[COM] 74-80 Light Square | 31m | 8lvls | Office

[Will]

Looks like some amendments to the design before construction is due to commence in next few months.

Type: Application Assessed on Merit
Application Number: DA/896/2008/A
Lodgement Date: 19/01/2010
Location: Tindall Gask Bentley, 74-80 Light Square, ADELAIDE SA 5000
Description Vary previous authorisation to demolish existing building and construct 13 level office building with ground floor retail - VARIATION - amend external materials & finishes, amend plant room details & basement level.

These ammendments were approved on March 25.

Hopefully this means that construction can finally begin.

[arki]

I doubt it, they are looking for a tenant for this building as seen on CBRE website.

[Will]

I doubt it, they are looking for a tenant for this building as seen on CBRE website.

A short-term tenant to be exact.

[Will]

Some sad news I'm afraid.

Thanks to the banks being tight and requiring 100% occupancy in order to finance projects, unfortunately this project has had 5 levels chopped off. This project will now be 8 levels.

Damn the banks! they are the sole cause for the recent spate of dumbing downs. These east coast fat-cats are impeding the economic growth of our city. The Adelaide office market is screaming for more quality space, yet because the banks will only lend to projects that have 100% occupancy, no new office space is being released onto the market, henceforth stalling any moves from businesses wishing to expand.

I am even tempted to say that I think it is time for the state government to intervene, into this another failure of the market, and establish a state owned bank.

[Waewick]

if the market is screaming for space...then why wouldn't they be able to get 100% presales?

[crawf]

So I presume this building was able to get a tenant in the end?

[Will]

So I presume this building was able to get a tenant in the end?

The development always had a tenant, Tindall Gask Bentley Lawyers, however they never intended to occupy the entire leasable office space in the building. The remaining levels were to be offered to the market.

However with the new lending conditions which require 100% occupancy, unfortunately the banks perceive financing a project with 5 empty floors too much of a risk.

I think this is ridiculous, as it is painting our office market with the same brush as those elsewhere. I understand why in places like Ireland, Iceland, Greece...it would be prudent to require 100% pre-commitment. However, with the conditions in Adelaide, I feel this is unnecessary, and an impediment to firms expanding their Adelaide workforces.

[Waewick]

So I presume this building was able to get a tenant in the end?

However with the new lending conditions which require 100% occupancy, unfortunately the banks perceive financing a project with 5 empty floors too much of a risk.

[/qoute]

do you have any evidence that this is a set rule? or just something people make up?

[Omicron]

I am even tempted to say that I think it is time for the state government to intervene, into this another failure of the market, and establish a state owned bank.

Hiss!

[Will]

So I presume this building was able to get a tenant in the end?

However with the new lending conditions which require 100% occupancy, unfortunately the banks perceive financing a project with 5 empty floors too much of a risk.

[/qoute]

do you have any evidence that this is a set rule? or just something people make up?

I recall reading it in the latest Colliers Adelaide office market report. It is on their website.

[crawf]

I thought it was only 70% occupancy rate for office developments. That is crazy it is now 100% considering Adelaide has travelled well during the GFC

[Omicron]

Says Colliers:

'The new SAPOL headquarters is currently under construction and following the recent announcement that the ATO has pre-committed to 30,135m² in City Central Tower 8 at 12-26 Franklin Street, another building will be underway. However, both cases represent almost 100 per cent pre-commitment. With speculative development unlikely at this time, it is doubtful that any other major buildings will proceed with development until after 2012. Mooted developments account for more than 200,000m² of potential supply after this, so options for major tenants considering relocation are quite good. Adelaide and Bendigo Bank are one such example. In the meantime, existing stock will continue to be under pressure to cover any short term tenant requirements and this in turn will see overall vacancy trend downwards.'

http://www.colliers.com.au/Find-Researc ... 02010.ashx

It's quite a positive report overall, in fact. I wouldn't worry too much, comrades - a smaller building now means higher demand for space later. I'm surprised that this proposal is going ahead at all, to be honest - doesn't seem like the best course of action from the developer's perspective to me.

[Waewick]

So I presume this building was able to get a tenant in the end?

However with the new lending conditions which require 100% occupancy, unfortunately the banks perceive financing a project with 5 empty floors too much of a risk.

[/qoute]

do you have any evidence that this is a set rule? or just something people make up?

I recall reading it in the latest Colliers Adelaide office market report. It is on their website.

i'm going to look into this and get back to you.

I think it has less to d with occupancy and more to do with Loan to value and Interest Cover ratios.

[AtD]

I do remember reading that at least two of the major banks consider themselves already over-exposed to commercial property and aren't issuing any new loans for such projects. I would say many of these projects don't have banks backing them - super funds are a common backer, retail trusts another and then a whole array of offshore funds are in the market these days. The big four banks aren't anywhere near as dominating in large scale commercial property as they are in small time residential mortgages.

Anger at a faceless "fat cat" in the east is misplaced, it's the reality of the market right now. It's not one individual organisation setting a 'commitment rate' like the RBA sets interest rates, its each individual project's specific investors and specific circumstance.

[Ben]

It's official:

Type: Development Application Received
Application Number: DA/88/2011
Lodgement Date: 4/02/2011
Location: Tindall Gask Bentley, 74-80 Light Square, ADELAIDE SA 5000
Description: Demolish existing building and construct 8 level office building with ground floor retail.