City’s property ‘heart’ has suffered a coronary...

Media Release

Date 22.3.2011

City’s property ‘heart’ has suffered a coronary… but will beat again, says expert

Central Christchurch is set to become a low-rise but broader zone as scores of commercial businesses relocate to the outer suburbs, according to one of the city’s senior property analysts.

Pete Whalan from Bayleys Canterbury said the quake would force a major rethink on central city building sizes and height - with an expansion in size of the CBD outside of previous limits, and the long-term relocation of professional firms out into the suburbs.

Mr Whalan said relaxed Resource Management Act legislation and Christchurch Council development zoning bylaws needed to be implemented to underpin the rebuilding of a totally ‘new-look’ central Christchurch.

“We’re likely to see a more spread out CBD core as the next generation of buildings move spacially outward rather than upward. We’re likely to see more smaller professional businesses – such as law firms, accountancy practices, and administrative services move more into the suburbs,” said Mr Whalan.

“This exodus from the CBD is evident on a temporary basis by necessity at this stage, but will become more permanent as time goes on and firms become comfortable operating in suburban environments.

“From a purely human psyche perspective, a lot more people are going to have psychological issues with working in CBD buildings higher than say three or four stories.

“Consequently, fewer firms will be looking to occupy high level floor space out of concern for their employees. Appreciating this, developers are unlikely to build structures which would be extremely hard to tenant.

“We will see the bigger multi-national corporations, Government agencies, and regional headquarters of New Zealand companies still requiring the same CBD floor size as prior to the ‘quake, but that floor space will be much closer to ground level – hence having broader buildings.”

Mr Whalan said feedback to Bayleys from scores of the company’s long-term clients, was that the city’s CBD would regain its vibrancy, although this could take up a decade to fully recuperate.

“City centres have always been the ‘heart’ of every great city – London, Paris, New York, Rome… even Wellington. While Christchurch’s CBD has had a major coronary, it will beat again. It’s just that no-one will know in the immediate future just how it will look in 10 years time.” he said.

“It’s definitely a ‘work in progress’. The challenge for Christchurch City Council, and the Government, will be to balance up immediate recovery plans with long term town planning issues. In many cases, the populous and business will take the lead on just how and where that redevelopment will occur.

“For example, when we look back at the city just a mere 12 or so years ago, there was no hospitality strip along Oxford Terrace. Six years ago there was no hospitality hub in Sol Square. These hospitality hubs don’t just appear overnight – they are the result of a long gradual process led by entrepreneurs, investors, and ultimately the consumer… and the same will occur as a result of whatever comes out of the eventual CBD rebuild.”

Mr Whalan said Christchurch was in a fortunate position of having access to areas of commercial and industrial zoned land on its fringes, which were already being brought into the framework as a result of the February 22 ‘quake.

“For example, we have an abundance of land around the airport, where infrastructure services are already in place and land is ready to be built on. The plan to date has been to attract freight and logistics type operations to the location.

“However, given the current crisis, the Airport Company is planning to build both a permanent office park for long-term office accommodation and also a temporary office park to relocate business to as a medium term solution.”

For the retail sector, Mr Whalan said Christchurch’s mall-size retail operations were fairly limited in the vacant land capacity they had to expand existing operations to cope with any potential influx.

“In the retail market, what we may see is the evolution of some ‘boutique’ style shopping hubs based on the fringes but I firmly believe this will be a temporary solution,” he said.

“Retail recovery in the CBD is a sure bet. It’s the right place for such operations which will feed from the tourism and hospitality sectors, supported by those who choose the inner-city living lifestyle.

“Eventually though, those boutique retailers who moved away from the CBD over the short to medium term, will come back.”

ENDS

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