AIDE MEMOIRE
Oral Item: Optimisation of government office accommodation
Date:
20 August 2024
Priority:
Urgent
Security
In Confidence
Tracking
2425-0769
classification:
number:
Information for Minister(s)
Hon Nicola Wil is
Minister for the Public Service
Contact for telephone discussion (if required)
Name
Position
Telephone
1st contact
Deputy Secretary,
s 9(2)(a)
Paul Stocks
Building, Resources and
Markets, MBIE
Angela Xygalas
General Manager, New
Zealand Government
Property, MBIE
The following departments/agencies have been consulted
Minister’s office to complete:
Approved
Declined
Released under the
Noted
Needs change
Seen
Overtaken by Events
See Minister’s Notes
Withdrawn
Comments
Official Information Act 1982
AIDE MEMOIRE
Oral Item: Optimisation of Office Accommodation
Date:
20 August 2024
Priority:
High
Security
In Confidence
Tracking
2425-0769
classification:
number:
Purpose
To provide information fol owing the discussion with officials on government office
accommodation to inform an oral item at an upcoming Cabinet meeting.
Background
1. You met with officials on 14 August to discuss 3 matters related to Government
Property, namely:
s 9(2)(f)(iv)
s 9(2)(f)(iv)
c. An update on the Wel ington Consolidation Project.
2. Officials highlighted the changing environment facing the Wellington office
accommodation market due to decreasing agency headcounts, increasing surplus
space across the portfolio, and a softening market for office accommodation.
3.s 9(2)(f)(iv)
Released under the
4. s 9(2)(b)(ii)
5. s 9(2)(f)(iv)
Official Information Act 1982
6. Out of Scope
7.
Out of Scope
s 9(2)(f)(iv)
8.
s 9(2)(a)
Angela Xygalas
General Manager, New Zealand Government Property, MBIE
20 / 08 / 2024
Released under the
Official Information Act 1982
Annex 1: Potential Talking Points
At the Officials meeting on Wednesday 14 August 2024, you indicated that you would like to
raise an oral item on government office accommodation with Cabinet to:
Accommodation Challenges
1. highlight to Ministers that agencies are reducing headcount and there is now surplus
office accommodation across the portfolio.
2. note some agencies make accommodation decisions which are not necessarily in the
best interests of the wider Crown.
3. s 9(2)(b)(ii)
4. advise that a Wel ington Consolidation Project has commenced to drive improved
space utilisation in Wel ington and efficiencies in the system.
Out of Scope
Released under the
Official Information Act 1982
AIDE MEMOIRE
Ministry of Foreign Affairs and Trade – New Premises
Date:
30 August 2024
Priority:
High
Security
Tracking
In Confidence
2425-0992
classification:
number:
Information for Minister(s)
Hon Nicola Wil is
Minister for the Public Service
Contact for telephone discussion (if required)
Name
Position
Telephone
1st contact
General Manager, New Zealand
s 9(2)(a)
Angela Xygalas
Government Property, Ministry of
Business, Innovation and Employment
Chief Advisor Property, New Zealand
Government Property, Ministry of
David White
Business, Innovation and Employment
The following departments/agencies have been consulted
Nil
Released under the
Minister’s office to complete:
Approved
Declined
Noted
Needs change
Seen
Overtaken by Events
See Minister’s Notes
Withdrawn
Official Information Act 1982
Comments
AIDE MEMOIRE
Ministry of Foreign Affairs and Trade – New Premises
Date:
30 August 2024
Priority:
High
Security
Tracking
In Confidence
2425-0992
classification:
number:
Purpose
To provide you with information regarding the Ministry of Foreign Affairs and Trade new premises
at 61 Molesworth Street, Wellington, following a letter you received from Right Honourable Winston
Peters. Also attached is a draft letter for your consideration.
s 9(2)(a)
Angela Xygalas
General Manager, NZ Government Property
Building, Resources and Markets, MBIE
30 / 08 / 2024
Background Released under the
1.
You have received a letter from the Right Honourable Winston Peters regarding his
expectation that the Government Property Group (GPG) remain actively engaged with the
Ministry of Foreign Affairs and Trade (MFAT) to identify prospective government agencies for
61 Molesworth Street. Your Office has requested an Aide Memoire responding to Right Hon
Peters’ concerns.
The Decision to Lease 61 Molesworth Street
Official Information Act 1982
2.
In November 2022, MFAT sought approval from Cabinet to move its head office
accommodation to the Precinct Properties New Zealand Limited (‘Precinct Properties’)
development at 61 Molesworth Street from mid-2025, occupying seven of the 11 floors with
an initial lease term of 25 years, and the remaining four floors for 15 years.
3.
GPG worked with MFAT to identify and assess options. s 9(2)(b)(ii)
2425-0992
In Confidence
2
s 9(2)(b)(ii)
4.
5.
6.
7.
8.
In November the Cabinet Government Administration and Expenditure Review (GOV)
Committee agreed that MFAT could enter into a development agreement for 61 Molesworth
Street. [GOV-22-MIN-0046].
Progress on the Sub-leasing of Surplus Floors
9.
In June 2023, the Cabinet Committee (GOV) directed MFAT and GPG to provide regular
reports on progress in sub-leasing surplus floors, to the Minister of Foreign Affairs, Minister
for the Public Service and Minister of Finance. These reports provide details on the activities
and status of the efforts to sub-lease the surplus floors.
10. Two reports have been provided to the Minister for Foreign Affairs, in February 2024 and
July 2024. While the February 2024 report was referred to your office, MFAT has yet to
confirm if the July report has been referred to your office.
Released under the
11. s 9(2)(b)(ii)
Official Information Act 1982
12.
2425-0992
In Confidence
3
s 9(2)(b)(ii)
13.
14.
15.
16.
17.
18. On 6 July 2024, the respective Deputy Secretaries from MFAT and the Ministry of Business,
Innovation and Employment met to discuss how best to work together s 9(2)(b)(ii)
Both agencies agreed to continue to work
together to s 9(2)(b)(ii)
Next Steps with the Remaining Floors.
19. 61 Molesworth Street is similar to other recently leased government buildings in that it has
good quality services, large efficient floor plates, seismic resilience, and good energy
efficiency and sustainability ratings. s 9(2)(b)(ii)
Released under the
20. s 9(2)(b)(ii)
Official Information Act 1982
21.
2425-0992
In Confidence
4
22. s 9(2)(b)(ii)
Response to Rt Hon Winston Peters
Attached is a draft letter to the Right Honourable Peters for your consideration.
Released under the
Official Information Act 1982
2425-0992
In Confidence
5
Appendix A
Rt Hon Winston Peters
Minister of Foreign Affairs
PARLIAMENT BUIDINGS
Dear Minister
Thank you for your letter dated 29 August 2024 regarding the new head office accommodation
building for the Ministry of Foreign Affairs and Trade (MFAT).
I agree that we need to drive more value from Government spending and to mitigate any fiscal
risks with al government activity, including property.
s 9(2)(b)(ii)
I look forward to working with Ministers to delivering savings in public sector spending and wil
ensure that GPG continues it’s efforts to assist MFAT with this matter as it works to optimise the
office accommodation footprint.
Released under the
Hon Nicola Willis
Minister for the Public Service
Official Information Act 1982
2425-0992
In Confidence
6
AIDE MEMOIRE
Ministry of Foreign Affairs and Trade – New Premises - Additional
Information
Date:
5 September 2024
Priority:
High
Security
Tracking
Confidential
2425-1048
classification:
number:
Information for Minister(s)
Hon Nicola Wil is
Minister for the Public Service
Contact for telephone discussion (if required)
Name
Position
Telephone
1st contact
General Manager, New Zealand
s 9(2)(a)
Angela Xygalas
Government Property, Ministry of
Business, Innovation and Employment
Chief Advisor Property, New Zealand
Government Property, Ministry of
David White
Business, Innovation and Employment
The following departments/agencies have been consulted
Released under the
Nil
Minister’s office to complete:
Approved
Declined
Noted
Needs change
Seen
Overtaken by Events
See Minister’s Notes
Withdrawn
Official Information Act 1982
Comments
AIDE MEMOIRE
Ministry of Foreign Affairs and Trade – New Premises – Additional
information
Date:
5 September 2024
Priority:
High
Security
Tracking
In Confidence
classification:
number:
Purpose
To provide you with the additional information you requested regarding the work that the
Government Property Group (GPG) is doing to minimise the amount of surplus space in the
Ministry of Foreign Affairs and Trade’s (MFAT) new premises at 61 Molesworth Street. Also
attached is a draft letter for your consideration, which incorporates your feedback.
s 9(2)(a)
Angela Xygalas
General Manager, NZ Government Property
Building, Resources and Markets, MBIE
5/09/2024
Background Released under the
1.
On 29 August 2024, you received a letter from the Right Honourable Winston Peters
regarding his expectation that the Government Property Group (GPG) remain actively
engaged with the Ministry of Foreign Affairs and Trade (MFAT) to identify prospective
government agencies for 61 Molesworth Street.
2.
We subsequently provided your Office with an Aide Memoire [
Ministry of Foreign Affairs and
Trade – New Premises 2425-0992 refers] responding to Right Hon Peters’ concerns, and a
draft letter for your consideration.
3.
The Aide Memoire detailed the work that GPG was undertaking to sub-lease MFAT’s surplus
Official Information Act 1982
floors, s 9(2)(f)(iv)
You have
subsequently requested additional information on this solution. You also provided feedback
on the draft letter.
2425-0992
Confidential
2
s 9(2)(f)(iv)
Draft response to Right Honourable Winston Peters
11. Attached for your consideration is a draft response updated to reflect your feedback.
Released under the
MFAT letter.docx
Official Information Act 1982
2425-0992
Confidential
3
Right Honourable Winston Peters
Minister of Foreign Affairs
PARLIAMENT BUILDINGS
Dear Minister
Thank you for your letter dated 29 August 2024 regarding the new head office accommodation
building for the Ministry of Foreign Affairs and Trade (MFAT).
s 9(2)(f)(iv)
Released under the
Official Information Act 1982
I hope to hear good progress has been made towards resolution of this liability in the near future.
Hon Nicola Willis
Minister for the Public Service
BRIEFING
s 9(2)(f)(iv)
Date:
5 August 2024
Priority:
High
Security
In Confidence
Tracking number:
2425-0594
classification:
Action sought
Action sought
Deadline
Hon Nicola Wil is
Out of Scope
7 August 2024
Minister for the
Public Service
Agree / Disagree that agencies are required to optimise
capacity within government’s existing office accommodation
footprint.
Out of Scope
Contact for telephone discussion (if required)
Name
Position
Telephone
1st contact
Deputy Secretary
s 9(2)(a)
Paul Stocks
Building, Resources and Markets
General Manager, New Zealand
Angela Xygalas
Government Property
The following departments/agencies have been consulted
Released under the
Minister’s office to complete:
Approved
Declined
Noted
Needs change
Seen
Overtaken by Events
See Minister’s Notes
Withdrawn
Official Information Act 1982
Comments
BRIEFING
s 9(2)(f)(iv)
Date:
5 August 2024
Priority:
High
Security
In Confidence
Tracking
2425-0594
classification:
number:
Purpose
1.
Out of Scope
2.
This Briefing provides an update on Out of Scope
and the Bowen House
project.
Released under the
Official Information Act 1982
2425-0594
In Confidence
1
Recommended action
The Ministry of Business, Innovation and Employment recommends that you:
Wel ington consolidation project
a Out of Scope
b
Agree / Disagree
c s 9(2)(f)(iv)
Agree / Disagree
Bowen House
d
note that lower agency staff numbers in conjunction with flexible working policies is reducing
demand for office accommodation. This is impacting the Bowen House Project in confirming
occupants for the building, s 9(2)(f)(iv)
Noted
Out of Scope
Released under the
Agree / Disagree
Official Information Act 1982
Angela Xygalas
Hon Nicola Wil is
General Manager New Zealand
Minister for the Public Service
Government Property
Building, Resources and Markets,
MBIE
..... / ...... / ......
..... / ...... / ......
2425-0594
In Confidence
2
Background
3. Out of Scope
4.
5.
The current fiscal environment has agencies reducing their office accommodation
requirements and providing additional space into the property portfolio. This is placing
additional demands on the desire to reduce government’s office accommodation holdings.
6. Out of Scope
Wellington consolidation project
7.
Government departments and Crown Agents occupy around 70 sites in the Wellington CBD
ranging from entire buildings to single floors. In April 2024, a project was initiated to identify
opportunities to optimise space utilisation within the existing footprint. s 9(2)(b)(ii)
on a 7-desks to 10 FTE ratio enabling the disposal of surplus space in
the portfolio s 9(2)(b)(ii)
8.
s 9(2)(b)(ii)
Released under the
9.
A moratorium was implemented that prevents agencies from entering into alternate office
accommodation solutions without the express permission of the Government Property
Group, s 9(2)(f)(iv)
10. s 9(2)(b)(ii)
Compounding this is the impact of
Official Information Act 1982
the system wide reduction in agency head count creating additional capacity in the system in
conjunction with misaligned lease tails s 9(2)(f)(iv)
11. s 9(2)(b)(ii)
2425-0594
In Confidence
3
12. Reducing the Crown’s office accommodation footprint and optimising space utilisation is
paramount to ensuring efficient utilisation of government’s office accommodation portfolio.
Bowen House
13. Out of Scope
14. A reduced demand for office accommodation is impacting the Bowen House Project in
confirming occupants for the building, s 9(2)(g)(i)
A further chal enge is that agencies identified for the building are
not requiring the capacity originally anticipated.
15. A system wide reduction in agency head count is creating additional spare capacity in the
system. Discussions are occurring with potential occupying agencies, and we have
recommenced discussions with The Parliamentary Service who are re-evaluating the viability
of occupying Bowen House.
16. s 9(2)(f)(iv)
Out of Scope
Released under the
Official Information Act 1982
2425-0594
In Confidence
4
Out of Scope
Next steps
22. Subject to your agreement with the recommendations, MBIE wil :
i.
continue to optimise the government’s office accommodation footprint, engaging
with agencies.
s 9(2)(f)(iv)
Released under the
Official Information Act 1982
2425-0594
In Confidence
5