Shortage of quality Wgtn premises

DAVE BURGESS
Last updated 05:00 28/11/2013

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Wellington desperately needs a new corporate-quality office block to take the pressure of the city's ageing commercial building stock, says Colliers International executive director Jim Pinson.

And it may well become a reality with three possible CBD sites, all with harbour views, suitable for a tower block.

Pinson's comments came after The Dominion Post revealed that oil giant BP was looking to move its head office to Auckland.

It has also emerged that Brother International (NZ) Ltd is relocating its Lower Hutt head office and 40 staff to Tauranga where construction on a new $10m office is scheduled to start next month.

Richard Norman, a senior lecturer at Victoria University's School of Management, said students conducting research into regional employment interviewed managers from 113 companies.

One energy sector chief executive said the government and the film industry were not enough.

But even if new companies are lured to the capital, finding quality premises is an issue.

Pinson said the vacancy rate in prime Wellington commercial buildings was just 5 to 6 per cent.

The government had soaked up most of the refurbished office options sitting just below the A-grade buildings, he said.

The premises that are available in Wellington are generally in what Pinson described as the commercial "C-grade sector".

"We are absolutely desperately short of real quality modern offices in the CBD," he said. "We are over-supplied in tired, ageing buildings throughout the city.

"In the next two to three years we need one large-scale, central CBD, corporate-standard office building to be developed. That would take the pressure off everything else."

Property Council NZ Wellington branch president Andrew Hay agreed that a new premium-grade office block was needed in Wellington.

"If a tenant is looking for good A-grade or B-grade space with a floor plate of 11,000 square metres or more, there's no options in the market at all - or no more than one or two at any time - unless they head out of the CBD or accept a lower grade."

The Wellington Company, headed by Ian Cassels, announced plans earlier this year for a monster development in Wellington but did not reveal details.

Sources say the development is planned for the site of the car parking building on the corner of Victoria and Willeston streets. Cassels would neither confirm nor deny the location.

A new website, thinkwellington.com, has been established by Cassels and business consultant Sir Christopher Harris to provide information to businesses considering relocation.

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Another CBD site with potential for a modern office block is the Infratil-owned Z petrol station on the corner of Customhouse Quay and Whitmore St.

Infratil chief executive Marko Bogoievski said the site was owned freehold by Z, but it was getting harder and harder to justify the presence of a service station on a prime location.

The third area ripe for development is North Kumutoto, a prime piece of waterfront real estate between Queens Wharf and the railway station.

The latest proposal, by developer Willis Bond & Co, is for a 25m-high block with a total lettable floor area of about 11,500 square metres.

- BusinessDay

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