Government starts business case into Lower Hutt high-tech hub future
Wednesday, 15 October 2025
Callaghan Innovation is developing a business case to explore commercial options for the 10-hectare Gracefield Innovation Quarter in Lower Hutt, which could include a sale.
The Crown-owned entity, originally set to be dissolved by 2026, announced it would spend six months working with consultancy KPMG to explore commercial options for Gracefield, home to laboratories, researchers and high-tech businesses
The Hutt Valley Chamber of Commerce said the extra wait would create more uncertainty for local businesses as Gracefield’s future continued to remain up in the air.
Callaghan chief executive Stefan Korn said that while Gracefield made major contributions to New Zealand’s science and innovation systems, it was costly to run - taxpayers spent $20 million on the site this year alone, a level of spending Cabinet ministers considered unsustainable.
Final options in the business case could include attracting private investment and tenants, scaling back science activities, or selling parts or all of the campus, which houses physics and chemistry laboratories and chemical storage.
A briefing to Science, Innovation and Technology Minister Dr Shane Reti in March said Gracefield had suffered from “years of chronic underinvestment” and all but one building failed seismic assessments for safe occupancy.
A market demand study commissioned by Callaghan in July found a clear need for dedicated science research space in New Zealand, with Gracefield offering key advantages - but also facing natural hazard risks and requiring further investment.
“Clear signals from the Government regarding investment plans and site management are necessary to encourage long-term commitment from respondents,” it said.
Of the 12 organisations consulted for the market study —i ncluding research institutes, commercial entities, universities and startups — some saw potential for Gracefield to shift gradually to a commercial model, but none expressed interest in partnering on a redevelopment.
Reti said he had nothing to add when approached for comment.
Patrick McKibbin, the chief executive of the Hutt Valley Chamber of Commerce, said the uncertainty around Gracefield’s future meant its tenants were unable to lock down long-term contracts with their customers, which could affect businesses across the Hutt Valley.
He said the uncertainty surrounding Gracefield’s future made it difficult for businesses to plan ahead, connect with suppliers or customers, or consider long-term development. The lack of clarity, he added, would ultimately affect the wider business community by limiting procurement and stifling future opportunities
Korn said Callaghan had no preferred or pre-determined outcomes on Gracefield’s future: “We know Hutt businesses and the city council see GIQ as an important economic asset and will want to do everything they can to ensure it can continue to be a driver of productivity and growth into the future.”