Earlier this month Charter Hall transacted on Adelaide’s largest commercial deal of 2019 so far. The investment property group secured 121 King William Street from private equity group Blackstone for $82.25 million.
The sale bolsters Charter Hall’s already significant $1 billion South Australian asset portfolio. The group manages over 820 properties in Sydney, Melbourne, Brisbane, Adelaide, Perth and oversees, a combined total of more than $28.4 billion.
The A-grade CBD building offers over 12,400sqm of floor coverage across 13 levels. The tower was sold almost 100% fully occupied and will retain major tenants Ernst & Young and Jacobs Engineering Group.
Adelaide’s commercial property sector continues to grow and Charter Hall is routinely showing its confidence in the region and sector.
In March the group celebrated the ‘topping out’ of their GPO Office tower on Franklin Street, reaching the highest point of their 20-storey development.
Charter Hall Managing Director and Group CEO David Harrison said that the GPO project will set a new benchmark for modern workplaces in the state, providing our tenant customers with an unrivalled work experience.
The $250 million state-of-the-art building is on track to be completed later this year and will be the leading technology enabled office building in SA. Some of the main features include large light filled office spaces, third spaces encouraging tenant interaction and collaboration, technology that supports a frictionless workday and creating a community within the building.
Over 90% of the building secured pre-lease 18-months ahead of the project completion. BHP are one of tenants who will be setting up shop, signing on for 10-years across approximately 10,000sqm of the commercial office tower.
Adelaide’s commercial sector continues to remain attractive to investors who potentially see more value than lower yielding eastern markets.
Vacancy rates in the CBD have steadily fallen, reaching 13.5% in the end of Q1 according to JLL. Prime gross effective rents began to move higher with an increase of 5.3% recorded over the 12 months to March 2019.