In this issue

Market Snapshot

Through the second quarter of 2013, market conditions have remained soft with demand noticeably down compared to previous years. The majority of enquiry in the CBD has been for 100-300sqm with minimal demand from tenants seeking 400-1000sqm. The latter group is reflective of business confidence in the CBD, with most groups in this bracket being regional offices for national and international groups which are demonstrating conservative expenditure. In addition to these groups, the State and Commonwealth governments are in lock-down mode due to the upcoming elections.


With this lack of demand and the supply additions from late 2012 and early 2013, incentives are now pushing 20% with one deal understood to be circa 25%. This increase in incentives will equate to a slow-down in rental growth for the remainder of 2013. 


The fringe and suburban markets are experiencing similar conditions to the CBD - soft tenant demand and incentives now pushing 15% in some circumstances.

New Car Park Levy

The introduction of a $750 pa carpark levy in the CBD continues to attract strong debate in the market with the Property Council of SA lobbying hard against its introduction, backed by some of Adelaide’s most influential CBD stakeholders.  It is becoming a significant campaign issue for both sides of Government with the upcoming state election in March 2014. The Liberal Party is promising to abolish the levy should they be elected.  To read a recent copy of our recent Viewpoint Research report on this issue, click here.

 

New Courts Precinct Mooted

The recent 2013/14 State Budget announcement by Premier and Treasurer, Jay Wetherill included funding for a new courts precinct to be built in partnership with the private sector.  The new precinct and commercial development will be located within the King William, Wright, Mill and Gouger Streets block.  The Budget provided $2 million to complete concept planning, in addition to significant funding to be held centrally to facilitate the construction of the new facilities (image shown).

Recent Deals

With the relatively quiet nature of the market in recent months, only a few significant lease deals have occurred:

  • NEC has committed to two floors in the refurbished 30 Flinders Street, relocating from 63 Pirie Street. The 1,600sqm deal was rumoured to transact with an incentive of 25% plus.
  • OZ Minerals has leased circa 1,000sqm at 162 Greenhill Road.
  • People’s Choice Credit Union leased 540sqm at 55 Flinders Street to accommodate their branch and site office while their new building is being constructed.
  • AIB committed to circa 1,000sqm in the ground floor of 27 Currie St, a sublease with Elders.

Current Requirements

Status update on:

  • Origin (8-10,000sqm) – shortlisted to three properties with negotiations continuing.
  • Law Society  (1,500sqm)– rumoured to be close to a deal.
  • Sparke Helmore (800sqm) – market suggests they have committed to 41 Currie St pending the ’go ahead’ on the building upgrade.
  • Marsh Mercer (1,000sqm) – shortlisted with negotiations underway.
  • DIAC (6,000sqm) – yet to respond to initial RFP.
  • Collection House (800sqm) – secured a new lease in 12 Pirie Street, Adelaide.

Recent new requirements:

  • Fairfax Media – seeking space for 1,000-1,200sqm in the Fringe, early 2014.
  • CBRE  GCS Undisclosed – 3,500-4,500sqm CBD, Frame, Fringe requirement for publicity listed company, late 2014/early 2015.
  • DPTI – undisclosed State Government tenant seeking 2,800sqm of CBD accommodation for early 2014.
  • Heathgate Resources – seeking 600-800sqm of quality CBD space for early 2014.
  • PricewaterhouseCoopers – early stages of a search for some 1,800-2,500 of A Grade CBD space with occupancy required by Jan 2015.
  • Torrens University Australia – seeking 3,000-3,500sqm CBD for early 2014.
  • Rex Minerals – has shortlisted options for 800sqm in the CBD and negotiations have commenced.
  • Austereo – quietly in the market for 1,200-1,400sqm, mid 2014, looking to relocate from Greenhill Road.

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Contact Our Team

 

Andrew Bahr

Director
t: 0411 049 183 
e: andrew.bahr@cbre.com.au
Michael Pfitzner
Director
t: 0408 807 823
e: michael.pfitzner@cbre.com.au
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