Govt scheme boost to quake-prone property
The Milton St Substation in Sydenham, Christchurch.
The shake-up of a government incentive scheme could enable commercial property owners to strengthen earthquake-prone heritage buildings, a leading industry figure says.
The Government's Heritage Earthquake Upgrade Incentive Programme (EQUIP) has been tweaked to better assist owners in medium and high seismic risk areas.
Ryan Johnson, Bayleys Real Estate's national director commercial and industrial, says the introduction of new professional advice grants, in particular, is being welcomed by the industry and property owners.
The strengthening of earthquake-prone buildings comes with targeted timelines and thresholds and, if not addressed, can have implications for bank lending and rental potential.
The Government announced the EQUIP changes earlier this year, saying heritage buildings are integral to the character of regional New Zealand.
The grants provide up to half of the costs for services such as seismic assessments, conservation reports, architectural and structural engineering plans.
Many regional building owners can also apply for up to 67 per cent of the cost of upgrading, and multiple building applications can seek funding of up to 67 per cent of professional advice costs.
Johnson says the changes are an acknowledgement by the Government that owners of commercially-utilised heritage property in the regions face particular challenges, with lower rental incomes and capital values than those in major cities.
This often doesn't justify upgrade expenses, and there can also be a local shortage of professional advice.
"The recent boost to government assistance available through the EQUIP scheme is potentially a game-changer that unlocks the conundrum for owners who face prohibitive strengthening costs," says Johnson.
"Regional centres with high concentrations of heritage buildings and medium or high seismic risk, such as Napier and Invercargill, look particularly well poised to benefit from EQUIP funding."
The Property Council has long-supported retaining heritage buildings where practicable, but calls for pragmatism and balance.
The Milton St Substation in Sydenham, Christchurch, was built in 1928 by the Municipal Electricity Department (MED).
It is the largest remaining example of the classically influenced substations built in Christchurch during the art deco period, and is listed as a heritage site in the district plan.
It suffered damage during the quakes of 2010 and 2011. First-time developer Clark Mauger bought the substation in 2017.