Block off limits till after further checks

About 1000 office workers are temporarily barred from returning to Wellington's Deloitte House until more extensive structural checks are made on the building, its owner says.

Craig Stobo, chairman of Precinct Properties which owns the Brandon St block in the capital's CBD, revealed more about damage at this morning's AGM in Auckland.

"All our buildings, with the exception of Deloitte House, were cleared for occupation and have in fact now been re-occupied. The initial assessment for Deloitte House at 10 Brandon Street indicates that there has been some damage to building services and fitouts within this building and further assessments are being undertaken over the next two weeks," Stobo said.

Scott Pritchard, Precinct chief executive, said before the meeting that about 1000 people worked in the building which had structural control joints designed to move during earthquakes. A Precinct director, Rob Campbell, said windows "popping" was a response which was expected from buildings in the capital, stressed by earthquakes.


"More investigations are required," Pritchard said of the Deloitte block valued at $50.6 million in Precinct's latest annual report. Pritchard also told how an emergency corporate plan was enacted meaning he knew of events in the very early hours of Monday morning and was quickly in Wellington to assist.

Some Precinct staff had slept in their cars overnight after tsunami warnings yet had been at work on Monday in Wellington, checking on buildings, he said.

Shareholders also heard how Precinct had $1 billion worth of development work under way mainly in Auckland and how the value of its $681 million Commercial Bay has been revised up to $850m.

Stobo said the business was upgrading its portfolio from A-grade to premium buildings and had concentrated on Government tenants in Wellington.

Pritchard said after the meeting that $681m had been the cost of the land, construction and development to Precinct but the $850m figure was the projected end value. Demolition work is nearing an end on the site between Albert St, Customs St, Quay St and sheet steel is being installed around the site perimeter as Fletcher Construction builds the 39-level PwC tower, more than 50 per cent pre-leased.

That is New Zealand's largest commercial project, ahead of the $700m, NZ International Convention Centre by SkyCity Entertainment Group.

Pritchard said new development opportunities past 2020 were envisaged at Wynyard Quarter, additional capacity at Bowen Campus and Wellington and at 1 Queen St in Auckland as part of Commercial Bay, the new precinct which includes the new PwC tower.

"Wynyard Quarter Stage 1 will be our first development to reach completion, with Mason Brothers on target for completion before Christmas. With a net lettable area of 13,400 sqm, the total stage 1 development has an expected yield on cost of 8 per cent and a value on completion of around $100 million. We are very happy with the project and pleased to see the office space 86 per cent leased," Pritchard said.

"Commercial Bay remains our largest development and we are very pleased at how it is progressing. As you will all know, this is a $850 million investment in what will be a 39-story office tower surrounded by a premium retail and dining centre.

"On completion the project is expected to generate an attractive yield on cost of 7.5 per cent. With three years to go until its completion, we are happy with the rates of leasing and strong market interest Commercial Bay is attracting.

"We committed to the project after achieving 52 per cent pre-commitment from premium anchor clients PwC and Chapman Tripp.

"Since then, we have secured a further 6000sq m from outside the portfolio, with MinterEllisonRuddWatts committing to 4000 sqm at the Commercial Bay Tower. We have leased 60 per cent of the office tower by income on a weighted average lease term of around 13 years.

"We expect to lease a further 10 per cent to 15 per cent of office space at this development in the coming financial year," Pritchard said.