The Reserve Bank’s new Auckland offices will cost the central bank more than triple the rent it previously paid for premises in the city.
The 10-year lease will cost a minimum of $32 million, the bank’s annual report disclosed.
In addition, the bank (RBNZ) has allocated $14.5m to fit out the space.
Operating costs such as council rates and utilities – typically footed by the lessee – do not appear to be included in the figures.
The lease was signed late last year, before the bank fixed a new funding agreement with the Government, which was lower than it had hoped.
It began on August 1 and covers more than 4800sq m across three floors of premium commercial space at 16 Takutai Square, in the stylish waterfront area of Britomart.
Its scale is more than double the bank’s current 1734sq m of offices at 205 Queen St, where its Auckland staff remain housed for now.
The Queen St lease expires at year-end. The move to Britomart is slated to begin in mid-November.
In the past fiscal year, the Queen St lease cost $1m, including operating costs such as water and rates.
The RBNZ said it would consider the Herald’s questions related to the lease disclosure under the Official Information Act (OIA), including whether the lease includes any provisions for rent reviews to account for inflation and whether operating costs are additional to the disclosed figures.
The bank previously refused the Herald’s OIA request for the lease cost, saying the information was withheld to protect the commercial position of a third party.
Other tenants in the Takutai building include the head office for Westpac New Zealand and the Financial Markets Authority. Across a central atrium is the professional services firm EY. Lawns and a fountain are features of the public square in front.
Dwindling RBNZ staff are unlikely to fill much more than half of the new offices’ capacity of up to 252 workstations.
As of June 30, the bank had just 164 Auckland-based staff, including part-timers and contractors. The majority of bank staff work from home at least part of the week.
However, the bank’s current restructuring contemplates more than 100 job cuts (a net reduction of some 142 positions) across the central bank.
It had a total of 625 full-time equivalent staff as of June 30. Most are Wellington-based.
A spokeswoman for the bank refused to confirm the current number of Auckland-based staff, or the number it expects will be cut through the restructure.
She said the bank would proactively release all material related to staffing levels and the restructure at the end of the month, once the numbers are finalised.
A Reserve Bank spokeswoman previously told the Herald that the new Auckland offices are “a cost-effective project for a long-term lease” and described Britomart as “a key location” close to financial stakeholders.
Finance Minister Nicola Willis previously emphasised her dissatisfaction with details of the bank’s lease-related costs, and noted: “Ministers of Finance don’t personally approve the bank’s expenditure on individual items. That’s the job of the governor and the Reserve Bank board.”
On Thursday, a spokesman said the minister preferred not to make further comment without more detail from the RBNZ.
In April, Willis and the bank agreed on a new five-year funding deal that provided significantly less money than the bank had requested.
The new lease was signed last November when the bank’s board and the previous governor, Adrian Orr, expected a fattened funding agreement of over $1 billion.
The bank initially bid for over $1b; the total ultimately provided operating expenses of $750m and capital expenditure of $25.6m for the period 2025-30. It came into effect on July 1.
The reduction prompted the bank’s current restructure and staff redundancies.
A dispute over the bank’s funding was also the catalyst for Orr’s messy resignation.
That resignation in early March, and its handling by the bank’s board, has fed more than six months of bad publicity for the bank, and to a lesser extent for Willis. Details have slowly dripped out, largely at the Ombudsman’s insistence.
Those details include that Orr’s resignation was given under considerable pressure from the bank’s board, and that the board had issued him with a “letter of concerns” related to his conduct, which included at least one angry outburst with officials.
At the same time, board chair Neil Quigley publicly contended that Orr had resigned “for personal reasons”.
Orr received a $416,000 payout after departing the bank, tied to both non-disclosure terms and gag provisions.
Quigley resigned in August “with immediate effect” in the wake of the shambolic handling of Orr’s resignation as governor.
New RBNZ Governor Anna Breman, at present the first deputy governor of the central bank of Sweden, was announced last month. She will take up the job on December 1.