Wingate and IP Generation face Adelaide office hit

The market reset and vacancy could see the former home of SA’s Department for Infrastructure and Transport go at a discount.

77 Grenfell St, Adelaide. Picture: Supplied

Joint venture partners Wingate and IP Generation are staring at a hefty loss on a landmark Adelaide office tower, which has remained largely vacant since the departure of South Australia’s Department for Infrastructure and Transport (DIT) two years ago.

The Wingate/IPG venture paid $103.5m for the 20-level tower at the end of 2018, when it planned to invest in major upgrade works in a bid to retain the department as an anchor tenant.

However, the department’s move to CBUS Property’s $300m development on Pirie St at the beginning of 2023 left close to 16,000sq m of vacancy in the building, as the city’s vacancy rate continued to rise in the aftermath of the pandemic.

Industry sources expect the property to attract offers of close to $65m after being listed through agents at JLL and Colliers. The latest attempt to offload the property comes three years after Cushman & Wakefield brought it to market but failed to secure a buyer.

Offered with vacant possession, the tower is being touted as an opportunity for developers to convert the 16,484sq m of net lettable area into an alternative use such as student accommodation, residential apartments or a hotel.

JLL SA managing director Ben Parkinson said the building’s location on “one of Adelaide’s premier business boulevards” was likely to attract local and offshore interest.

“The asset is ideally suited for conversion into a mixed-use development with hotel and residential components, purpose-built student accommodation, or residential apartments with flexible floor-plates and multiple proposed schemes already in place,” he said.

“Located in a Capital City zone with no prescribed height limit, 77 Grenfell St enjoys a commanding presence in the city’s skyline. Towering 91m high, the building boasts superb views in all directions.”

The latest Property Council figures show that Adelaide’s CBD office vacancy rate fell for a second consecutive time to 16.4 per cent in February, after reaching a recent high of 19.3 per cent in February 2024.

In 2022 Wingate/IPG completed a series of waste management upgrades that earned the Grenfell St building a 6 Star NABERS Waste rating – the first in South Australia and one of only three buildings nationally to achieve the highest industry standard.

Offering four street frontages and dual access points, the property also provides basement car parking for 37 vehicles.

Mr Parkinson and JLL’s Luke Billiau and Jack Bergin are managing the sale alongside Colliers’ Alistair Mackie, Jordan Schmidt, and James Mitchell.

Expressions of interest close on April 16.