Adelaide developers lead transformation of city skyline
The city of Adelaide is finally growing up with the CBD’s skyline transformed since the turn of the millennium. However, after years of local development, offshore and interstate groups are circling.
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Adelaide’s skyline has been transformed since the turn of the millennium with more than 100 major building projects completed over the past two decades of CBD development.
And in a city often overlooked by interstate and offshore players, it has been local developers who have left the biggest mark on the city they call home.
The Advertiser and international property group JLL have analysed a comprehensive list of major building projects that have shaped the city’s skyline since 2000.
Local property developers dominate the list, overseeing development of more than half of the major projects that have taken place in the CBD over the past two decades.
Of the 121 projects analysed, 67 were led by local developers, while interstate groups delivered 21 and offshore players built a mix of eight apartment and student accommodation towers.
The balance were developed by a mix of corporate, non-profit, education and government groups.
While interstate and offshore groups completed just 14, or 21 per cent, of the major CBD projects in the first 15 years of this millennium, their influence has escalated in recent years, responsible for 15, or 40 per cent, of the major projects completed since 2015.
JLL strategic research director Rick Warner said the figures showed that Adelaide was now firmly on the radar of interstate and international investors and developers.
“What this indicates to me is growing confidence in Adelaide as a city,” he said.
“Commercial occupier demand is improving, and attitudes towards high-density residential living are changing.
“More and more people are preferencing a city lifestyle – with its proximity to entertainment and restaurants and a shorter work-time commute – over the traditional suburban home and garden.”
One of the city’s most prominent developers in recent years has been Commercial & General, which has completed four major CBD projects since 2006, including the recently completed $345 million Calvary Adelaide Hospital.
In the new year it will begin work on the $320 million SAHMRI II facility in the city’s burgeoning biomedical precinct on North Tce, while it has also unveiled plans to build the city’s tallest building on Currie St.
Executive chairman Jamie McClurg believes planning changes implemented by former planning minister John Rau marked a major step-change in attitudes towards development in the city.
“The history of the Adelaide CBD was one in which the planning system was set around what was the State Bank building as being the highest point of a pyramid going out – what that meant was the whole design mentality of the city was we could only design up to that height point,” he said.
“We didn’t have a city that tried to reach for the sky and in a city that doesn’t reach for the sky, it lacks inspiration.
“Once that was removed by John Rau then that allowed people to have that freedom.
“One of the benefits now in South Australia is that doing something in the city, unless you’re galactically stupid, complies – that enables us to get on and do the work that we need to do and enables people to reach for the sky.”
Mr McClurg said that on completion of the Calvary hospital project in September, Commercial & General had become the biggest single developer of CBD projects – measured by building space and value.
“I don’t have the tallest building in the city but developers always like to get a tall building so hopefully I can get a tall building one day.
“Calvary for me ultimately was a ten year journey from start of concept to delivering the building – these things take a long time, long commitment and patience.”
While Commercial & General has focused its CBD developments on the office and health sectors, other local developers have been tapping into the city’s apartment boom.
Close to 40 per cent, or 47 of the major CBD projects in the past 20 years have been apartment buildings, while there have been 42 office towers, ten hotels and a mix of student accommodation, retail and other developments.
While only 16 major apartment buildings were built in the first decade of the 2000s, that number has risen to 28 in the ten years since 2010. Three more projects, including the Adelaidean and Realm projects in the east end, are due for completion next year.
Since 2002 architect-turned developer Michael Loucas and his development company Guava Lime, have transformed a part of the city he’s dubbed the “Paris end of Flinders St”.
Residents have begun moving into the recently completed One apartments at the eastern end of Flinders St, while work on a $40 million Vibe Hotel next door will begin early in the new year.
It will be the tenth and final building to be developed by Guava Lime in the precinct.
Despite a widely held industry view that the city’s apartment market is tapering off, Mr Loucas believes apartment living in Adelaide is “still the way of the future”.
“Even with all of these buildings constructed, we’re still at about 2.6 per cent of the state’s population living in apartments as compared to 8 and 9 per cent on the eastern seaboard,” he said.
“So we have a lot of potential in terms of future apartment dwellers in the city.
“We see apartment living as a sustainable model – we can’t keep building out forever, and laying out roads, schools and infrastructure for that.
“But if I’m going to live in the city I want to live in a building that breathes, I want to live in a building that’s got sunlight, spaces that I can break out to.
“If we’re providing that as developers and architects people will naturally gravitate and make the city their place of choice – if you provide cookie cutter concrete jungles and block apartments it’s not an inspiring environment to live in.”
While local developers have spearheaded most building activity in the CBD over the past two decades, arguably the biggest transformation of a city precinct has been led by a series of national property groups.
Since 2005 the city block bordered by King William, Waymouth, Bentham and Franklin streets – formerly known as the City Central precinct – has become home to five new office buildings in what has arguably become the city’s pre-eminent office precinct.
In that time, 19 major office buildings have been built in the Adelaide CBD, with ten of those located west of King William St.
Mr Warner said it had resulted in “a subtle shift of the economic heart of Adelaide”.
“Before the mid-2000s, the Adelaide CBD prime office market centred around the streets of Grenfell and Pirie, east of King William St,” he said.
“However, there has been a gradual shift westwards, with the majority of new prime office stock developed along Waymouth and Franklin streets.
“I expect that this will continue in the future with the ongoing revitalisation of the laneway network running through this area providing a greater night-time amenity for the white-collar workers located in these buildings.”
The latest addition to the burgeoning Franklin St office precinct is Charter Hall’s $260 million GPO Exchange tower, which welcomed major tenants BHP and the SA Attorney-General’s department in October.
Charter Hall regional development director Simon Stockfeld said he’d witnessed renewed confidence in Adelaide’s development sector since his company bought into the precinct in 2014.
“I think it’s (City Central) certainly a really important precinct,” he said.
“Adelaide has some great office buildings around the city – this is the highest concentration and probably the one true precinct.
“I’ve certainly seen Adelaide become more confident over that time – the economy has been in reasonably good shape over that period and that generally leads to more office buildings.
“There is opportunity to develop in Adelaide, and a lot of big tenants like BHP and AGD (Attorney-General’s department) want to move their staff into better quality space – there’s a driver in the background for new development to happen.”
Adelaide developer Greaton acquired the historic GPO building from Charter Hall last year, and plans to begin construction of a new Westin hotel behind the heritage-listed building next year.
Mr Stockfeld said his company was in discussions to acquire another site in the CBD, with the potential to develop another office building similar in scale to the recently completed GPO tower.
“We’ve got $1.3 billion invested in South Australia at the moment and we’re certainly looking to grow that – we think there's good opportunity in Adelaide at the moment,” he said.
“We've had a really great success story with GPO – we’d love to take all of that experience and credentials and do something else in the city – we certainly have our sights on something significant.”
While Mr McClurg is committed to building his business and retaining talent in his home city, he says low population growth, bureaucratic processes and a lack of vision continue to hold back the state.
“Adelaide’s a bit like a girl that you're married to where you know that she’s not perfect in every way, but no one is, and you love her just the same,” he said.
“My logic is persistence, reach for the sky, do the best we can and in my life in this business we’ll only achieve maybe one tenth of what I would like to achieve.
“We could all benefit from a stronger relationship in Adelaide by being positive about changing the psyche but also all of us – private sector and government – everyone actually working intellectually hard on something.”
Mr Loucas said his commitment remained on designing and delivering buildings that he can be proud of long into the future.
“Our view for Adelaide and development generally is not to focus on comparing ourselves to the eastern seaboard – I find that tiring, unnecessary and irrelevant,” he said.
“We try and make the most of what is a beautiful city and an accessible city – we’ve got to take a leaf out of the book of places like Lisbon – cities that are comfortable in themselves and push their own benefits rather than trying to compare with other cities.”