Star of the Christchurch West End
The striking PwC Centre at 60 Cashel St, Christchurch. Photo / Supplied
A striking 'new generation' office building, in which PwC is the anchor tenant and locatedin Christchurch city's 'West End' district, is for sale along with a nearby car parking site that has development potential.
“This sale represents an exceptional opportunity to secure a landmark asset in Christchurch's corporate dress circle,” says Tim Rookes, managing director of CBRE in Christchurch, who is marketing 60 and 38 Cashel St exclusively with colleagues Merv Davies and Brent McGregor on behalf of Bridgewater Properties Limited
The properties are being sold as one package by international deadline private treaty closingat 4pm on Thursday March 23 unless they sell earlier by negotiation.
Commissioned in December 2016, the 7917sq m PwC Centre occupies a 2738sq m freehold site on the corner of Cashel St and Cambridge Tce.
“The PwC Centre 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,” Rookes says.
“Filled with blue-chip tenants and a lengthy weighted average lease term [WALT] it sits at the centre of the preferred location for high calibre corporate businesses in the heart of the Christchurch CBD.
“It has magnificent views over, and is an easy walk to, the Avon River, the Bridge of Remembrance and Cashel Mall - Christchurch's premium retail hub.
“The west side of the river is where many other leading companies including EY, Deloitte, Meridian and Vero, have relocated following the Canterbury earthquakes.”
The building was developed by construction, design and consultant teams Armitage Williams, Warren & Mahoney, Beca, Aurecon, Mott McDonald, Cosgroves and Holmes Consulting.
Built to 130 per cent of the New Zealand Building Standards (NBS) and Importance Level 3 (IL3), the six-level building has floor plates up to 1754sq m that have been designed to international premium grade standards and which incorporate the latest in structural technology, mechanical and electrical elements to meet the NABERSNZ 4.5 standard.
“All the floorplates are highly efficient and flexible 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 have panoramic views over Christchurch and Canterbury's hinterland.”
Rookes says the building has 103 car parking spaces; 65 on-site via Cashel St and Cambridge Tce, and 38 numbered spaces on the 1011sq m cleared and open property 85m away at 38 Cashel St.
“The off-site car park has residential redevelopment potential for up to eight apartments,further adding to the attraction of this sale,” he says.
The building is 92 per cent occupied on long-term tenancies, earning an annual net income of $3.3m including income from the 38 Cashel St leased car parks.
In addition to PwC, other tenants include Chapman Tripp, Air New Zealand, Crombie Lockwood, Tonkin and Taylor, and Olsson Fire & Risk.
The PwC reception area within the new Christchurch building. Photo / Supplied
Rookes says the long-term leases differentiates the building significantly from other investment properties.
“Tenants in the PwC Centre comprise a virtual Who's Who of 'blue chip' brands that combine for an 8.6 year WALT - nearly three times the national average.
“Some of the leases run through to 2043 if all the renewal options are fully exercised. It is highly unusual to have cashflow certainty of this quality and length, and this demonstrates the commitment of the tenants to the building, the location and to the city.
“The property therefore offers an enviable mix of global and national tenants that willprovide long-term cashflow over an international grade investment,” Rookes says.
He says PwC Centre has also been “symbolically positioned for success” by acknowledging the land's past.
“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 that past while providing a secure and vibrant environment for commerce to continue.”
Rookes says PwC had a simple selection criteria when looking to create new premises in the revitalised Christchurch CBD. “They wanted the best building in the best location.”
He says the Christchurch area again known as The West End, was named in the 1850s. “Itsname fell out of use from the 1950s but it was reinstated last year and applies to the heart of the city and rebuilt office landscape with civic landmarks near the Avon River, arts centre, museum, Botanic Gardens, and the retail and hospitality precincts.
Rookes says Christchurch is New Zealand's “most modern” city due to the Canterbury earthquakes.
“Christchurch is seismically resilient from a technical perspective, with globally-recognised innovative technology incorporated into new buildings that are garnering an international reputation for their design and seismic excellence.”
In terms of the city's future, Rookes says there is considerable momentum within the CBD where workers are progressing the rebuild. “The strength of Canterbury's traditional sectors, like manufacturing and agriculture will increasingly drive the local economy as the rebuildplateaus.” He says “positive macroeconomic market drivers” and the demand for highquality space, has resulted in the firming of yields for premium Christchurch office assets.
“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 today's 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 itself and its tenant covenants, investors looking for a long-term investment property won't find better opportunities in New Zealand this year than the PwC Centre.”
Tim Rookes of CBRE