Adelaide to see new build-to-rent community, and landmark asset hits the market
Adelaide is getting ready for build to rent. Image: Canva.
  • Adelaide's industrial market only saw marginal losses compared to Sydney and Melbourne
  • The city's inner-north is set to see a new BTR development
  • A prominently placed mixed-use tower has come to market

A 12 storey mixed used tower in Adelaide has hit the market, and 250 rental apartments as part of a new build-to-rent (BTR) development are set to rise in the city’s inner north. This comes as a new outlook report finds the southern capital to be a “stable option for investment over the course of this year.”

Robust expectations for 2023

South Australia’s property market is expected to provide a stable option for investment over the course of this year, according to Knight Frank.

The city’s office and industrial markets have both performed well, with Knight Frank Chief Economist Ben Burston saying:

“Before the pandemic Adelaide’s office vacancy rate was 14 per cent and by the end of 2022 it was 16 per cent, reflecting a marginal increase, while in Melbourne and Sydney we saw an increase of 11 per cent and seven per cent respectively.”

“In Adelaide’s industrial market, we have seen surging rental growth in line with the rest of the capital cities, with prime rents rising by 12 per cent, just behind Brisbane at 16 per cent.

“Meanwhile, over the past five years prices of industrial lots ranging from one to five hectares have more than doubled in Adelaide (+115%), with the city seeing stronger growth than Sydney (+110%) Brisbane (+85%) and Perth (+46%).

“But the sector to watch moving forward in Adelaide is build-to-rent – we predict there will be more of these projects due to the supply shortage in residential markets.

“Our data shows that while there are no completed build-to-rent projects or any under construction in Adelaide just yet, there are four schemes proposed totalling a potential 669 units, and we expect momentum to build in coming years.

“While this is still a comparatively small number compared to some of the bigger states, such as New South Wales, Victoria and Queensland, it is significant given that Adelaide has only just started looking at build-to-rent.”

250 BTR apartments to rise over Adelaide

Sentinel Fund Manager Australia will deliver South Australia’s first institutional Build to Rent community on a site it’s placed under contract to acquire in Renewal SA’s Bowden precinct.

Sitting on 4,000 square metres of land at Lots 49 and 50 on Third Street in Adelaide’s inner-northern suburb of Bowden, the development will be home to 250 apartments. On completion, the apartment community will be managed under Sentinel’s Kinleaf property management brand.

Bowden SA_Sentinel site boundary
The Bowden site for a new BTR development. Image: Supplied.

South Australian Housing and Urban Development Minister Nick Champion said: “We welcome this boost to housing supply, which is set to alleviate pressure on renters and provide more choice for South Australians.

“The first-of-its-kind development, in the heart of the innovative Bowden precinct, provides a longer-term, more secure renting option and adds a new layer to our housing mix.

“The Build-to-Rent sector is emerging as another way to help address housing shortages and ease the rental squeeze – and it’s great to see such a major global property player back Bowden as the place to do just that,” said Minister Champion.

Director of Sentinel Fund Manager Australia, Michael Streicker said: “Our Build to Rent communities are designed and operated with renters as the priority, offering them a more convenient and refined rental experience where environmental and social sustainability are integrated throughout.

“This acquisition marks an important step in Sentinel’s national growth strategy. Following our successful delivery and stabilisation of Australia’s first purpose-built Build to Rent communities in Western Australia, as well as the establishment of our first projects in Victoria and Queensland, we’re looking forward to working closely with Renewal SA to deliver this first-of-its-kind project for the state of South Australia,” said Mr Streicker.

Renewal SA Chief Executive Chris Menz said: “Bowden has been at the forefront of innovative housing in South Australia for more than a decade.

“Having one of the world’s leading institutional Build-to-Rent providers, Sentinel, choose Bowden as the location for its first South Australian venture will raise that bar again.

“Not only will it deliver greater choice and a more professionally managed and transparent rental experience for tenants, it will also free up availability in other housing segments that are currently oversaturated,” said Mr Menz.

Landmark Adelaide tower hits the market

Located at 195 North Terrace, opposite Government House and the State Library, this property is a 12 level mixed use tower that includes 4,271 square metres of net lettable area and two penthouse apartments.

The asset will be taken to the market via an Expressions of Interest campaign run by Knight Frank agents Oliver Totani, Dominic Ong and Max Frohlich and CBRE agents Ian Thomas and Alistair Laycock on behalf of the vendor, Mandala.

195 North Terrace, Adelaide
195 North Terrace, Adelaide. Image: Supplied.

Buyers are expected to see value in the low $20 million range and strong competition.

Totani said the property was a general buying opportunity, being underpinned by its diversified income stream, rare North Terrace land holding and development potential. 

“The asset is 89% leased with a strong occupancy history of long-term tenants,” he said. 

“The diversified income stream is secured with 29 tenants across retail, office, medical and residential. 

“The property also has development potential, with no prescribed height limited, and there are multiple value enhancement initiatives available including end-of-trip facility upgrades and providing ideal floor plates for spec suites.  

“We are still seeing good demand from buyers for quality assets in Adelaide, and particularly for development sites, with more than $2 billion in major building projects will be completed across the city this year.  

“In the short term, a growing economy and tight labour market point to sustained momentum in capital market activity in South Australia.” 

The apartments also have stunning views out across the northern parts of the city, with one apartment including three bedrooms and 38 square metres of balcony and the other apartment including 250 square metres of living spread across two floors, the two bedrooms both including ensuites, and the apartment including 69 square metres of balcony.

The Expressions of Interest campaign for the property will close at 3pm (ACST) on Wednesday, May 3. 

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