearly quite desperate, with students who’d rather study in Wellington, having to relocate to Palmerston North and Hamilton,’’ he said.
Rising inner-city property prices demanded a return on investment, which made flats unaffordable for students, he said.
‘‘We saw this coming years ago and realised that converting surplus office buildings was one of the few workable solutions.’’
The latest acquisition for The Wellington Company adjoins the former Conservation House of 4400sqm, also bought for student accommodation and syndicated to investors in 2012.
Gollins Commercial principal Chis Gollins, who negotiated the off-market sale, said the decision to convert the 1980s building was part of a growing trend of turning former office buildings into accommodation for students enrolled at Victoria and Massey universities.
"The situation's clearly quite desperate, with students who'd rather study in Wellington having to relocate to Palmerston North and Hamilton." Developer Ian Cassels
One of the latest conversions was the TelTower on Willis St. Construction firm McKee Fehl, which is owned by Wellington engineer and developer Maurice Clark, completed the transformation in 2017, making it the company’s fourth building over the past five years to be converted to student accommodation.
TelTower, plus the three other projects, increased the total number of rooms available to students to 1130.
Despite this, thousands of university students are still struggling to find places to live before class starts next month.
The likely growth in students taking advantage of the Government’s new first-year fees-free arrangement is expected to compound the city’s rental crisis.
Flat hunters’ fears that a room in the capital could cost $200 per week were supported by data from the Ministry of Business, Innovation and Employment showing average rents of $482 per property last month.