The Wellington Perspective

The Earthquake Impact on Wellington Christchurch had an earthquake that no one expected. Wellington has been expecting the Big One for 45 years, why? The Christchurch event has caused a significant reduction in the likelihood of rupture of the Wellington Fault over the next 100 years – this is good! The likelihood of rupture of the Wellington Fault is 10%.

The Earthquake Impact on Wellington We await Royal Commission findings into Christchurch? We expect Wellington to stay as is in any review of Building Code as we have well defined geology. Christchurch does not, therefore its zone factor changes 0.2 to 0.3. Wellington0.40 Christchurch0.30 Auckland0.13 Dunedin0.13 NB: Wellington = 3 x Auckland

The Earthquake Impact on Wellington Earthquake Effects Not all ground is created equal Determining Factors  Ground Shaking – greatest levels of damage and loss  Liquefaction – plus lateral spreading  Slope Failure – slips, landslides  Surface Fault Rupture – tectonic tilting  Tsunami and Seiching Focus in risk reduction needs to be not just life safety BUT:  Damage control  Reparability  Post event functionality

The Earthquake Impact on Wellington Looking Forward Agents need to be more professional… “This will be bigger than leaky homes”  Need to have understanding of % of NBS of stock  Need to have current IEP reports  Can’t just say “I don’t know”  Leases to change and be increasingly net plus outgoings  Full replacement versus indemnity cover insurance  Loss of rents / business disruption (24 months) clauses  Be nimble and inventive – e.g. pop up offices etc….

The Earthquake Impact on Wellington NBS is creating the market – three tier market < 33% Earthquake Prone 34% to 67% Earthquake Risk > 67% Minimum, > 70% Government, > 80% Multi Nationals It is obvious that tenants and not legislation or policy drives the market. The decision maker is driven by:  Health and safety issues  Directorial responsibility Opportunity Knocks  Have the information at your finger tips  Be recognised as professional and responsive  Market over reaction creates buying opportunities