Wellington City Council is leasing premises on The Terrace. Photo / Google
Wellington City Council is leasing premises on The Terrace. Photo / Google
Wellington City Council is spending millions of dollars leasing offices for its headquarters on The Terrace - a space which is now half-empty most of the time.
The council has forked out almost $13.2 million in rent since it moved to 113 The Terrace in October 2018, the Herald canreveal.
A review of council working arrangements is underway, given the average occupancy rate has decreased significantly after Covid-19 normalised working from home.
The decision to move to The Terrace was triggered by concerns over earthquake risk, which is a growing problem for tenants and building owners across the city.
Council staff were turfed out of the Civic Administration Building (CAB) in Te Ngākau Civic Square after the 2016 Kaikōura earthquake. They moved to the nearby Municipal Office Building (MOB) and others around the city.
But noisy earthquake remediation work on the neighbouring Town Hall meant they had to move out of MOB too.
Some staff were working on the top floors of Wellington’s Central Library, which came to an end when that building was also closed because of earthquake risk.
Wellington City Council chief infrastructure officer Siobhan Procter said the full occupancy level at their new space on The Terrace was 979 people.
She said average occupancy had been fluctuating but estimated it was now down to about 50 per cent.
“The council is currently developing its workplace strategy with a view to moving to hybrid working. The impact on the council’s space requirements is still being worked through. Any reduction of the leased area would be subject to negotiation with the landlord,” Proctor said.
The lease comes up for renewal in September 2026.
Proctor said the timing of the council’s eventual return to Te Ngākau Civic Square was uncertain and would be at least six years away.
This is because both MOB and CAB need to be demolished and suitable office space developed to go in their place.
“The consent for CAB demolition was submitted in August this year with demolition planned to commence around the middle of 2023, with MOB we expect to lodge the consent for demolition next year,” Proctor said.
About 180 Meridian Energy staff also had to leave their waterfront building earlier this year because of seismic concerns. Photo / Mark Mitchell
Wellington City Council staff are among many who have had to vacate central city office space because of seismic concerns.
Ministry of Education, Meridian Energy, and NZME staff all had to leave their offices this year too.
Colliers director Steve Maitland said Wellington commercial space was squeezed because landlords were not reacting quickly enough to the seismic dilemma facing the market.
He said several buildings were sitting empty because they were below 34 per cent of the New Building Standard, which means they are earthquake-prone.
No tenants were expected to commit to them until the NBS rating lifted above a minimum of 68 per cent and ideally 80 to 100 per cent, Maitland said.
“There are plans for additional new buildings but the soonest delivery for these is most likely 2025. That leaves an immediate gap to be filled and this will exert continued pressure on the top end of the building market in Wellington where seismic is still the major issue affecting tenants.”
