CBD chaos: Streets could remain closed for a week.
Costs to fix a defective Auckland apartment tower have spiralled 169 per cent, from $23.1m last decade to the latest estimate of $62m.
Dariusz Koper, the body corporate chairman of Victopia, sent out minutes this month from the annual general meeting of 203 owners, giving them the latest estimated repairbill: “The total cost of the project is estimated to be [approximately] $62m.”
The block is on the corner of Victoria St and Nelson St opposite TVNZ and has been under repair since last decade, covered in white shrink wrap.
Repairs were first thought to cost $23.1m, then $32m, then owners were told the expenses “could approach $40m”.
One two-bedroom Victopia unit is being advertised by Ray White agent Mark Li for sale with a $19,000 reserve. An auction is planned on July 6, with advertising saying the 33sq m unit “must be sold!”
“The complex is currently undergoing extensive remedial work. The outstanding amount owing as at 20 July 2023 is $121,225.75 more or less,” Li’s advertisement said.
Koper explained the new $62m number for repairs.
“There is a significant financial impact on the remediation project due to longer construction timeframe, inflationary pressures on materials and labour and increases in supply chain costs and consultant rates. I deeply empathise with all owners. Like many of you, I will need to consider additional borrowing or sale of other assets to fund the remaining costs.”
He expressed disappointment that the costs had escalated so much and said “it took significant time to agree on the fixed lump sum offer and related programme of works and negotiate fee increases demanded by some suppliers which delayed our forecasting and therefore reduced the time to raise funds. This is not what we hoped for.”
In 2019, the repairs shut a street after a 2m-long fibre cement panel blew off the exterior of the block, resulting in emergency services closing part of Victoria St. The panel was reported as falling from a bedroom on level 13, descending 36m to the ground. Fortunately, no one was hit by the panel or hurt in the accident.
Victopia was found to have severe defects. Photo / Anne Gibson
Teak Construction has been fixing the block, covered in white protective material for health, safety and environmental reasons, for years.
The block was designed by ADC Architects, developed at KNZ International and built by Brookfield Multiplex Constructions (NZ), which is in liquidation. The property is at 135 Victoria St and is a building distinctive for its upper-level feature where it juts out at the top.
Around 2012, specialists Maynard Marks undertook initial investigations and identified cracks in the cladding on the exterior and tiles cracking on decks on the upper levels. “In some cases, the corners have fallen off,” owners were told then of fibro cement cladding.
The block is 16 levels: 14 apartment levels with two basements.
This month’s update gave an occupancy estimation for people to be able to return to their places. That said ground, level one and level two owners could return from November in a staged re-entry going all the way through to level 14 owners returning by August next year.
Koper’s update this month expressed empathy: “The patience and resilience of all owners has been tested during the difficult times and we have empathy to all owners as we all are impacted in similar ways, although some more than others.”
The block’s repair was progressing well, with significant progress made up to level seven. Completed apartments looked much nicer than before.
A revaluation was another positive aspect: the increase in the insured value was $13.8m meaning Victopia now had an end valuation of $120m, Koper said.
“This is a very positive sign given the building is still under construction,” Koper said.
One resident said he was so disappointed with how things turned out that he had sold his place. But he remains unhappy about the cost escalation and how matters are being run.
Anne Gibson has been the Herald’s property editor for 23 years, having won many awards, written books and covered property extensively here and overseas.
