‘Seven towers’ of empty offices

Press, 22 July 1989, Page 1

‘Seven towers’ of empty offices

By

GLEN PERKINSON

Christchurch has an office space surplus equal to the area of seven tower blocks, figures given to “The Press” show.

Add to that vacant retail space and the figures grow. Total unlet commercial space in the city’s C 2,3, 4 and 5 zones is about 13 ha — about the size of 20 full-sized rugby fields. A soon-to-be-released report on office floorspace levels shows a vacancy rate of 12.3 per cent. A survey by Rolle Associates, real estate consultants, shows more than 70,000 sq m of office space is empty. That is equivalent to more than seven buildings the size of the Clarendon on the comer of Worcester Street and Oxford Terrace.

The City Council’s floorspace growth figures unveil a worse situation.

About 10 per cent of the central city’s 1.4 million sq m of office, retail and warehouse space is unoccupied, it says. That is equal to 13 ha — a vacant space which would stretch from Lichfield Street to Bealey Avenue bounded by Montreal and Barbadoes streets.

A council planning officer, Mr Darryl Millar, said the 10 per cent vacancy rate was a “rough estimate.”

Rolle’s manager, Mr Lance Collings, said his firm’s survey was, however, “a two-week, painstaking survey of all the central city’s offices.” Mr Collings said there was almost 600,000 sq m of office space in the inner city. Newlybuilt offices were around 34 per cent empty while those built before the mid-80s boom had a

vacancy rate of only 6 per cent. Although the figures looked bad, Mr Collings said Christchurch compared well with Auckland and Wellington where vacancy rates were 14 and 11 per cent respectively. Property commentators spoken to yesterday said the high volume of empty space would diminish in the next year. Robt Jones Investments’ South Island manager, Mr Rick Keeling, was optimistic that the area of empty offices would be halved by the middle of 1990. The managing director of Robert Brown United Realty, Mr Robert Brown, disputed the high vacancy rate. He thought the volume of unlet space would be closer to 8 per cent. Mr Gary Sellars, a partner at Fright Aubrey, valuers and property consultants, said the real concern in the market would be among the owners of older buildings.

He expected the larger, new buildings to fill and landlords of older, pre-boom stock to be left with empty floorspace. A partner in another property consultancy, Darroch and Co., Mr Chris Barraclough, thought as newer buildings filled developers would stop offering rent holidays, fit-outs and cash incentives for tenants.

That would see some prospective tenants elect to remain in older premises because new stock would become too expensive.