Christchurchs best office building in the best location comes to market
Christchurch's 'best office building in the best location' comes to market
| 27 February 2017
One of the foremost next-generation office buildings in a pivotal gateway position in Christchurch’s desirable corporate West End district has come up for sale: the PwC Centre at 60 Cashel Street, along with a developable car parking site at 38 Cashel Street.
Marketed on behalf of Bridgewater Properties Limited by exclusive CBRE agents Tim Rookes, Merv Davies and Brent McGregor, the freehold property is for sale by International Deadline Private Treaty, closing Thursday 23rd March 2017 at 4pm, unless sold prior.
“This is a spectacular opportunity to secure a landmark asset in Christchurch’s corporate dress circle,” says Tim Rookes, Managing Director of CBRE in Christchurch.
“Filled with blue-chip organisations and a lengthy Weighted Average Lease Term, the PwC Centre is right in the preferred location for high calibre corporate businesses due to the magnificent views over - and easy walk to - the Avon River, the iconic Bridge of Remembrance and Christchurch’s premium retail hub of Cashel Mall in what is the heart of the CBD. The west side of the river is where many leading companies - including PwC, EY, Deloitte, Meridian, and Vero - are relocating after the earthquakes.
“Investments of this calibre in Christchurch are therefore not just exceptionally unusual: this is the first new building of this size, prominence and quality to come to the market, so it will have strong national and international appeal.”
Commissioned in December 2016, the 7,917 sq m PwC Centre at 60 Cashel Street occupies a large 2,738 sq m prime freehold site on the corner of Cashel Street and Cambridge Terrace.
The building was developed and constructed by nationally acclaimed construction, design and consultant teams Armitage Williams, Warren & Mahoney, Beca, Aurecon, Mott McDonald, Cosgroves and Holmes Consulting.
Built to 130% of the New Zealand Building Standards (NBS) and Importance Level 3 (IL3), the six-level building offers floorplates up to 1,754 sq m, all designed to international premium grade standards and incorporating the latest in structural technology and mechanical and electrical elements designed to NABERSNZ™ 4.5 standard.
“All the floorplates are designed to be highly efficient and adaptable for tenants,” says Rookes. “There is minimal structural core, ensuring the space is adaptable to a wide variety of working styles. High ceilings reinforce the feeling of space and maximise natural light, while upper floors enjoy panoramic views of Christchurch and Canterbury’s hinterland.”
Rookes adds that the building offers 103 car parking spaces, 65 of which are accessed on-site via Cashel Street and Cambridge Terrace, while an additional 38 spaces of off-site car parking is provided 85 metres away at 38 Cashel Street.
“The off-site car parking facility at 38 Cashel Street also offers residential redevelopment potential for up to eight apartments, further adding to the potential for this impressive property,” he says.
The building is currently 92% occupied on long-term tenancies, providing an annual net income of $3.3 million plus income from 38 Cashel Street.
Anchor tenant PwC and blue chip peers including Chapman Tripp, Air New Zealand, Crombie Lockwood, Tonkin and Taylor, Olsson Fire & Risk and others occupy the building on long term leases that lead to an 8.6 year Weighted Average Lease Term, which Rookes says differentiates this building significantly from other investments.
“What we have here is an exceptionally strong tenant covenant on new net leases with blue chip corporate brands, retail offerings and an on-site cafe. Tenants in the PwC Centre are a virtual Who’s Who of brands that combine to create an 8.6 year WALT - nearly three times the national average.
“This property therefore offers an enviable mix of global and national tenants that provide long-term cashflow over an international grade investment. With some of the leases offering potential for occupation out to 2043 if renewal options are fully exercised, it is highly unusual to offer cashflow certainty of this quality and length, which also demonstrates the commitment of the tenants not only to the building but to this location and the city.”
PwC is the second largest professional services firm in the world. In New Zealand, PwC employs over 1,300 people and has offices in the Auckland, Waikato, Hawkes Bay, Taranaki, Wellington, Canterbury and Otago regions.
The PwC Centre occupies the foremost prime position on Cashel Street, with an outlook onto the Avon River, Bridge of Remembrance and Cambridge Terrace. Its high-calibre corporate neighbours – which include EY, Warren & Mahoney, Deloitte and Vero - reinforce the location as an unrivalled ‘dress circle’ in the renewed Christchurch, says Rookes.
“Anchor tenant PwC had a simple selection criteria when looking to create new premises in the revitalised Christchurch CBD: the best building in the best location.”
Rookes adds that the building is located in an area of Christchurch known as The West End. “The West End was established in 1850, and as a name had fallen somewhat out of use since the 1950s. However, in 2016 it was reinstated and is arguably the new corporate heart of the city, with a rebuilt office landscape harnessing the relationship to the city of landmarks such as the Avon River, The Arts Centre, the Museum, the Botanic Gardens and the retail and hospitality precincts.
“Acknowledged as the new dress circle of Christchurch, with a number of civic landmarks in the immediate vicinity, The West End is acknowledged as the prime corporate address for the city.”
Located a few blocks from the Justice and Health Precincts, the Christchurch City Council and immediately across the river from the Hospitality and Retail Precincts, the PwC Centre is a short walk to the Arts Centre, Museum, Hagley Park and Botanic Gardens.
“The PwC Centre is in the absolute heart of the new corporate sector in Christchurch,” says Rookes. “And, with unprecedented investment in infrastructure renewal, Christchurch is New Zealand’s most modern, renewed city, designed for the future with national and international appeal.”
Rookes says that as a result of the earthquakes Christchurch is New Zealand’s most modern city.
“Christchurch is seismically resilient from a technical perspective, with globally-recognised innovation in seismic technology. The stream of new buildings that are being created here are creating a new and highly desirable corporate address for the city, as well as an international reputation for building design and seismic excellence.”
He adds that the building is also symbolically positioned for success.
“Historically, the building’s location pays tribute to the southern gateway of Puari pā, which was a sizeable seasonal fishing and food gathering village under the mana of Ngāi Tūāhuriri. It grew into a popular marketplace where Māori gathered weekly to trade produce, goods and services.
“This building was designed to pay respect to this past while providing a secure, vibrant environment for commerce to continue. Additionally, its proximity to the river and the Bridge of Remembrance, which is the postcard shot of Christchurch, will only add to the symbolism of the site into the future.”
In terms of the city’s future, Rookes says that there is considerable momentum within the city as workers return, creating a vibrant environment and stable growth for the future.
“The strength of Canterbury in the traditional sectors, such as manufacturing and agriculture will increasingly drive the economy as the rebuild stimulus plateaus. The CBD is experiencing the benefits of the new environment as workers return to the heart of the city as the commercial rebuild continues to deliver.”
As regards the positive macroeconomic market drivers and demand for high quality space, Rookes says that yields for premium Christchurch office assets have been firming.
“Presently, there is a wide yield gap between returns for office stock and current market interest rates. This is likely to lead to yield compression, as 10 year bond rates start to rise. In the current global economic environment New Zealand is well positioned for investment with low static 90-day interest rates incentivising domestic investment and a lower currency encouraging international investment.
“In an international context New Zealand real estate continues to provide some of the largest yield premiums relative to bond rates, and Christchurch provides the largest yield spread currently compared to major cities around the world.
“For this reason, as well as the many qualities of the building and its tenant covenants, investors looking for a long-term property opportunity will find few finer opportunities in New Zealand this year than the PwC Centre.”
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