_Adelaide office building sells in first post COVID transaction

An office building in Adelaide has changed hands for $47.2 million, in what is the first major CBD office investment transaction completed since the onset of COVID-19.

Sold off-market, the property was purchased by Intergen Property Group on behalf of a Singaporean family office from Southern Cross Equity Group Pty Ltd.

The 14-level B-grade office building has 9,640sqm of net lettable area with office space over the basement, ground, mezzanine levels, as well as the upper 11 floors, with high valued retail space facing King William Street.

The property is home to NAB, with the financial institution occupying over 60 per cent, with the State Government and a mix of high quality corporate tenants making up the balance.

It was exchanged with a WALE of three years and showing a core market yield of 6.75%.

^{22-28 King William Street, Adelaide}

The sale demonstrates how robust the South Australian office market is, and how although it doesn’t experience great peaks and troughs, it has a general stability. It is this stability, particularly in times like these, that makes Adelaide an appealing investment destination.

And while there are concerns surrounding the demand for office space moving forward, we believe that Adelaide, given it doesn’t have the supply side pressures, is likely to be one of the better performers during this time of market dislocation.

Whenever there is a big market disruption there is always opportunity. Given South Australia’s response to the health crisis and the relatively good news around the broader local economy, our property market is likely to beneficiary moving forward. It might just be our time to shine.

Ultimately, quality assets will always be sought after by investors looking for strategic opportunities and King William Street is a prestigious Adelaide CBD address, being on the city’s premier boulevard.

Not only is it located in a high-profile position, it is a short distance to the transforming Riverbank Precinct development, the new Adelaide Oval, brand new Casino and Hotel development and Australia’s fast-growing bio-medical precinct anchored by the recently built Royal Adelaide Hospital.

Within metres of Adelaide’s best retail precinct, Rundle Mall, and the city’s thriving small bar and restaurant scene located within Leigh and Peel Streets, the area is set to become the ‘new CBD’ as its direct locale is transformed by Charter Hall’s $200m office and retail development.

If you would like to know more about the Adelaide commercial market, you can read our recent overview here or get in touch with a member of the Knight Frank team.