Adelaide's high-rise housing boom has not run out of steam, with developer Kyren Group pushing ahead with plans for a 36-level mixed-use tower on Frome Street in the CBD.
Colliers International has been appointed to market the 88 apartments in the building, which is still pending a development approval that was presented this week to the Adelaide City Council.Read more
SA's apartment market is about one-tenth the size of the eastern states, but it has been through a record growth spurt. In the year to May, authorities gave the nod to 3666 new apartments, townhouses and semi-detached dwellings, a new high. The city is at risk of oversupply, research house BIS Shrapnel said last year. Approvals don't necessarily translate into construction, especially at a time when banks are tightening loans to investors, but Colliers agent Nick Pelvay said he was confident this project would go ahead.
"In terms of the record number of approvals, or projects pending approval, ultimately the projects we've been involved with have typically all been successful and got out of the ground," said Mr Pelvay, who with Aimee Guo has been appointed to market the residential part of the building. "Kyren Group is well known and a group well known to deliver projects on time and of high quality."
The building on a 4163-square-metre site just off North Terrace would be taller than the 27-storey Vue tower at the southern end of King William Street and a separate 29- storey building just off Rundle Mall proposed by a consortium of private investors.
Mr Pelvay said he was confident a marketing campaign could start in the next two to three months for the apartments, which will occupy levels 22 to 36 of the building.
Pricing was not yet disclosed for the dwellings, he said.
Levels 11 to 21 will contain 60 one-, two- and three-room serviced apartments, while the first 10 levels will comprise a hotel.
A separate 21-storey student accommodation tower will front Synagogue Place, parallel to Frome Street, and will have about 268 beds with a ground floor cafe.
German fund manager Real I.S AG has paid $100 million for an office investment in Adelaide in what is the city’s biggest commercial deal in nearly a decade.
The building, at 400 King William Street, was developed and sold by the Kyren Group. The off-market sale was brokered by Colliers International agents Paul van Reesma, Alistair Mackie and Ian Thomas. They said it showed the city’s appeal for investment-grade assets.Read more
The Munich-based fund group now has a $1.6 billion portfolio with eight office interests in Australia, including KPMG House, also in Adelaide.
The group’s head of structured investments, Joachim Fritz, said the building was chosen because of its green credentials, long WALE (weighted average length to expiry) and tenant mix of government and corporate tenants.
The latest tenant, Workcover, moved into the building in July this year and brought the WALE to seven years. Real I.S bought the property on an 8 per cent yield.
Mr van Reesma said the sale was the highest Adelaide commercial transaction since City Central Tower 1 sold for $142 million in 2004.
He said the building was occupied by high-end office tenants within 18 months of its 2009 completion. The deal is expected to settle in December.
Colliers International said that the office vacancy rate in Adelaide was more than 7 per cent, but was expected to increase to more than 9 per cent next year as new projects were completed.
One building, at 30 Flinders Street in the city, came onto the leasing market in July this year with more than 12,000 square metres of space available. To date, more than 4000 sq m has been secured.
The new 36,000 sq m Tax Office headquarters, on Franklin Street, reached practical completion last week and two new buildings in Rundle Mall will also boost available stock and 2013 vacancy levels.
Kyren Group set wheels in motion with appointment of Colliers International. A new 36-level project planned for Frome Street, just off North Terrace, in the Adelaide CBD is set to become the city’s tallest residential tower.
Developer Kyren Group has appointed Colliers International’s Nick Pelvay and Aimee Guo to market the slender mixed use building which is set to occupy a 4163sqm site at 11-27 Frome Street in the Adelaide CBD.
The project will yield 88 apartments, with the residential component of the building occupying levels 22 to 36.Read more
“All 88 Apartments will all have completely unobstructed, outstanding views in all directions, so we’re anticipating strong interest from the local market and Asian markets, particularly in the two and three bedroom dwellings.” Mr Pelvay said.
Levels 11 to 21 will comprise 60 one, two and three bed serviced apartments, while the ground floor to level nine will be home to a 150-room hotel.
“The residential and serviced apartments will have separate car parking, entrance lobbies, and lift access from the residential,” Mr Pelvay said.
The project will also incorporate a separate 21 storey student accommodation tower fronting Synagogue Place, which will incorporate approximately 268 beds with a ground floor cafe.
Mr Pelvay said the project would be integral to the activation of the eastern end of the Adelaide CBD, including the activation and development of a key laneway, Travistock Lane.
“It will also benefit from the $50million expansion of the AdeLINK tram network, which will see trams extended along North Terrace to the East End, and the forthcoming redevelopment of the Old Royal Adelaide Hospital,” he said.
“Kyren Group has developed in excess of $500million worth of local projects to date and has a strong reputation as a developer who moves quickly on projects and delivers on time."
“Adelaide offers a magnificent and convenient lifestyle increasingly facilitated by the convenience of apartment living in inner city locations close to shops, restaurants, cultural and sporting venues and entertainment facilities and we expect strong interest from potential residents as a result."
“These factors are driving the significant growth of the local sector, with South Australian apartment approvals now representing 31% of the residential building market – an increase from 20% in 2012. Adelaide apartment approvals have nearly doubled in the past three years from 1695 in 2012 to 3385 this year."
Last year, Colliers International was responsible for the sale of more than 9,000 apartments and land lots nationally, totalling over $4billion in sales.
The new project at 11-27 Frome Street marks Colliers International’s second major residential appointment in Adelaide’s continually evolving residential apartment market, following the launch of its local Residential team earlier this year.
Mr Pelvay said it was an ideal time to expand the company’s existing, market-leading Residential Project Marketing services into the Adelaide market.
“We identified a strong need for a highly capable and experienced tier one team to support the growth of Adelaide’s apartment and infill markets and are pleased to now be offering that service,” he said.
The project is expected to create in excess of 350 construction jobs.