Opportunists exploit extreme demand as Christchurch rents and prices skyrocket
Speculators have been quick to take advantage of the damage to commercial premises in Christchurch.
Rents and prices are skyrocketing, according to Colliers director in Christchurch, Hamish Doig.
Colliers has temporarily relocated to Russley on the western outskirts.
Some tenants on short-term tenancies have been told by developers that if they wish to remain in their premises they must buy them. Several transactions are understood to have been completed.
Mr Doig said that while it’s understandable that developers are being opportunistic, the financial effects on firms will be more significant as a result. “Revenues are going to be seriously affected – it will have a huge financial impact on those firms.
Tenants have been scrambling to find space. In one case, Collies signed a deal for space at $130/m2 and another tenant immediately bid $250/m2 for it.
Demand for alternative premises is huge and most available commercial premises had already been leased.
Commercial tenants were accepting whatever they could find, Mr Doig said. In many cases this meant squeezing into much smaller spaces – the notion of private offices was gone. In other cases tenants were moving into apartments or asking staff to work from home
The owner of Knight Frank in Christchurch (formerly Simes), Layne Harwood, said his staff is still assessing the 100 buildings they manage.
The biggest is Clarendon Towers in Oxford Terrace, one of the city’s prime office buildings. Mr Harwood said the damage was mainly around stairwells and fitouts but assessment would have to wait until the security cordon allowed.
His home in the city centre is damaged and offices trashed. He has relocated to the White Heron Hotel near the airport.
“We’re inundated with inquiries from corporate and some people are looking at pretty innovative solutions including portable offices and working from homes. We’ve got about 40 corporates looking for space. Tenants are having to make quick decisions. Most of them want to go to the western side of the city.
“Smaller firms like ours are waiting to see how things develop and continue to operate through electronic communications.”
Mr Harwood said two of his corporate clients were seriously considering the idea of a portacom village on some of the available land in the west of the city.