CBD buildings hard sell
Timaru's Central Business District buildings may be more difficult to sell since the Canterbury earthquakes, but demand is nevertheless high from tenants wanting to set up shop on Stafford St.
Commercial real estate agent Roger Holding said owners were taking a hit on commercial property sales due to soon-to-be-passed earthquake-strengthening legislation. Many of the city's older inner-city buildings are not expected to meet the new standards.
However, he has people queueing up to lease main street properties, including chain stores from Auckland. "At the end of the day, anyone with any sort of background in business is still buying.
"It's just the ma and pa investors who are backing off at the moment," Mr Holding said.
The earthquake-strengthening policy, due to become law this year, stipulates buildings must have a seismic activity report completed within the next five years, and if they do not reach 34 per cent of the earthquake-strengthening code then the building must be strengthened or demolished within 15 years of the report being completed.
Mr Holding said strengthening costs do not correlate with increased profits, so banks are not willing to provide loans on properties that need a considerable amount of work, and it is only equity-rich investors who are able to buy at present.
Another agent, Peter Wilson, also has a waiting list for businesses wanting main street sites.
Mr Wilson said ultimately it would be the banks and insurance companies that pushed for the new legislation to be enforced, as they would not lend for or insure buildings unable to meet the new code.
Timaru structural engineer Gary Littler said he had completed several reports for buildings on Stafford St but no one had made any decision on what they would do. "I have done a lot of reports, but nothing has changed. It's mainly the banks and the insurance companies asking for the reports [to be done]," he said.
The Timaru Herald