Government to sign CBD office contracts

LIZ MCDONALD
Last updated 05:00 16/04/2014

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Public servants could be back in central Christchurch by next spring, with the Government on the verge of signing deals for four new buildings.

A total of 1700 office workers are going into leased buildings in Cashel and Hereford streets as part of a Government plan to help kickstart the central city.

The buildings will be privately built, and the chosen developers have told The Press they expect final contracts within weeks.

Siteworks for one building have started and final design work is being done on the others, with building consent applications being readied to go to council.

The Press understands two of the office buildings will form Lichfield Holdings' $100 million Cashel Square development in the City Mall.

The first, facing Hereford St, is under way and is due to be finished by August next year, and the other will be ready by the second half of 2016.

The other offices will be in Devonia Holdings' planned $30m glass-fronted building on the former National Bank site at 164 Hereford St, and in a $70m tiered building on the former Grand Chancellor hotel site owned by the hotel chain at 141 Cashel St. Both are due for completion by mid-2016.

All the buildings will accommodate private office tenants plus shops and cafes at ground level. They will be five, six and seven storeys tall.

One of the landlords involved said the Government had "screwed them down" on rents he called too low to be profitable, while another agreed the Government had played hard ball "as it should", but described the agreed rents as at the low end of feasible. One landlord said the negotiations had involved 10 times the usual paperwork and government documents hundreds of pages thick.

The agreed annual rents are understood to be less than $400 a square metre, plus operating expenses.

Commercial real estate agent Jonathan Lyttle of Colliers described rents of under $400 as "a bit light" in the face of land and construction costs, and said landlords on less-central Victoria St were getting more.

Last year State Services Minister Jonathan Coleman announced plans to save taxpayers $110m annually on rents in the next three to four years, mostly by slashing its space requirements for public servants.

Other sites short-listed but rejected for Christchurch public servants include the former BNZ site in Cathedral Square, and Awly Developments' building going up on Durham St.

Twenty Government departments will take 24,000sqm at the sites, including the Ministry of Social Development, ACC, Statistics NZ, Ministry of Business, Innovation and Employment, Ministries of Health and Education, Housing New Zealand, and the Departments of Internal Affairs and Conservation.

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No announcements have yet been made about who will go where within the four buildings.

- The Press

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