New earthquake codes will dramatically alter New Zealand’s urban landscape

New earthquake codes could see the demise of buildings such as 105 Queen St, Auckland

Haunting science fiction movies of decaying abandoned city CBDs could become a reality in the wake of new earthquake codes and hiked insurance premiums in New Zealand.

I’m not being alarmist here either; there’s a good chance this could become the new reality.

There are no two ways about it… some retailers, businesses and owners of heritage commercial buildings will be forced to simply walk away from their properties.

Couple this with the current number of vacant high rise buildings in New Zealand CBDs and you see the possibility of a rather eerie landscape in the future.

The cost of remedial work and the already substantial hike in insurance premiums will be simply unaffordable for property owners and tenants alike.

Businesses in Christchurch I have been working with are spending a small fortune to bring their heritage buildings up to scratch.

For new buildings it involves space-age engineering. Foundations are driven 22 metres into the ground. That’s over 7 stories deep. And enormous lengths of steel clad in concrete sheaths are run through multiple stories of each building to strengthen it.

For older buildings, any parapets, gargoyles and other heritage masonry features have to be anchored and pinned back.

42 people died in the Christchurch earthquakes from masonry falling on them, so the measures are perfectly understandable.

The huge costs of remedial work are compounded by far higher insurance premiums.

Developers in Christchurch say they will have to charge $550 per square metre for office space, with at least another $130 per square metre for operating expenses because of the high insurance costs.

This would see leases costing up around $680 a square metre, which is simply impossible for most organisations.

In Christchurch, many firms moved to the suburbs after the CBD became uninhabitable and have existed there quite happily ever since.

I predict many of the accountants and lawyers and other CBD tenants who could afford CBD rentals in the past won’t bother to return after getting used to lower costs and comparing those to the now astronomical costs of returning.

This, along with increased online connectivity, diminishes the case for paying high rents for a central city location.

The New Zealand Property Council estimates there are around 40,000 properties that will be classified as ‘earthquake prone’ and require work.

We all know how expensive the leaky building saga is to the country, but the NZ Herald recently reported the cost of seismic work could dwarf the huge costs of the leaky building issue.

It is a tough situation without any easy answers.

But the bottom line is that the face of heritage buildings in our city centres will never look the same again.

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