Tenants keen, but will the investors be?

The Press reports:

Christchurch businesses forced out of the central city after the February 2011 earthquake are queuing up to return.

Several major city tenants, mostly in the financial and legal sectors, yesterday eased fears it would be difficult to entice office workers back from suburban business hubs.

Law firm Cavell Leitch, which lost its office in Clarendon Tower, said on Monday it would shift its a 120-strong work force from Burnside when new office space had been secured.

Anderson Lloyd Lawyers relocated to Birmingham Dr from Clarendon Tower, but chief executive Richard Greenaway said the firm intended to move back to the central city “one day”.

“We are working on identifying possible sites and buildings now that the central city blueprint has been announced,” he said.

SBS Bank Canterbury area manager Matthew Mark said his company’s pledge to the central city was “stronger than ever”.

As I blogged after my trip down there, it was clear that many former tenants were keen to return. The big unknown is how much money are property investors willing to spend on constructing buildings in the new CBD.

The plan for the CBD is exciting, and if it occurs will make for a great city centre. But the cost of construction is greater now per square metre due to tougher earthquake code requirements, and hence will sometimes exceed what insurance will cover. The height limits also make buildings more expensive per square metre.

There is a possibility that even with tenants keen to return, that the costs may end up prohibitive. But the plan unveiled will at least allow property owners to now work out those costs and make decisions.