22 The Terrace
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Client
Stride Property Ltd -
Size
4,800 SqM -
Year
2022 -
Address
22 The Terrace, Wellington Central, Wellington
Although not initially intended as an 'A Grade' office building competing with the modern structures in downtown Wellington, the project scope expanded from simply saving and reinstating the building to creating one of Wellington's most commercially sustainable and energy-efficient office buildings. The goal eventually became to attain 5* NABERSNZ and Green Star ratings.Catalyst was engaged to deliver a comprehensive range of services, including architectural design, seismic, project management and construction. Leveraging Catalyst's extensive experience in repositioning assets, the project achieved maximum return on investment.
The Brief
Stride recognised 22 The Terrace's prime location and potential for improved asset performance. The building required earthquake strengthening, which Stride saw as an opportunity not only to increase the earthquake rating but also to upgrade the Greenstar rating to 5 stars and improve the end-of-trip facilities and office fit-out.
The goal was to make the refurbished building competitive in Wellington's commercial office market, where 5* Green Star-rated offerings like the PWC Centre at 10 Waterloo Quay and 20 Customhouse Quay (owned by Stride) were already available. The project team wanted to show that achieving a 5* Green Star rating does not necessarily come with a hefty cost. Stride believes that older assets must also have a good environmental story, decoupling "low carbon" from "premium" spaces, even though its portfolio includes some of Wellington's landmark developments.
Project Information
22 The Terrace: A prime example of sustainable asset repositioning
Catalyst's experience in repositioning assets helped to ensure the highest possible return on investment. This is particularly impressive given that the building was originally built in a decade without much consideration for sustainability. The success of 22 The Terrace shows that a high sustainability outcome can be achieved even with typical older 80s buildings, which are common in the industry.
Out of the ordinary elements
Breaking the Mold:
Demonstrating that 5-star Green Star certification does not necessarily equate to "premium," 22TT achieved high sustainability outcomes at an affordable price point. It serves as a remarkable example of what can be accomplished with older, typical buildings.
Seismic Performance:
The building now stands at 100% NBS, meeting the stringent criteria outlined in the red book and yellow chapter.
Sustainable Design:
Recognised with a 5-star Green Star rating in both Design (confirmed) and As-built categories (confirmed), as well as a targeted 5-star NABERSNZ rating. Achievements include decarbonising operations through 100% electric operation, improved building fabric performance, and energy-efficient services.
Project Success:
Despite the challenging construction and leasing environment caused by the COVID-19 pandemic, the project has achieved outstanding results. The project was delivered under budget, with costs amounting to $36.4M against the initial $36.9M budget. Additionally, the stabilised income has surpassed expectations, reaching $2.2M compared to the projected $1.9M. This exceptional accomplishment is a testament to the project team's dedication and expertise.
Leasing Campaign:
The success of the leasing campaign can be attributed to various factors, including the building's strategic location in the government precinct, competitive rental pricing, and the strong seismic, sustainability, and well-being positioning. The value proposition presented by 22TT resonated with tenants seeking a combination of stability, sustainability, and quality at an attractive price point.
Navigating Challenges:
The project encountered significant challenges during the construction phase due to the impact of COVID-19. Issues such as material and supply shortages, labour disruptions, and the need to comply with stringent health and safety protocols arose. Despite these obstacles, the seismic upgrade component was delivered only three weeks behind the original program, and the base build completion was achieved 3.5 months later. This noteworthy outcome demonstrates remarkable resilience and adaptability in the face of adversity.
Value Creation:
Seismic upgrade projects typically present non-yielding outcomes. However, the commercials for this project were structured to provide a valuation-neutral outcome. Initial feasibilities considering a seismic-only scope showed negative returns. However, through the evolution of the project scope, incorporating base build upgrades and sustainability elements, a higher-yielding return profile was achieved, surpassing the threshold for success.
The transformation of 22TT showcases Stride's commitment to sustainable and seismic performance, while defying conventional expectations of what can be achieved with older buildings. This project sets a new standard for future revitalization endeavours and exemplifies the successful integration of sustainability, seismic strength, and financial viability.
Environmental Aspects
Seismic resilience served as the 'stick' for 22 The Terrace, while a sustainable refurbishment served as the 'carrot,' offering significant reductions in operational expense and representing the future of decarbonisation in Wellington's commercial heart. The team faced an exciting challenge with a strong focus on value, decarbonisation (including transitioning to 100% electric operation), and improving the original building fabric's performance to achieve a 5* Green Star rating – Design & As Built NZv1.0 Certified Built Rating.
Overall, this project at 22 The Terrace demonstrates the potential for seismic resilience, sustainable refurbishment, and decarbonization to positively impact the built environment in Wellington's commercial heart. It serves as a model for future projects seeking to combine safety, sustainability, and operational efficiency.
Catalyst's expertise in repositioning assets ensured the highest return on investment for this project. What's even more impressive is that the building, originally constructed in a decade with little regard for sustainability, achieved remarkable sustainability outcomes. This success demonstrates that even typical older 80s buildings, which are common in the industry, can attain high sustainability standards.
This project has won numerous industry awards, and the pinnacle of its success is the 5 Green Star – Design & As Built NZv1.0 Certified Built Rating awarded to 22 The Terrace. This accomplishment is exceptional, as it sets this Green Star tool apart from others. The successful implementation of the project despite non-standard delivery, multiple tenancies, staff changes, and variable scores is truly remarkable and worthy of recognition.
- Project team
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Sarah Courtney,
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Hamish Sail,
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Montana Barker,
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Lewis Watson,
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Tessa Leonard,
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Xin Jiang,
