Sensational-Adelaide.com

timtam20292 wrote: ↑

Sun Jul 30, 2023 9:44 am

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Property Council figures show 17 per cent of CBD office space vacant

The rate of empty offices in the CBD has jumped to its highest level since the late 1990s, as a wave of new developments pile more pressure on the city’s ageing buildings.

Property Council figures show the city’s office vacancy rate increased to 17 per cent in July, up from 16.1 per cent six months earlier.

Adelaide has the highest vacancy rate of all capital cities monitored by the Property Council, followed by Perth and Melbourne.

The national CBD figure rose from 12.6 per cent to 12.8 per cent over the past six months.

The shift to hybrid working and a bleak economic forecast are putting added pressure on landlords to upgrade their older buildings, which are losing tenants to new developments.

In the six months to July, close to 20,000sq m of net absorption was reported for A-grade office space, as tenants favoured new higher-quality accommodation.

That was offset by falling demand across B, C and D grade assets.

Property Council SA executive director Bruce Djite said the figures reflected a continued flight to quality trend across office markets.

“It is encouraging to see that Adelaide’s skyline is being renewed before our eyes with attractive, high-quality office space that is in high demand,” he said.

“With unemployment hovering at multi-decade lows and strong competition for talent, companies are adjusting their leasing strategies and seeking high-quality space.”

Completion of Cbus Property’s 30,000sq m office tower on Pirie St has contributed to the recent spike in vacancies, with the Department for Infrastructure and Transport’s move to its new headquarters leaving close to 16,000sq m of vacant space at its former Grenfell St home.

Charter Hall’s $450m development at 60 King William St and Walker Corporation’s Festival Tower project are expected to push vacancies higher when they’re completed later this year.

Figures from global property firm JLL show 58 per cent of office space in Adelaide is more than 30 years old – the highest proportion of any capital city in the country.

CBRE office leasing director Andrew Bahr said landlords were currently in a “race to reposition and refurb” some 70,000sq m of backfill space that was being created as a result of a new wave of developments across the city.

The shift to hybrid working has enabled many corporates to cut costs by reducing their physical office footprints.

Telstra has reduced its city office space in Adelaide from about 20,000sq m to just 6000sq m as part of its move into the Charter Hall development, joining NAB, which will occupy about 3700sq m in the building, down from more than 6000sq m at its previous CBD home.

Both companies have said their new offices have been designed to support hybrid styles of work.

JLL SA head of office leasing Tom Budarick said tenants were willing to pay higher rental premiums in order to secure accommodation in newer offices.

“Cost seems to be a secondary consideration in relocation decisions, with efficiency, amenity, and quality of space the highest priority,” he said.

Colliers state chief executive James Young said that while vacancy rates would remain elevated as new supply was added to the market, they would stabilise into 2024, as “the end of the current supply cycle comes to fruition”.

Llessur2002 wrote: ↑

Mon Aug 07, 2023 12:19 pm

Property Council figures show 17 per cent of CBD office space vacant

The rate of empty offices in the CBD has jumped to its highest level since the late 1990s, as a wave of new developments pile more pressure on the city’s ageing buildings.

Property Council figures show the city’s office vacancy rate increased to 17 per cent in July, up from 16.1 per cent six months earlier.

Adelaide has the highest vacancy rate of all capital cities monitored by the Property Council, followed by Perth and Melbourne.

The national CBD figure rose from 12.6 per cent to 12.8 per cent over the past six months.

The shift to hybrid working and a bleak economic forecast are putting added pressure on landlords to upgrade their older buildings, which are losing tenants to new developments.

In the six months to July, close to 20,000sq m of net absorption was reported for A-grade office space, as tenants favoured new higher-quality accommodation.

That was offset by falling demand across B, C and D grade assets.

Property Council SA executive director Bruce Djite said the figures reflected a continued flight to quality trend across office markets.

“It is encouraging to see that Adelaide’s skyline is being renewed before our eyes with attractive, high-quality office space that is in high demand,” he said.

“With unemployment hovering at multi-decade lows and strong competition for talent, companies are adjusting their leasing strategies and seeking high-quality space.”

Completion of Cbus Property’s 30,000sq m office tower on Pirie St has contributed to the recent spike in vacancies, with the Department for Infrastructure and Transport’s move to its new headquarters leaving close to 16,000sq m of vacant space at its former Grenfell St home.

Charter Hall’s $450m development at 60 King William St and Walker Corporation’s Festival Tower project are expected to push vacancies higher when they’re completed later this year.

Figures from global property firm JLL show 58 per cent of office space in Adelaide is more than 30 years old – the highest proportion of any capital city in the country.

CBRE office leasing director Andrew Bahr said landlords were currently in a “race to reposition and refurb” some 70,000sq m of backfill space that was being created as a result of a new wave of developments across the city.

The shift to hybrid working has enabled many corporates to cut costs by reducing their physical office footprints.

Telstra has reduced its city office space in Adelaide from about 20,000sq m to just 6000sq m as part of its move into the Charter Hall development, joining NAB, which will occupy about 3700sq m in the building, down from more than 6000sq m at its previous CBD home.

Both companies have said their new offices have been designed to support hybrid styles of work.

JLL SA head of office leasing Tom Budarick said tenants were willing to pay higher rental premiums in order to secure accommodation in newer offices.

“Cost seems to be a secondary consideration in relocation decisions, with efficiency, amenity, and quality of space the highest priority,” he said.

Colliers state chief executive James Young said that while vacancy rates would remain elevated as new supply was added to the market, they would stabilise into 2024, as “the end of the current supply cycle comes to fruition”.

From: https://www.adelaidenow.com.au/business ... 9d7857951b

Pelligra, Veriu partner in $30m Adelaide office conversion for serviced apartments

Serviced apartment operator Veriu will open its first hotel in Adelaide as part of a $30m transformation of one of the city’s largest vacant office buildings.


Property developer Ross Pelligra outside 80 King William Street, Adelaide. Picture: Matt Turner

More than 5000sq m across six levels, or a little more than half, of the office space in the building – on the corner of King William and Grenfell streets – will be converted into serviced accommodation as part of a refurbishment by property owner Pelligra Group.

The project is seen as a test case for a council-led push to convert Adelaide’s ageing office buildings into residential and other uses.

Veriu Adelaide will feature 111 serviced apartments, including a mix of studios, interconnecting studios and one-bedroom suites, conference and meeting facilities and a gym.

It is expected to open by the middle of next year.


The building as it currently stands.


Artist's impression of Veriu Adelaide. Picture: Supplied by Veriu

Veriu Group chief executive Zed Sanjana said the project was one of the hotel chain’s first office conversions, but it was considering similar projects across the country.

“We see this as a great opportunity to take advantage of a prime site location in a new market for us – Adelaide – where we’ve identified growing demand for quality CBD accommodation,” he said.

“We are delighted to be partnering with the Pelligra Group on the first of hopefully a number of future opportunities together.”

Veriu Group, which operates the Veriu and Punthill serviced apartment brands, operates 21 sites in Sydney, Melbourne and Brisbane, and currently has 17 additional sites under development.

After paying $25.5m for the 12-storey King William St tower in 2021, Pelligra is embarking on a major internal and external upgrade including a replacement of the building’s facade.

It coincides with a CBD building audit led by the state government and Adelaide City Council, aimed at unlocking opportunities to adapt ageing office buildings in a bid to ease the city’s housing shortage.

The $500,000 Capital City Committee study will include the CBD building audit, review of property owner incentives to adapt buildings and an assessment of planning and regulatory reforms to enable reuse.

Adelaide is home to the oldest office building stock in the country, according to figures from property firm JLL, with 58 per cent more than 30 years old. The city also has the highest rate of office vacancies, hitting 17 per cent in July – the highest rate since the late 1990s.

Pelligra chairman Ross Pelligra said the Veriu hotel would become a “landmark” mixed-use development in the city.

“Our plans to integrate the upscale Veriu Hotels & Suites brand into our building, along with major upgrades to our commercial office levels and building facade, will create a truly unique development at one of the premier addresses in Adelaide’s CBD.”

Veriu has plans to quadruple its apartment hotel network to 80 properties by the early 2030s.

Norman wrote: ↑

Mon Aug 14, 2023 11:24 am

Great to see this building being refurbished at this landmark location. I just wish it was actual apartments for sale rather than more serviced apartments.

SA government seeks philanthropic funding to secure Tarrkarri – Centre for First Nations Cultures project

The South Australian government has set an end-of-year deadline to decide whether a stalled plan to build what's touted to be a globally significant Aboriginal art and cultural centre in Adelaide's CBD will go ahead.


A cost blowout has cast doubt over the future of Tarrkarri.(Supplied: Woods Bagot)

Premier Peter Malinauskas said he had also spoken with several philanthropists and the federal government about contributing funding for the Tarrkarri Aboriginal Art and Cultures Centre, which is at risk of being abandoned if additional money is not found.

"I've personally spoken to entities who have expressed an interest in potentially partnering with us and that will be important," he said on Monday.

"It's an expensive project. I think it's an important project culturally for our state on that parcel of land.

Mr Malinauskas previously warned that Tarrkarri could cost up to $600 million if built on North Terrace — three times the amount currently budgeted by the state and federal governments.

He said the state government had not ruled out increasing its budget for the project and it would be open to accepting funding from publicly listed companies.

"If there are good private companies or individuals who would want to make a contribution to this effort and are interested in the project, then we remain receptive to working with them collaboratively," he said.

Second Tarrkarri review commissioned

Tarrkarri is slated to be bigger than the South Australian Museum and the Art Gallery of South Australia combined, which could draw hundreds of thousands of visitors each year.

It is also set to display tens of thousands of Indigenous artefacts from across Australia, which have sat in storage for decades.

But the government put the project on hold in October following a $50 million cost blowout.

At the time, it announced former Indigenous Australians minister Ken Wyatt, former New South Wales premier Bob Carr and former investment banker Carolyn Hewson would review the project.

Contract documents recently released by the government show it also appointed former SA Tourism Commission chairman Andrew McEvoy to conduct a second Tarrkarri review in December.

The government tasked Mr McEvoy with investigating how many overseas tourists would be attracted to the centre if it opened.

"There wasn't the serious work done to make sure that this is a good thing to do," Mr Malinauskas said on Monday.

"We're being really scrupulous about wanting to make sure that the decision we make is underpinned by evidence that any such investment will be a lasting, positive one for the state culturally, but also economically."

The former state government did consider how many people would visit the centre once it opened.

A document released in 2021 which summarised the findings of a confidential business case stated that between 485,000 and 581,000 people would visit the centre in 2025.

It stated that the number of annual visitors to the centre would increase by up to 665,000 people by 2040.

The state government is yet to publicly release the full Tarrkarri business case, or the reviews conducted by McEvoy, Wyatt, Carr and Hewson.

Patrick_27 wrote: ↑

Tue Aug 15, 2023 11:48 am

Fuck Malinauskas. This stalling is entirely political, it's not pragmatic as he's trying to sell it. When have Labor ever cared about cost blowouts on government funded projects? They themselves are notorious for it, and even if it did blowout, they would no doubt revert the blame onto the former government as it was their pet project, so what's the problem? This is just mere delays as they prepare bin the project and come back with a Contemporary Art Gallery proposal, clearly the AGSA have been in his ear and if Mali thinks for a second that a Contemporary gallery is going to cost the same or less and bring in the tourism dollars, he's genuinely an idiot.

gnrc_louis wrote: ↑

Tue Aug 15, 2023 12:40 pm

Patrick_27 wrote: ↑

Tue Aug 15, 2023 11:48 am

Fuck Malinauskas. This stalling is entirely political, it's not pragmatic as he's trying to sell it. When have Labor ever cared about cost blowouts on government funded projects? They themselves are notorious for it, and even if it did blowout, they would no doubt revert the blame onto the former government as it was their pet project, so what's the problem? This is just mere delays as they prepare bin the project and come back with a Contemporary Art Gallery proposal, clearly the AGSA have been in his ear and if Mali thinks for a second that a Contemporary gallery is going to cost the same or less and bring in the tourism dollars, he's genuinely an idiot.

Ah yes - because MoNa has been a disaster for Hobart and bringing in tourists!