Wellington demand strong, says AMP

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The $1 billion state sector revamp in the next three years is not worrying AMP NZ Office after its conditional $50.4 million Wellington purchase last week.

Chief executive Scott Pritchard said the capital had a shortage of good office blocks.

After agreeing to buy nearly 1ha of land near the Beehive on the site with the Bowen State building and Charles Fergusson Tower, Pritchard said reducing numbers of civil servants was not an issue for his company.

AMP has huge plans for the site and could spend up to $200 million, following resource consent being granted for a further 60,000sq m of floorspace.

"Wellington has a supply problem. Stock is is reducing faster than the Government contraction because a lot of buildings there are not seismically strong.

"So it's a unique situation where we think there's going to be quite a bit of demand for Government buildings with big floor space built strong enough. At the moment, five or six Government organisations are looking for accommodation," Pritchard said.

"Land near the Beehive is pretty attractive," he said of the long-term potential. If we build it up to the scale, you could easily spend $200 million."

NZ Property Investor this week reported Wellington developer Ian Cassells saying bureaucrats were being crammed into offices like battery hens and 31 government agencies are aiming to cut the average space from 21sq m to 13-14sq m.

Chris Dibble, associate research director at Jones Lang LaSalle, liked AMP's purchase. "The three years left to run with major tenant Ministry of Social Development will aid them in terms of timing and the challenges they may face."