Property players seize the moment in Adelaide

OPPORTUNISTIC purchasers are taking advantage of the property downturn in Adelaide, according to the latest Knight Frank research.

OPPORTUNISTIC purchasers are taking advantage of the property downturn in Adelaide, according to the latest Knight Frank research.

In its latest office market overview, the firm says building owners are continuing to upgrade their assets, while prospective buyers are looking for properties with upside.

"The smart investment capital is moving towards vacant or opportunistic property plays which is reflected in the recent sale of 2 King William St, which will be transformed in the next few years, capitalising on its prime CBD corner location,'' Knight Frank state managing director Peter McVann said.

Refurbishment activity such as the ex-SAPOL building at 30 Flinders St appears to be paying dividends, with the building having re-leased almost 4000sq m.

Meanwhile, prime yields have tightened by around 10-15 basis points over the year to April 2012 with average prime core market yields ranging from 7.5-to-8.25 per cent and secondary yields ranging from 9-to-9.75 per cent.
According to Knight Frank associate director Guy Bennett, there are a growing number of prospective purchasers looking for "contrary'' investment opportunities.

"Despite the perceived holding pattern surrounding BHP's approval of the Olympic Dam mine expansion, we've still seen interest from large offshore groups and certain eastern seaboard funds which find Adelaide appealing due to its solid fundamentals and relatively stable environment,'' he said.