Hines Property invests in Adelaide’s changing skyline, future

Pullman Adelaide owner and the group developing the world’s tallest student tower in Adelaide is investing in existing and new sites in the CBD to make the most of the growth opportunities ahead.

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Adelaide’s largest private owner of hotels and CBD apartments, which has also won approval for the world’s tallest student tower here, is investing in existing and new properties to make the most of changing mood and skyline.

Hines Property managing director James Hines told The Advertiser the group is close to buying a new development site in the CBD and an announcement on its proposed 38-storey, $85 million student tower on 29 Twin Street is also expected shortly.

While the pipeline developments progress, the group is ticking off a phased $6 million refurbishment of its Pullman Hotel on Hindmarsh Square to make the most of “growing opportunities” in the Adelaide hotels sector.

“Competition is great. One of the biggest issues in Adelaide is that a lot of our competitors are 30-year old properties and when you have older stock, they are unable to push their rates up.

“With new product (hotels like Westin, among others) coming in the market, there will be a greater reason for people to get educated on paying room rates in Adelaide commensurate with other capital cities.

“Whilst we (Pullman and Ibis) have had some good growth, our room revenues are still a lot lower than most of the other capital cities.

Pullman Adelaide owner, Hines Property managing director James Hines. Picture: Dean Martin

“There are actually lot of opportunities for Adelaide to grow room rates and to perform even better.

“Don’t forget that people staying in a hotel are, 95 per cent of time, not from Adelaide. They know the same hotel will be $300 a night in Melbourne, so why is it $180-$200 in Adelaide.

“There is some work to do there. It has been challenging because there has been very little new supply in the market. New hotels should help change that.”

The Pullman Hotel (formerly Crowne Plaza) now sports a contemporary luxury lounge for its premium guests and an upgraded gym, which has new spin bikes for Tour Down Under and other cycling enthusiasts like Mr Hines.

“For us, this development is now nine years old, so it’s a good time to be building on the opportunities around.”

Work on opening up its Level 15 events space to face the square will begin soon while room upgrades and ground floor restaurant changes are also planned. Mr Hines is buoyed by the number of cranes in the sky, the potential of Rundle Street in the vicinity of Lot Fourteen and the positivity in Adelaide.

“When we did our very first apartment development in 2000 (Mantra), everyone was telling us we are crazy.

“It’s far more positive now — you just need to see the number of cranes in the sky to understand the mindset is changing.

“There are other sites on Rundle Street which we own that are ultimately development sites and we are very close to finalising another transaction for a new development.” He did not reveal further details but the student housing and hotels sectors hold promise for the group.

“SA has so much opportunity to grow population (through space and defence investment) but a way to grow population in the near term is students.

“Ultimately, it will be about more work and more jobs than are (currently) produced. It’s a chicken and egg situation.

“International and interstate investors are not saying ‘there’s no way I am going to Adelaide’. They are now actually coming here … first time in my career where I have actually seen that.

“When we first started...if we were presenting to a bank on a particular development for construction finance, 45 minutes of an hour’s presentation would be on why Adelaide, 15 minutes would be why this project. That’s completely changed now.”