DEALING WITH EARTHQUAKE CHALLENGES TO BUILDING STOCK

Wellington’s earthquake prone heritage building on Adelaide Road

A report by Greater Wellington Regional Council painted a bleak picture for the Capital of the likely consequences of an earthquake similar to the 7.1 magnitude one in Canterbury. Many property owners face huge changes to their building stock, not just in Wellington, but across the country.

We interview Andrew McKenzie, Arrow’s Wellington Manager about some of the issues property owners are dealing with.

Q// What’s the size of the problem in Wellington?

Andrew// 3,800 potentially earthquake prone buildings are being evaluated using an Initial Evaluation Process to identify those with a score of less than 34% of the New Building Standard (NBS). There are some 200 buildings on the list at present but the Council expects the list to reach 600-800 buildings when the process is completed.

There are huge implications if the Government increase the minimum acceptable standard to 67% following the outcome of the Royal Commission in Christchurch. For example; Council predict the cost to strengthen the unreinforced masonry buildings in Wellington to be $535 million based on 34% of NBS, if the standard increases to 67% this estimate increases to $1.15 billion!

Q// It’s obviously a stressful situation for building owners and tenants. What are the most immediate impacts for them?

Andrew// Building owners are dealing with increased insurance costs or, in some cases, the ability to obtain earthquake insurance cover when renewals come up. There are costs to strengthen as well as a disruption to their tenants and cash-flow. This is causing downward pressure on their asset values which directly impacts on their ability to maintain existing levels of borrowing.

Tenants and their staff are demanding information about their building’s standards from landlords. Some are reluctant to remain in a building below a standard of 67%. A few are obtaining their own assessment and entering into discussions with their landlord.

Q// What is Arrows approach to this issue?

Andrew// The Initial Evaluation Process doesn’t come with option studies, feasibilities or solutions. Arrow have teamed up with experienced structural engineers, quantity surveyors and architects to form a team that can offer a total property feasibility solution for building owners.