THE BUZZ IS BACK IN THE CBD


DEVELOPERS ARE ON THE JOB AGAIN IN WELLINGTON'S CENTRAL BUSINESS DISTRICT WITH A RAFT OF OFFICE, MIXED USE AND EDUCATION PROJECTS UNDERWAY OR IN THE PIPELINE. NEIL PRENTICE INVESTIGATES.


One of the best indicators of property market confidence and activity is the quantity of cranes that can be spotted across a city’s skyline. After a long period of limited construction activity, the boons are back in the Wellington CBD and scaffolding firms are being kept busy supplying a variety of jobs around the city. At this stage much of the activity is centred around refurbishments and retrofits. “This is being driven by occupant demand for better earthquake protection but also by some significant repositioning and centralisation in the government  tenancy sector – which is always a big driver of the Wellington CBD office market,” says Luke Kershaw, who specialises in CBD office leasing for Bayleys Capital Commercial with colleague Luke Frecklington.

However, there is also new building activity on the horizon, with strong tenant commitment ahead of construction commencing on two new office builds overlooking the waterfront. Luke Frecklington says this suggests that there is an appetite within the private sector for fresh premises that offer a market-leading branding opportunity. “Also encouragingly, for those market observers who believe central Wellington has under delivered on its education potential, tertiary providers are upping the ante as well in the CBD."

Here are projects either in progress or soon to be started:

Massive redevelopment on The Terrace

The largest office redevelopment project currently being undertaken in the CBD is NZX listed Kiwi Property’s $72 million refurbishment and expansion of 46-year-old former Unisys House at 56 The Terrace. The building is undergoing a 21-month rebuild prior to the Ministry of Social Development commencing an 18-year lease over 24,255m² in August 2016. Unisys House comprised two adjoining properties, a 19-storey office tower constructed in 1968 and the eight-storey Aurora Chambers annex added in 1975. Building contractor LT McGuinness has demolished the annex and the construction of a replacement structure is well underway. Strip-out of the main office tower floors is complete and fitout works have commenced on some floors.

The complex is being modernised to an A-grade standard, with building systems upgraded and new window systems fitted. Seismic strengthening to 90-100% of New Building Standard (NBS) from the previous 70% rating is also being undertaken. The project will extend the complex’s net lettable area by approximately 10 percent, providing floor areas of up to 1,800m². Kiwi Property bought the property in April 2004 for $44 million and its book value is projected to grow to over $130 million by 2018.

Full-Motorway-elevation-Molesworth-St-16K-Apr-14-webMinistry of Health’s new HQ

The former William Clayton Building in Thorndon, the first office block in the world constructed using lead-rubber base isolators for earthquake protection, is undergoing a complete rebuild and expansion for occupation by the Ministry of Health under a new 15-year lease agreement with the developer and owner Balanced Investments Ltd. Located overlooking the motorway at the northern end of Molesworth Street, the property was acquired by Balanced Investments from AMP in 2011 for $14 million. It is almost doubling the previous office space to 15,500m2 for use as the head office of the ministry which will be centralising from three buildings.

Following two years of negotiations over the lease terms, work commenced late last year with Fletcher Construction principal contractor, Beca and Studio of Pacific Architects project consultants. Balanced Investment’s Mike McCombie says the $30 million project is basically a new build from the ground up with only the foundations retained. The pioneering base isolation system, installed in the early 1980s, is being upgraded to increase its horizontal movement capability from 150mm to 400mm and will contribute to the building’s seismic rating of 150% of NBS. Floor sizes are being increased to 2,850m2–2,900m2 and will provide energy efficient office space over five levels with basement parking for 70 cars. Construction is scheduled for completion in October next year.

Rutherford-Facade-Perspective-webVictoria University increases its footprint

Victoria University is continuing to expand its presence in the CBD commencing a two-year redevelopment and extension last December of Victoria Business School on its Pipitea Campus adjacent to the Railway Station and the new bus terminus. A new six-floor annex is being added to the Featherston Street side of Rutherford House to provide more modern teaching spaces along with a new library. The ground and mezzanine floors on the Bunny Street and Lambton Quay side of the building are also being extended and reconfigured to provide informal learning and teaching spaces and retail facilities. Director of campus services Jenny Bentley says this will also be a social area, similar to the award-winning Hub at the Kelburn Campus, and will be a focal point for engaging with surrounding business and government communities.

She says the expansion of Pipitea Campus, which caters for approximately 6,000 students studying law, government and commerce subjects, will contribute to the university’s goal of nearly doubling in size over the next 20 to 30 years. The university is also currently redeveloping its Te Aro Campus on Vivian Street, housing the Faculty of Architecture and Design. That work encompasses a reconfiguration of the ground floor, including a new entranceway, refurbishment of upper levels and some strengthening work.

Cuba-Dixon---for-Bayleys-UPDATED-webBig mixed use development for Cuba Quarter

Also anchored by an education tenant is the first stage of a substantial redevelopment by Willis Bond & Co of a one hectare site on the corner of Cuba and Dixon Streets in the heart of the Cuba Mall retail precinct. Work has started on a brand new six-storey building, housing approximately 1,000m2 of retail space and Cuba Central which is the working title for a new tertiary education campus for Whitireia New Zealand and the Wellington Institute of Technology (WelTec). The 9,000m2 campus will accommodate more than 1,000 New Zealand and international students and bring the two tertiary providers’ creative technology and arts programmes together.

The heritage façade of the former Deka building on the corner of the site will be retained, strengthened and incorporated into the new building’s structure, designed to 130% of NBS. Construction is scheduled for completion in November 2017 with new retail spaces available from mid-2016. Willis Bond & Co is already reporting strong enquiry for the retail spaces because of the property’s pivotal corner position. Willis Bond & Co’s managing director Mark McGuinness says the project will be the first part of a complete overhaul of one of Wellington’s biggest development sites. “It will play an important role in the future growth of the Cuba Quarter, as well as the city itself.”

New on the waterfront

Willis Bond & Co will also develop a new 10,000m2 office and retail building on what it describes as the CBD’s last prime waterfront site. It will be located on Site 10 on the central city waterfront, adjacent to the Waterloo Quay apartments, on 2,500m2 of land. Designed by Athfield Architects, the building will comprise four levels of A-grade office space, each with a net lettable area of 2,200m2–2,400m2, above a ground floor of retail and public spaces. Basement car parking will also be available for tenants. “The design responds to increasing demand from businesses for well located, high quality office buildings with large, flexible floor areas which enable them to maximise operational efficiencies,” says Willis Bond & Co’s project director David McGuinness.

Site-10_Cam1P-webHe says the project has already met with strong market take up with 75% of the office area already leased well ahead of project commencement. A resource consent application for the development has been submitted with construction expected to commence in 2016 and be completed by mid 2018. The base-isolated design will provide a building of around 180% of NBS. The ground floor will incorporate publicly accessible space, including a large open lobby area and retail outlets. There will also be smaller office spaces at ground level for start-up or creative companies.

BP House makes way for new $80m building

Demolition work has commenced on the former BP House at 20 Customhouse Quay, on the corner with Johnston Street, which will be replaced by a new $80 million 14-level office building also overlooking the waterfront. The BP building, which was built in the late 1960s, had to be vacated after its stairs were severely cracked in the 2013 earthquakes centred near Seddon and BP has relocated its head office to Newmarket in Auckland.

A joint venture partnership between Wilton Capital and Auckland-based Newcrest Group is developing the new 5 Green Star 15,000m² building, expected to be finished in September 2017. It has already secured two anchor tenants – Deloitte and IAG New Zealand – for approximately half of the space. Designed by Studio of Pacific Architects, the building will have 1,280m² rectangular floors and two levels of basement car parking. Engineer Alistair Cattanach of Dunning Thornton Consultants said it will be the tallest building in New Zealand to be built on base isolators which, in combination with its diagonally braced diagrid perimeter columns, will give it a seismic rating of 180% of NBS.

Facelift for former newspaper site

McKee Fehl is undertaking a $20 million redevelopment and expansion of the former Dominion Post complex at 22 Boulcott Street for occupation by Transpower. The project will see the premises being completely transformed to provide over 8,400m² of office accommodation.

The property dates back to the 1920s with extensions made in the 1960s and late 1980s. The existing structure, including parking levels, will be retained with strengthening bringing the seismic rating up to 100-130% of NBS. Three new levels of office space will also be added on top of the existing structure at the southern end of the site.

“The property actually comprises two buildings and we’ll be running a new glazed atrium through the juncture between them to improve their connectivity and bring more natural light into the heart of the complex,” says McKee Fehl general manager Stephen Cummings. McKee Fehl is targeting a 5 Green Star office rating as well as a NABERS NZ rating for energy efficiency. Transpower will be relocating from its current locations at 93 and 96 The Terrace, with a scheduled occupation date of September 2017.

Apartment hotel takes shape

Further down Boulcott Street, near the intersection with Willis Street, work is well advanced on a $15 million mixed use building between St Mary of the Angels Church and the St George Hotel. Six of its eight levels will be used for serviced apartments, with two three-bedroom penthouses on top. These will all be leased to Village Accommodation Group, a well established accommodation provider which operates five other apartment hotels in the city. The ground floor will have 250m2 of retail or restaurant space, and the first level will have boutique conference facilities. The project is being developed by Boulcott Village Properties headed by developer-director Mike O'Sullivan.

Xero-building-webNew look for Xero

The Wellington Company is about to start work on a 7,000m2 office development for NZX listed software company Xero on the corner of Taranaki and Wakefield Streets in Te Aro. The $35 million project will be a redevelopment of the former 1920s’ built Manthel Motors building. Xero has occupied the building since 2013 and staff have been relocated to other The Wellington Company buildings in preparation for the gutting of the two-level premises.

The building’s heritage-listed façade will be incorporated into a new 5-level steel-framed office building which will take 18 months to complete and will be leased to Xero for 12 years. In a first for Wellington, the floors above the existing building will be sheathed by a semi-transparent outer skin fabric called Stamisol. “Our design philosophy is to mirror the bulk and form of the Manthel Building with a simplified reflection above,” said building designer Neville Parker of Inside Design. “We’ve designed a screen of semi-transparent mesh that covers most of the upper building. This material creates a layer that is opaque from the outside in bright sunlight and becomes almost transparent at night. It’s a giant sunscreen.”

He said the fabric would soften and simplify the exterior of the building and reduce solar heat gain, improving energy efficiency. Xero is looking to house up to 650 staff in the new building.

REFURBISHMENTS AND RETROFITS


There are a number of significant office refurbishment projects being undertaken around the city, most of them encompassing earthquake strengthening. These include:

NZ POST building. A $40 million refurbishment is being undertaken by Hawkins Construction for NZX listed Argosy Property which bought the building on Waterloo Quay for $60 million in 2013. The 14-storey 25,000m2 complex is undergoing a complete refit, including the replacement of its air-conditioning system plus seismic strengthening, which will upgrade it to A-Grade standard. NZ Post and Kiwibank, which lease the entire building, remain in occupation during the refurbishment scheduled for completion in late 2017.

PUBLIC TRUST building. The refurbishment and strengthening of this central Wellington landmark on the corner of Lambton Quay and Stout Street is nearing completion. It is being undertaken by McKee Fehl, whose owner Maurice Clark has set the benchmark in the Capital for meticulous restoration and retrofitting of heritage buildings. In a major coup for the 107-year-old baroque-style Edwardian building, a Jamie Oliver Italian restaurant has been secured as a tenant. The upper floors are being fitted out for the Ministry of Culture and Heritage’s arrival in October. McKee Fehl is also undertaking a seismic upgrade of Craigs Investment Partners House on the corner of Customhouse Quay and Johnston Street.

33 BOWEN STREET. This 12-storey office block is undergoing a major refurbishment in preparation for the Ministry of Education’s relocation of its head office to the property owned by Talavera Property, a subsidiary of the Australian Vinta Group. It has taken a 15-year lease over 13,179m2 vacated by the Ministry of Business, Innovation and Employment.

THE HARCOURTS building. An eight-level office and retail building on the corner of Lambton Quay and Grey Street is being refurbished by property developer Mark Dunajtschik after the Environment Court backed Wellington City Council’s rejection of his proposal to demolish the earthquake-prone premises. They were constructed in the late 1920s for insurance company T&G. Heritage specialist Glen Hooker, now project director of the cheekily named Marks Folly Ltd, is overseeing the refurbishment project which will see the structure strengthened “as near as practicable” to 100% of NBS.

MAJESTIC CENTRE. Kiwi Property is nearing the end of its complex five-year seismic strengthening and refurbishment of the 21-level Majestic Centre at 100 Willis Street, set for completion mid 2016. The upgrade involves the addition of over 1,300 cubic metres of concrete, 180 tonnes of reinforcing steel, 457 tonnes of structural steel, 20,000 bolts, 32,000 anchors, and 53.2 kilometres of post tensioning strand. The work to bring the building up to the equivalent of 100% of NBS is being undertaken while it remains operational and tenants go about their daily business.