New office towers set to revitalise Adelaide

New office towers set to revitalise Adelaide

1 March 2019

Two new office towers are set to transform the Adelaide CBD, as stronger demand from the defence, mining, and health industries fuelling its office market, and with vacancy rates currently sitting at 14.2 per cent.

First out of the blocks is local developer Kyren Group with a $70 million office tower that broke ground last week at 102-108 Wakefield Street.

The 14-level office tower, designed by Cheesman Architects, will provide about 14,000 square metres of prime-grade office accommodation.

The tower will be leasing at circa $470 net per square metre and is expected to be completed in 2020.

Cbus Property is also unveiling plans for a $300 million new office tower at 83 Pirie Street in Adelaide’s city centre, says the AFR.

The super fund developer took over the former Planet Nightclub site last year through an off-market deal with its previous owner, the Adelaide Development Company, after the site won approval for a 21-level office tower.

Designed by Woods Bagot, the 17-level tower now planned will comprise 30,000 square metres of office space for 83 Pirie Street, on the corner with Freemasons Lane.

The building will be topped with a 300 square-metre rooftop terrace and feature an onsite wellbeing lifestyle centre, as well as 365 square-metres of ground floor retail.

Construction of the Pirie tower will kick off once the developer has secured a sufficient pre-commitment. It would take around two years to complete.

Fund manager Charter Hall is also winning large pre-commitments from the South Australian Attorney-General’s department and the country’s biggest miner, BHP, for its $250 million office redevelopment next to the Adelaide GPO.

High quality contiguous office accommodation is becoming harder to find off the back of many recent leasing transactions that have absorbed the majority of prime-grade office space,” said Savills Australia’s Adam Hartley.

Cbus Property chief executive Adrian Pozzo agrees: “There is a distinct lack of supply for contiguous new-built commercial stock in Adelaide’s city centre.”

“This demand is driven by positive employment rates and sustained spending across defence, renewable energy and technology sectors, including the implementation of the 10 Gigabyte Adelaide initiative, which indicates demand will only increase,” he added.

Commitments in the defence sector have ramped up in the last three to four months with BAE securing 3,000 square metres at 80 Flinders Street and Lockheed Martin and Saab in the market for city office space of about 1,500 and 3,000 square metres respectively.

The construction boost is a dramatic turnaround for the city where last year saw 220,000 square metres of unoccupied commercial space in untenanted buildings, some of which had been languishing for decades.

Last year the State Commission Assessment Panel approved plans for Adelaide’s tallest building, adding 38 levels of floor space to the Adelaide Metro Info Centre at the corner of King William and Currie streets.

The building will include 266 hotel suites, 78 residential apartments and a restaurant and bar.

At 132.4 metres, it will be 40 centimetres taller than Westpac House, giving it bragging rights over the city’s relatively low skyline.

The upward momentum of positive market conditions continues to grow after South Australia led the charge nationally across all other confidence measures throughout 2018.

The last ANZ/Property Council (of Australia) Survey revealed historic peaks in confidence in South Australia not only in the property sector but also in economic growth expectations and economy management.