A $250 million development has been confirmed for a piece of prime real estate in Wellington that’s sat empty since the Kaikōura earthquake.

The site on 61 Molesworth St is currently used as a car park after the previous building was deemed at risk of collapse and had to be demolished.

A subsequent investigation found part of the old commercial building had been rented out unlawfully. The kitchen and cubicles were being used as bedrooms and the toilet was in a corridor through the fire exit.

Now a 11-storey building is set to take shape on the site and become home to the Ministry of Foreign Affairs and Trade (MFAT), which will lease the development’s commercial space.

In an NZX announcement this morning, Precinct Properties New Zealand Limited confirmed it has an unconditional agreement to acquire 61 Molesworth St.

The new 24,000 square metre office building will also have ground-floor amenities including a lobby cafe, meeting suites and end-of-trip facilities.

Precinct Properties chief executive Scott Pritchard said the building will be seismically resilient and environmentally focused.

 “In addition to the high-quality building specifications for this project, seismic resilience has been a critical consideration. The structural design of the building will incorporate advanced technologies, such as tuned fluid viscous dampers which provide performance that exceeds design code minimum standards.

“Securing this outstanding opportunity reinforces the strong office-occupier demand for high-quality buildings in strategic locations like the Government precinct in Wellington.”

The project is expected to cost $250m and should be completed towards the end of 2025.

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An 85-tonne excavator was brought in to demolish 61 Molesworth St after the Kaikōura earthquake. Photo / Mark Mitchell

MFAT said the lease of its current Wellington headquarters at 195 Lambton Quay ended in September 2025.

“The building owner will then carry out a substantial building refurbishment that will require MFAT to vacate the property.

 “Following a thorough and robust process to identify new premises, MFAT has signed a development agreement and 25-year lease with Precinct Properties for a new building at 61 Molesworth Street.”

The decision has been approved by Cabinet.

MFAT will occupy about 12,000sq m of the new building, which is slightly less than the ministry’s current location.

The building that was at 61 Molesworth St was one of many demolished across Wellington after the 7.8 magnitude Kaikōura earthquake in 2016.

Wellington City Council took over the site to complete the emergency demolition with the help of a 85-tonne excavator.

The nine-storey building at 61 Molesworth St was demolished in 2016. Photo / Mark Mitchell

The building was owned by Prime Property Group Limited whose director Eyal Aharoni admitted housing residential tenants in the empty office block.

The Ministry of Business Innovation and Employment (MBIE) investigated and found the first floor of the Molesworth St building had been rented out.

“The kitchen and cubicles were being used as bedrooms, the toilet was in a corridor through the fire exit, and the family was using a shower on the ground floor of the building,” the ministry’s compliance and investigations team manager said at the time.

Aharoni said he was just trying to house the homeless.

In June 2017 the Tenancy Tribunal ordered Prime Property Group Limited to pay back $6900 of rent, exemplary damages of $600, and the $20 filing fee to tenants.

“Regardless of the landlord’s intentions, charging $300 a week to live in an office space is unlawful. It is a prime example of taking advantage of someone who is in a vulnerable position,” MBIE said.

“The exemplary damages cost reflects the extent of the health and safety risks faced by the tenants, and the fact that the landlord should have known better.”