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Singapore's Soilbuild REIT Moves On Adelaide’s Grenfell Tower

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Singapore real estate investment trust Soilbuild REIT has dipped into Adelaide's liquid CBD office market and snapped up an A-Grade Adelaide office tower for $134 million.

The deal marks the sixth $100 million-plus sale of an Adelaide office tower in just over a year, highlighting the growing appetite for commercial assets outside of Sydney and Melbourne's fully priced office markets.

The 24-level office tower, located at 25 Grenfell Street in Adelaide’s central business district, was acquired by the real estate trust from ­Credit Suisse’s asset management arm.

Credit Suisse, which has had the building listed for the last five months, bought the tower for $125 million in 2016 and revamped key areas in the building.

The building offers 25,000sq m of lettable space currently holding an 88 per occupancy rate and a weighted average lease expiry of five years.

Major tenants include the Government of South Australia, law firms Minter Ellison and Lipman Karas and commercial estate agents JLL who brokered the sale of the building.

▲ Adelaide currently has vacancy rates of less than 5 per cent across the A-grade office market. Image: The Grenfell Centre in Adelaide
▲ Adelaide currently has vacancy rates of less than 5 per cent across the A-grade office market. Image: The Grenfell Centre in Adelaide


Soilbuild, which owns nine business parks and two industrial assets in Singapore, last September became the latest group from the city-state to leap into the Australian market.

In Canberra, it bought an office building known as Australia Place, at 14 Mort Street, for $55 million, and in South Australia it picked up an ­Inghams poultry processing plant in Burton for $61.25 million from Perth-based Ascot Capital.

Soilbuild's portfolio currently sits at $1.39 billion. Its portfolio in Singapore includes Solaris, a landmark development in one-north, Eightrium at Changi Business Park, Tuas Connection and Bukit Batok Connection.

Other Singaporean players include Ascendas, Mapletree, Cache and Frasers which have also been snapping up local commercial property assets.

▲ The Grenfell tower was marketed and sold by JLL’s Jamie Guerra, Roger Klem, Rob Sewell and Stuart ­McCann and Knight Frank’s Guy Bennett, Paul Roberts and Neil Brookes.
▲ The Grenfell tower was marketed and sold by JLL’s Jamie Guerra, Roger Klem, Rob Sewell and Stuart ­McCann and Knight Frank’s Guy Bennett, Paul Roberts and Neil Brookes.


Soilbuild said major investments in defence, medical, roads infrastructure and renewables across South Australia were key fundamentals behind its decision to invest in the state as well as average face rents for prime Adelaide CBD Office space increasing by 3.35 per cent over 12 months to January.

“The average Adelaide CBD prime yields have not compressed as much as compared to other Australian cities such as Sydney and Melbourne, thus the Adelaide market offers an attractive relative value proposition,” Soilbuild senior executive Lawrence Ang told The Urban Developer.

“With the acquisition, it improves diversification and reduces the reliance of the REIT’s income stream on any single property, tenant or trade sector.”

As part of the deal, Soilbuild has also agreed to pay an additional $5.07 million to secure an “incoming tenant” for the building which is rumoured to be engineering group Aurecon.

The deal, which is expected to settle in November, was struck on a yield of 7.7 per cent and represents the second highest price paid this year for an Adelaide office tower.

Another Singaporean REIT Suntec struck a deal to buy the Allianz Centre in Adelaide for $148.3 million last month.

The sale of the 12-storey A-grade tower at 55 Currie Street to the ARA-managed REIT was struck on an initial yield of 8 per cent.

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Article originally posted at: https://theurbandeveloper.com/articles/singapores-soilbuild-reit-moves-on-adelaides-grenfell-tower