Incentives for foreign rebuild funds mooted
Government incentives to help attract offshore investment into the Christchurch rebuild is just one idea put forward by business leaders who say outside interest in capital projects for the city is growing.
Some investment banks have already been working to attract foreign funds to Christchurch's commercial heart. They say up to $10 billion of private capital, some sourced from overseas, is needed to make a success of a rebuild that has been priced at up to $30b.
Canterbury Employers' Chamber of Commerce chief executive Peter Townsend said there were already investors from countries including Australia, the United States and China sniffing around for opportunities to get involved in the rebuild.
But what most groups were waiting for was the blueprint on the city rebuild to be released by the Christchurch Central Development Unit (CCDU) on July 27 to give an indication of how the investment opportunities would shape up in the new landscape.
The location of a convention centre, sports facilities and other central city infrastructure will help guide those investment decisions.
Townsend said while incentives might be needed, the critical factor Christchurch planners needed to draw in outside investment was that the city itself offered an attractive investment proposition.
"Once we get a blueprint for the central city I'm sure you'll see much more definite approaches by international concerns because they'll know with much more certainty the direction we're travelling in," Townsend said.
Some of the overseas investors had been talking to property developers, and larger construction companies involved in the rebuild. It was likely that the foreign investors would partner with local property investors on some projects, Townsend said.
Tourism Industry Association regional chairman, hotels, Bruce Garrett, said many hotel chain operators that had closed hotels due to the quakes were keen to maintain a presence in the city but they were not the one that usually developed and owned the property.
He noted that Eureka Funds Management, owner of the Crowne Plaza hotel, had confirmed the building would not be rebuilt.
The tourism industry, working on a response to the quakes with the Canterbury Earthquake Recovery Authority, had discussed the need for incentives to encourage property developers to build hotels.
Tim Howe, of boutique investment bank Ocean Partners, said there had been concerns that property investors would shy away from significant rebuild projects because Canterbury tenants would not be able to afford leases pushed up due to the development costs of a new safe building.
Howe said Ocean Partners had lobbied the Government on how the rebuild should proceed, saying it should offer incentives.
The Government could aim to bring in workers from particular sectors, such as the funds management industry, to Christchurch.
"One of the things the Government needs to look at is actually how they can create economic activity ... by giving them a little break to come, then everyone's a winner," he said.
Howe said Ocean Partners had a view that $10b of the rebuild cost would come from local and central government, $10b from insurance and $10b from private sector investors.
There was a significant shortfall in the private sector availability of funding at the moment so work needed to be done to encourage the extra capital into Christchurch.
Ocean Partners was already in touch with potential offshore investors but thought the Government needed to create a special economic zone in the central city.
- The Press