Pelligra Group to invest $30 million in Adelaide office tower upgrade
Pelligra Group has added another office tower to its bulging Adelaide property portfolio, and is investing in a $30m upgrade to entice new tenants.
Business
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Acquisitive property developer Pelligra Group will inject $30m into a major revamp of a King William St office tower following its $25.5m purchase.
Pelligra has agreed to take over the 12-storey building, on the corner of Grenfell St, from Peter Tunno’s Southern Cross Equity Group, and will embark on a substantial upgrade including a complete internal refit and replacement of the building’s facade.
Aside from the Westpac branch on the ground floor, most of the building’s 8000sq m of office space is currently vacant. Pelligra Group chairman Ross Pelligra believes a shortage of quality office accommodation in Adelaide will position the building well with potential tenants once refurbishment works are completed late next year.
“What we’re going to do is a major revamp of the building,” he said.
“We’re going to strip it back to its bones and bring it back to the standard that it needs to be, including making it more eco-friendly, renewable energy, air control, LED lighting, upgrading its NABERS rating.
“Once complete the fit-out will be the same standard as a new building – the only thing we are keeping is the skeleton and the bones of the building are very good.
“Clearly Charter Hall is building the biggest building in Adelaide next door and we want to make sure it complements that – we’ll be doing something similar to what we've done on Pirie St.”
Pelligra recently completed a multimillion dollar refurbishment of the historic Pirie House building on Pirie St, welcoming new tenants including Mellor Olsson and Hub Adelaide.
While Adelaide’s headline CBD office vacancy rate is among the highest in the country at 15.7 per cent, Mr Pelligra said it was skewed towards older and lower grade buildings. “The business is very excited about the office market in Adelaide,” he said.
“Adelaide doesn’t deserve to have low quality building but for a project like this it’s not easy to find the capital – we’re effectively putting our balance sheet against this to make it happen.
“We’re also looking at other partnerships to see if we can help local owners bring some of their buildings back to life.
“It’s something we’ve been doing in Melbourne and Sydney since 2000.”
The upgrade of Pelligra’s newly purchased building at 80 King William St is expected to commence early next year before completion by the third quarter of next year.
Immediately to the north of the site, Charter Hall is currently building a 40,000sq m tower which will become the city’s largest office building by area once completed in 2023.
Knight Frank’s Oliver Totani, who brokered the sale of 80 King William St alongside colleague Guy Bennett, and Ryan Mills and Rino Carpinelli from Savills, said the sale campaign attracted strong interest from local and interstate investors.
“The eastern side of King William St is set to be transformed over the coming 12 to 24 months with refurbishments of 100 King William St and 22 King William St, and the development of 60 King William all planned or under way,” he said.
“80 King William St is set to play its part in the renaissance of what is Adelaide’s key commercial hub and cultural boulevard.”
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