AMP NZ Office Trust secures Ministry of Health as major tenant for No. 3 The TerraceFebruary 25, 2004 AMP NZ Office Trust (ANZO) has secured the Ministry of Health as the major tenant for its redevelopment project at No. 3 The Terrace in Wellington. The Ministry has signed a 12-year lease for three of the four floors in a low-rise annex which will be constructed at No. 3 The Terrace, linking through to ANZO’s adjoining property at No. 1 The Terrace. The two properties are in the heart of the Government sector of Wellington’s CBD, with close proximity to Parliament, the High Court, the transport hub and a host of other Government agencies. The Ministry will replace existing tenancies totalling 6139 sqm, at the Old Bank Building, 180 Molesworth St and Westpac House, with 5415 sqm of floor space at No. 3 The Terrace. The Ministry will also retain 133 Molesworth St. The Ministry has indicated to ANZO that it is important to consolidate the staff spread across three buildings into one. The relocation, which will take place in early 2006, is expected to result in savings in maintenance costs, and in travel between buildings and to other Government departments. There are also savings from avoiding expected rental increases for the Ministry’s three current leases, which would have had to be renegotiated next year. ANZO announced its plans for No. 1 and 3 The Terrace in September last year. The project also includes the full interior refurbishment of No. 1 The Terrace, to a standard equivalent to that of a new building, following the renewal of the lease to existing tenant The Treasury for a 12-year term. ANZO executive manager Rob Lang said at that time that the redevelopment of No. 3 The Terrace was closely aligned to anticipated tenant demand, offering tenants the efficiency and productivity gains of brand-new office space without the costs of moving into an entirely new building. The exterior of the redeveloped No. 3 The Terrace has been designed to replicate the facade detailing of No. 1 The Terrace, and will feature a central atrium drawing natural light into the core of each floor. It will add a further 5500 sqm to create 9000 sqm of premium office space, with floor plates of about 2100 sqm each – among the largest contiguous CBD office floor plates in the country and delivering market-leading efficiency ratios of approximately one person per 10 sqm. The only remaining space in the redevelopment is now the mezzanine (500 sqm) and Level One (2150 sqm), which are suitable to organisations with a staff of more than 200 and offer economies of scale unmatched elsewhere in Wellington. The project, which is in undergoing final planning before construction begins, is on track for a yield on cost of 9.1 percent and a redevelopment margin of 8%. Earnings per unit is expected to increase by 3.1% in the first year post completion and an average of 2.2% per annum for the following 5 years. Mr Lang said the tenant response to the project at No. 1 and 3 The Terrace had given ANZO the confidence to embark on a second Wellington initiative in a short space of time. In December, ANZO won the tender to purchase Pastoral House, an 18-level office tower which adjoins No. 1 and 3 The Terrace, and is working on a refurbishment of Pastoral House to lift the property from its current B-grade comfortably into the A category. “At a project level, the Ministry of Health lease provides the necessary tenant pre-commitment to move into the construction phase at No. 3 The Terrace with our risks managed responsibly. “It also bears out everything our market intelligence has indicated about the Wellington CBD – reducing vacancy, a shortage of new supply, especially for large tenants wanting multiple floors, and rental growth, with demand driven mainly by Government tenants,” said Mr Lang. “Tenants are increasingly mindful of the landlord covenant. They are only willing to support projects if they are confident of a successful outcome and can see the backing of an experienced, reliable landlord with a long-term commitment to ownership.” About ANZOANZO is a unit trust listed on the New Zealand Exchange, which invests predominantly in prime CBD office properties in major New Zealand cities. It owns eight New Zealand office buildings with a total value of more than $600 million – Auckland’s PricewaterhouseCoopers Tower, ANZ Centre, IAG House and Quay Tower; and Wellington’s HP Tower, 125 The Terrace, No. 1 and 3 The Terrace and Pastoral House. ANZO is managed by AMP Ronin Management Limited. Media enquiries: |