In early May, property fund manager Charter Hall added 121 King William Street to its $1 billion South Australian asset portfolio.
The off-market sale of 121 King William Street, purchased from private equity group Blackstone for $82.25 million, represents Adelaide's largest commercial deal of 2019 thus far. The 13-level tower exceeds 12,400 sq m, with floors generally spanning across at least 1,000 sq m. The A-Grade building is almost fully occupied, with major tenants Ernst & Young and Jacobs Engineering Group.
The recent purchase will continue to strengthen Charter Hall’s $966 million PFA Fund.
As Adelaide’s commercial property market continues to grow, Charter Hall has repeatedly shown its confidence locally. In addition to the new acquisition, Charter Hall is nearing practical completion on its $250 million GPO Exchange development in the CBD. Long term confidence was bolstered by 12 and 10-year lease commitments from SA Attorney General’s Department and BHP, securing more than 90 per cent of tenantable space.
Compared to the lower yielding eastern markets, Adelaide continues to remain attractive to investors.
The latest property figures show the Adelaide CBD vacancy rate continuing to decline, from 14.7% to 14.2% in the six months to January 2019. Knight Frank reports vacancy rates are expected to continue to tighten with strong tenant demand. Leasing transactions are seeing an increase in the number of new entrants into Adelaide rather than just tenant relocations.
A key driver for tenants is access to reliable, secure, high-speed internet. Ten Gigabit Adelaide, a high-speed fibre optic data network, is exclusive to the City of Adelaide and has expanded the tenancy market into rapid growth sectors including technology, mining and defence.
The City of Adelaide has partnered with TPG Telecom as the Official Network Partner to deliver and install the Ten Gigabit Adelaide network. Learn more about the project and the rollout plan here.