Statement in response to Mountain Scene article ‘Rental Shocker’ (Thursday 31 March)
04 Apr 2022
To be attributed to Glen Sowry, CEO Queenstown Airport
Queenstown Airport has extended significant rent relief packages to aviation related businesses operating across the airport precinct, valued at more than $11 million since March 2020. At the request of the tenant, Queenstown Earthworks, the leased land size was reduced from 2,400 sqm to 1,000 sqm from 1 June 2020. This lease continues to date.
Market rent for comparable industrial zoned land in the Frankton area is $65 to $85 per sqm. The Queenstown Earthworks lease expired in June 2021 and they have been on a monthly holdover since then paying a rate of $20 per sqm for 1,000 sqm, well below market value. More than half of the contractual leased area is sub-leased by Queenstown Earthworks to other tenants for profit.
The owner of Queenstown Earthworks recently installed a fence on Queenstown Airport land covering approximately 2,600 sqm of land, despite holding a lease agreement for only 1,000 sqm of that land. In light of this, QAC has offered Queenstown Earthworks an agreement which reflects the increased space the tenant is occupying and is proposing a rate per sqm that brings it closer to market rent.
Based on the quotes from Mr Harpur published in the media in recent days it is apparent he is expecting to occupy an additional 1,600 sqm of land at no charge, while continuing to sublease land at a premium.
As previously stated, Queenstown Airport is currently in a commercial discussion with Mr Harpur. We ensure all tenants pay a fair market rate for the space they occupy, and apply this approach consistently. We have only recently initiated the discussion with the tenant and will be more than happy to consider any feedback. We do not, however, view it as appropriate that the airport company and ultimately Queenstown Lakes district ratepayers heavily subsidise a business operating in the construction industry in Queenstown.
The airport company is an important majority-owned community asset, and its revenue is highly indexed to passenger movements. For the last two years revenue has been a fraction of previous years and the company's profit in FY21 reduced by 91% compared to the previous year. As a council-controlled trading organisation, we take seriously our responsibility to ensure that the commercial return on company assets is reasonable and fair.
- Top tips for travelling this winter
- Queenstown Airport launches compost initiative
- Queenstown and Wānaka ready and waiting to welcome Aussies back
- Queenstown Airport encourages Government to provide certainty for ski season
- Queenstown Airport half-year results reflect volatile operating environment
View All News