Singaporean company ARA Asset Management has purchased Adelaide’s Allianz Centre for $148.3 million, signalling an increase in institutions are looking to place funds in the South Australian capital.
The building, at 55 Currie Street, is in the heart of the city’s western core precinct. It last changed hands for $81 million in 2011 when it was picked up by private syndicate Arc Equity Partners.
The office tower has since been upgraded including the installation of solar panels and end-of-trip facilities along with the upgrading of the central atrium, lift lobbies and toilets.
ARA Trust Management chief executive Chong Kee Hiong said the initial net property income yield of 8.0 per cent was underpinned by “a strong cashflow of high quality office tenants.”
The 12-storey Adelaide tower, which offers net leasable area of 26,200 square metres, sold 91.6 per cent leased, with the Commonwealth and State governments, insurer Allianz and software group Data Action the main tenants.
The building has a light-filled central atrium, 1,000sq m rooftop deck and 5,578sq m land holding fronting both Currie Street and Topham Mall.
The removal of stamp duty in South Australia in July last year has been pivotal to attracting renewed interest in Adelaide's commercial property, making the state more competitive.
Stamp duty on non-residential and non-primary-production real property transfers, previously levied at up to 5.5 per cent, no longer applies.
“We are pleased to expand our footprint in Australia with the acquisition of 55 Currie Street, a Grade A office building situated in the heart of Adelaide’s central business district,” Chong said.
JLL’s Jamie Guerra and Roger Klem and Colliers International’s Paul van Reesema, Alistair Mackie and Craig Shute, brokered the sale.
ARA, which has more than 1,300 staff in 21 cities in eight countries to manage its $40 billion property empire, runs a series of listed and unlisted trusts that invest locally.
ARA has been active on Australian shores last year purchasing a 20 per cent stake in listed Cromwell Property Group for about $405 million.
It already has a presence in direct markets, including a 50 per cent stakes in Melbourne’s $600m Southgate complex and Mirvac's 477 Collins Street development as well as 177 Pacific Highway, an A-grade office building in North Sydney.
Adelaide's vacancy rate which currently sits at 14.2 per cent, is tipped to tighten over the second half of the year with positive demand in the commercial office space is driving higher numbers of transactions.