Firms demand leases that exclude students

By ANNE GIBSON

Three large businesses in Auckland have insisted on new leases including a clause which bans the landlord from filling their building with students, says a real estate consultant.

A fourth firm is still deciding what to do.

Jones Lang LaSalle corporate solutions regional director John Cameron said more office tenants were requiring leases that exclude students who, he said, were unpopular with many office workers.

The firm was helping three tenants - Australian software conglomerate Solution 6, Allied Foods in South Auckland and agency Young & Rubicam in Parnell - with lease student-exclusion clauses.

Mr Cameron said Microsoft, in Wellington, was considering moving buildings and he had advised them to consider inserting the same clause in a new lease.

The clause allows the businesses to surrender the lease, or declare it void, if the landlord rented space in the same building to an educational tenant, he said.

Jones Lang this week released findings of a survey of 21 Auckland CBD buildings shared by students and office workers.

The office workers complained about overcrowding, dirty lifts, toilets and foyers and said they feared panic in a fire evacuation and the spread of Sars.

The survey focused on the mainly Asian foreign language student sector, which brings in $1.7 billion annually.

Human Rights Commission disputes resolution manager Mervin Singham said landlords were not breaking the law by banning Asian students. They had the right to prescribe activities in their buildings.

"But, in setting any policy, they have to be mindful they don't create a policy that has a discriminatory impact on people in terms of their racial origins," he said.

Mr Cameron said 60 per cent of the surveyed office tenants said they should be able to surrender their lease if a landlord moved students into their building.

Solution 6 IT manager Chris Tankard said his firm was moving to Albany from Symonds St/City Rd where it shared a building with Asian language students.

The Albany lease banned the education sector from sharing the building.

Mr Tankard said student numbers outside his old building made it hard for office workers to move.

Frank Taylor, of Protecta Insurance, at 110 Symonds St - where six floors are tenanted by the Academic Colleges Group English School - said he liked the Asian students, but the numbers of people in the building caused problems in fire drills.

The 36 Protecta staff on level eight tried to use the stairwell, but it was blocked.

"But I don't object to the students being in the building," Mr Taylor said.

The $1.7 billion earned nationally from more than 80,000 foreign fee-paying students last year made export education the fourth biggest industry, ahead of traditional earners such as wool.

Last month, Trade NZ (now NZ Trade and Enterprise) released an update on the education market which said 37 per cent of international students here were from China and they contributed $810 million last year.

It cited our "safe and friendly image" in China as one of New Zealand's main advantages, with low costs, accessibility and high educational standards.

Korea, Japan, Taiwan, Hong Kong and Europe are also sources of foreign students.

Colliers International corporate services director Alan McMahon said foreign students were crucial to the health of Auckland's property industry.

"If it wasn't for the education sector, there would be a lot more empty space," he told an Auckland real estate seminar last month.