- More than $205 million in sales negotiated in Q1 FY22
- Biggest sales include Tennyson Centre for $92.75M
- Bull market expected to continue in Adelaide
Adelaide could finally be enjoying the fruits of its labour, now “truly on the world stage”, according to Knight Frank Head of Investment Sales South Australia Oliver Totani.
The South Australian capital’s commercial property market has seen activity and buyer demand at its strongest level since before the GFC, with no signs of a slowdown on the horizon, Mr Totani said.
Some of the most significant sales included the Coates site at 1052 Port Road in Albert Park for $16.1m, one of the largest medical asset sales for some time at 520 South Road, Kurralta Park, known as the Tennyson Centre, for $92.75m, and an office building at 25 Nile Street in Port Adelaide for $62.75m.
“On a very positive note, in addition to the $205 million-plus in transactions negotiated over July to September, we have a further $100 million in property currently on the market, as well as multiple offmarket transactions in play,” said Mr Totani.
The agency negotiated more than $205 million in investment sales for commercial property over the first quarter of FY22, the company also noted that was double the previous quarter, and more than triple the previous corresponding quarter in FY21.
Mr Totani said it was expected the current ‘bull market” for commercial property in Adelaide had some way to go in terms of buyer activity and depth, with no signs of a slowdown.
“In a world full of uncertainty, the ever-present low risk profile of ‘bricks and mortar’ will continue to perform strongly,” he said.
“Adelaide has well and truly come of age. With a genuine multifaceted economy based on defence, bio-med, high tech manufacturing, education, a booming agriculture sector, a growing and highly skilled population and the realisation that Adelaide geographically is the third best place in the world to live, the interest from investors is only going to get stronger.”
Oliver Totani, Knight Frank
“The value on offer in Adelaide is also a drawcard, with the yield spread between our city and the cities on the eastern seaboard sitting at 0.75 per cent to 1.5 per cent, depending on the asset type.”
Mr Totani said the city is now playing catch up, “with the recent market disruption bringing forward three to five years of growth.”
Other sub-sectors are also seeing an excellent performance. Mr Totani said medical and non-discretionary retail sectors had outperformed in Adelaide in terms of investment sales since the onset of the pandemic, but that was set to change as Australia starts to open up.
“With the majority of the economy soon to be back in full swing we are seeing the smart capital revert back to the more traditional assets like CBD office and more generalised retail,” he said.
