CBD prime property picks up on relaxed height laws

A PRIME CBD site that has been acquired for its development potential was the outstanding commercial property sale in Adelaide last month.

Adelaide CBD view. Photo Naomi Jellicoe.

A PRIME CBD site that has been acquired for its development potential was the outstanding commercial property sale in Adelaide last month.

Number 62-68 Currie St was sold for $5.5 million via an expression of interest campaign to an unnamed Singapore based purchaser, said Knight Frank’s Tony Ricketts who negotiated the 1238sqm sale.

“There were a lot of inquiries from interstate and overseas,” said Mr Ricketts of the site, currently occupied by Avant-Garde Furnishing. “It was bought as a development site and they are currently looking at, and costing, the options in terms of what to do, whether it be a serviced apartment or hotel or other,” he said.

The site previously sold for $3 million in 2006 and $4.5 million four years later.

Twelve months ago, Premier Jay Weathrill, in conjunction with developers Palumbo, announced the building of a 32 storey high, five star Sofitel on the same stretch of Currie St with construction due to begin next year.

A strong central, capital city zoned, Adelaide location continues to carry great weight, said Mr Ricketts.

“Development now in the CBD has continued to pick up momentum with the relaxing of the height limits a few years ago,” he said. “It took a while for the legislation to be fully understood by the market. That time has passed now and has led to the surge in building values. We still compare favourably to the east coast, that’s what started to drive buyers from there to here.”

The run on development on the eastern seaboard has been going on for two or three years, he said, hence the emergence of Adelaide as a willing, commercial property destination.

“I think everything in the CBD is a potential development site,” he said.

Andrew Turner, a director with sales and leasing agents Commercial SA, which completed a warehouse lease of around $160,000 per annum for 1.7 acres in Royal Park, Adelaide (April’s highest per sqm lease), said the leasing market remained steady in general but urged the state government to rethink its attitude towards lesser quality city centre stock.

“We have to renovate what we have got now. The city has so much C and D grade property available that we should really stop new development in the CBD,” Mr Turner said.

Prospective lessees meanwhile should not be put off by the ramifications of the upcoming federal election, he said.

“The election is not relevant to the leasing market whatsoever. Someone who is looking to lease is looking to lease, and it’s for one, three or five years, not a 20-year commitment.

“As soon as an election is announced, the whole world shuts down. If I had a property for sale I would put it on the market now. It’s all about supply and demand, everybody says ‘let’s wait until the election’ but it has no real impact.”