Charter Hall and Cbus Property are commencing construction on some of the biggest office projects in South Australia with occupancy rates and pre-committed tenants boosting confidence in the market.
The two projects will soon be joined by ICD Property working on another major development in Adelaide CBD as the region attracts investors from Australia and abroad.
Office occupancy rates in Adelaide were steady at 69 per cent in February according to the latest Property Council of Australia survey.
This was ahead Melbourne at 24 per cent, Sydney at 48 per cent and Brisbane at 64 per cent.
Charter Hall commenced work on its $450 million 60 King William Street development this week, to create one of the largest office buildings in the CBD.
Ahead of construction, Services Australia was secured as the major tenant for the 12-storey office tower which would eventually have 40,000sq m of office space and 3,600sq m of retail space near Rundle Mall.
Meanwhile Cbus Property also commenced construction of its $300 million office development with 18,524sq m to be leased by the Department for Infrastructure and Transport on a 10-year term.
The 20-storey tower at 83 Pirie Street, Adelaide CBD was designed by Woods Bagot with 30,645sq m of space including a café, rooftop terrace and wellness centre.
Four blocks south, Flagship recently listed a six-level office tower in Adelaide’s legal precinct which is expected to be complete by mid-2022.
The property at 13 Penny Place was placed on the market to be sold in its entirety or on a floor-by-floor basis.
In the second half of the year construction should commence on ICD Property’s $400 million mixed-use development in the central market precinct.
The triple tower plans include 15,000sq m of office space, a 249-room hotel and 210 apartments with the buildings ranging up to 38-stories high.
Property Council executive director Daniel Gannon said there is strong interest in the city with recent record-breaking deals and a spike in interest from interstate and overseas investors.
“Adelaide’s reputation as an investment destination has never been stronger,” Gannon said.
“In fact, new supply in the Adelaide CBD had a much bigger influence on vacancy rates than reduced tenant demand from Covid.
“Occupancy in the Adelaide CBD in November 2020 was estimated to be just under 70 per cent, despite last year’s circuit-breaking lockdown.”
Outside the commercial market work the city’s largest masterplanned residential development is under way.
Walker Corporation is working on the $3 billion Riverlea project with 12,000 housing lots just north of the city near Port Gawler.