Pelligra, Veriu partner in $30m Adelaide office conversion for serviced apartments

Much of one of the CBD’s largest vacant office buildings – which used to house the city’s Adelaide Metro hub – will undergo a $30m transformation into a hotel.

Property developer Ross Pelligra outside 80 King William Street, Adelaide. Picture: Matt Turner

Serviced apartment operator Veriu will open its first hotel in Adelaide as part of a $30m transformation of one of the city’s largest vacant office buildings.

More than 5000sq m across six levels, or a little more than half, of the office space in the building – on the corner of King William and Grenfell streets – will be converted into serviced accommodation as part of a refurbishment by property owner Pelligra Group.

The project is seen as a test case for a council-led push to convert Adelaide’s ageing office buildings into residential and other uses.

Veriu Adelaide will feature 111 serviced apartments, including a mix of studios, interconnecting studios and one-bedroom suites, conference and meeting facilities and a gym.

It is expected to open by the middle of next year.

Artist's impression of Veriu Adelaide. Picture: Supplied by Veriu

The building as it currently stands.

Veriu Group chief executive Zed Sanjana said the project was one of the hotel chain’s first office conversions, but it was considering similar projects across the country.

“We see this as a great opportunity to take advantage of a prime site location in a new market for us – Adelaide – where we’ve identified growing demand for quality CBD accommodation,” he said.

“We are delighted to be partnering with the Pelligra Group on the first of hopefully a number of future opportunities together.”

Veriu Group, which operates the Veriu and Punthill serviced apartment brands, operates 21 sites in Sydney, Melbourne and Brisbane, and currently has 17 additional sites under development.

After paying $25.5m for the 12-storey King William St tower in 2021, Pelligra is embarking on a major internal and external upgrade including a replacement of the building’s facade.

It coincides with a CBD building audit led by the state government and Adelaide City Council, aimed at unlocking opportunities to adapt ageing office buildings in a bid to ease the city’s housing shortage.

The $500,000 Capital City Committee study will include the CBD building audit, review of property owner incentives to adapt buildings and an assessment of planning and regulatory reforms to enable reuse.

Adelaide is home to the oldest office building stock in the country, according to figures from property firm JLL, with 58 per cent more than 30 years old. The city also has the highest rate of office vacancies, hitting 17 per cent in July – the highest rate since the late 1990s.

Pelligra chairman Ross Pelligra said the Veriu hotel would become a “landmark” mixed-use development in the city.

“Our plans to integrate the upscale Veriu Hotels & Suites brand into our building, along with major upgrades to our commercial office levels and building facade, will create a truly unique development at one of the premier addresses in Adelaide’s CBD.”

Veriu has plans to quadruple its apartment hotel network to 80 properties by the early 2030s.