Please, come back: $2.4b landlord appeals for businesses to return to CBD offices

Please, come back. That's the message from the chief of New Zealand's largest A-grade commercial landlord to businesses who are allowing most or all staff to work from home.

Scott Pritchard, chief executive of Precinct Properties, which has a $2.4 billion market capitalisation, wants business chiefs to reconsider sending staff home during the pandemic, saying the consequences for Auckland and Wellington's CBD were dire.

The Government's Covid response and many CEOs' decisions counter Pritchard's impassioned stance. Thousands of New Zealanders are encouraged to work from home during the outbreak if they can.

"With the number of Omicron cases rising, New Zealand has stepped up its response to the pandemic to slow the spread of the virus and keep our health service and communities protected," says the Government's United Against Covid-19 website. "We are now in Omicron phase 2."

Pritchard said Precinct had given tenants around $16 million in rent breaks and abatements in the last two years but he wants to see an end to empty buildings and now is the time for businesses to step forward and take more of a leadership role, he thinks.

He won't say which buildings are empty or what businesses told all staff to stay home but says it's common enough to hit inner-city life.

"I don't want to name and shame but there are a lot of organisations that sent everyone home. In Commercial Bay we might have 8000 people here usually, but at the moment it's only 3000 - but at least it's 3000. There are a number of buildings around town where no one is occupying them and that's a real shame," he said after the company's interim result was out today.

Precinct owns the new $1b PwC Tower which he says has higher occupancies during the pandemic than many other buildings due to its quality.

In the result, Pritchard announced a $1b deal with a Singaporean government entity, to be called the Precinct Pacific Investment Partnership. Precinct will have a 24 per cent stake in that and manage the business for the Singaporeans.

But on empty offices, Pritchard said the consequences were dire.

He wants us back: Scott Pritchard of Precinct. Photo / Viva

"The amenity might not be there when people want to return," he said of the good things about city life that draw people to CBDs including shops, restaurants and bars.

"There's an opportunity for business to support the small end of town that is really struggling right now. They need to be supported by larger businesses having some of your workforces in the office because there are safe ways to do it. It's a very easy decision for a business just to send everyone home," he said.

Buildings in the two blocks between Albert St/Quay St/Queen St which Precinct owns usually have the highest working population of any one area of New Zealand.

Around 10,000 people are normally in those buildings including PwC and the HSBC Tower. Now, only 3000 are there now, maybe 4000, Pritchard estimates. But other areas of town are even worse off.

"I think our occupiers in the Precinct portfolio are doing well because at least they're there.
There are numerous businesses that sent everyone home which doesn't help our small businesses," he complained.

"There's an opportunity here for big business to review the workplace settings if they have everyone at home. Tradies and school pupils don't have that opportunity.
I support advocacy on it," he said.

Upmarket international restaurant Saxon + Parole shut last year in Commercial Bay around the same time Euro owner Richard Sigley​ announced he would close the 22-year-old Princess Wharf restaurant and bar, Euro.

The Herald reported last month many businesses telling staff to work from home after New Zealand moved back into the red Covid setting.

While some large corporates today shifted to a staff off-site model, others said they were operating under more of a hybrid system, meaning a limited number of staff would work from the office.

The red setting allows businesses to remain open and domestic travel to continue, but includes mask-wearing and gathering restrictions to under 100 to help slow the spread of the virus and keep pressure off our health system.

In January, Vodafone asked all staff to work from home until further notice under the red traffic light setting.

"Retail stores remain open as normal for our customers with social distancing, mask-wearing and sign-in requirements in place," it said last month.

Spark New Zealand also said that to keep its staff and customers safe, it was operating in a hybrid manner, with a mix of working from home and days in the office, with additional health and safety measures in place.

Andrew Stringer, CBRE New Zealand's senior managing director, said last month: "Our offices remain open however all our team throughout New Zealand the opportunity to work from home, primarily as a business continuity response because we don't want entire teams to be potentially classified as a close contact under the current rules and have to isolate all at the same time."

ANZ, the country's largest bank, said it most of its office staff had returned to working from home in January under the red setting apart from a small number of essential staff who were working in its corporate sites with protection protocols in place.

The offices of IAG - New Zealand's largest general insurer remained open during both the orange and red settings. But Louise Harvey-Wills, IAG Executive general manager business partnering NZ, said there was no expectation that team members return to its sites during January.

A spokesperson for New Zealand's biggest supermarket chain, Foodstuffs North Island, said all distribution staff were on-site at Māngere in late January and many people were also working the support centre or head office. All up, around two-thirds of the total workforce at The Landing were in the distribution centre, she said.

Fletcher Building has been operating a hybrid model: "People can come into the office or work from home, depending on what their comfort levels are. Obviously, people need to be fully vaxxed to be on site," a spokesperson said in January.