FORGET churches, Adelaide is earning a status as the city of investments with another well known CBD office building at Pirie Street sold.
Jones Lang LaSalle’s associate director of sales & investments Tony Ricketts, in conjunction with Colliers International, has sold the property at 50 Pirie Street to interests associated with the Cohen Group on behalf of the South Australian Government’s Motor Accident Commission.
The Cohen Group is an Adelaide based investment company with property holdings through out the state including the Burnside Village shopping centre, Port Mall shopping centre and the Port Market.
Ricketts said the property was sold on a yield of 7.7%. The estimated net income for 50 Pirie Street is approximately $1,153,000 per annum.
Built in 1972, 50 Pirie Street is a 14 level office building plus basement with a net lettable area 6,426 sqm.
50 Pirie Street lies adjacent to Rundle Mall, which is Adelaide’s most recognised retail strip, close to all public Parking Stations and to other household corporate names such as AON, BHP, Australian Executors, ING, Telstra, Life Plan, Statewide Superannuation, Bank SA, NAB.
The building is tenanted by the SA State Government; the Minister for Administrative Services; Motor Accident Commission; Cavendish Superannuation; Westpac Banking Corporation; Rundle Capital Partners; Energy Industry Ombudsman SA and Electricity Supply Industry Planning Council.
In addition, the property has tremendous future development potential as it is zoned “Central Business Area – King William Street North Policy Area 16”, a feature of which is the new Maximum Building Height of 103 metres, or the equivalent of up to 34 storeys.
Ricketts said the sale was inline with ongoing interests and appetite for office buildings in Adelaide, particularly in the CBD.
According to Ricketts, the CBD is ripe with investments yielding 6.25% to 8% – especially on new properties.
“There is a high number of interests from Perth and Melbourne based investors in Adelaide’s CBD market at moment, and to a lesser extent from Sydney.
“There is anticipation from investors of a positive outlook in the market fuelled by strength in the mining and resources sector and now from the defense sector,” he concluded.
Ricketts is also negotiating on the sale of another office tower at 77 Grenfell Street.
SA Water House is owned by Brentwood Australis, which paid $41.7 million in 1993. The 20 level complex was built in 1991 at a cost of $100 million. Originally Australis Centre, work commenced in February 1989 but when developer Hooker Corporation collapsed later in 1989 its receivers appointed Concrete Constructions to complete the development.
Following the collapse of Hooker Corporation, the building was acquired by its financier, the State Bank of SA, which later sold it to Brentwood from the SA Asset Management Corporation, after the State Bank folded.
This time round, the 15,600 sqm property is expected to fetch around $50 million.
Australian Property Journal
