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News release

Adelaide

2014 is shaping up as a big year in commercial transactions across Adelaide’s Office, Retail and Industrial sectors

JLL’s latest research figures show the office market has already hit a five-year high, while industrial transactions will exceed 2013 levels and retail investments are thriving


​ADELAIDE, 8 JULY 2014 – The volume of commercial property transactions across Adelaide’s Office, Retail and Industrial sectors is seeing 2014 shaping up as a significant year, with JLL’s figures for the first half showing the office sector has already hit a five-year high. 

The total sales volumes across office, industrial and retail markets for the first half of 2014 in Adelaide’s market totalled $447.97 million. For the full year 2013, total sales volumes across the three sectors were $591.27million. 

JLL’s Managing Director for South Australia, Jamie Guerra, said the office market figures have been driven upwards by the Colonial/Dexus transactions of 11 Waymouth Street and 108 North Terrace, Adelaide for $229 million. “The overall volume of commercial transactions is being driven by all three sectors across office, industrial and retail.”

Industrial transactions will exceed 2013 levels, according to Mr Guerra. “Although only $43.7 million of industrial property traded in the first half, the recent acquisition of the Coles Distribution Centre in Edinburgh by Charter Hall for $157m will see volumes exceed the $150 million of industrial stock transacted during 2013.”

Mr Guerra said the Retail market in Adelaide is doing extremely well, with a number of Sub-Regional and Neighbourhood shopping centres trading in the market in 2014 – including the latest sales of Golden Grove and Dernancourt Shopping Centres. JLL was involved in both transactions.

JLL’s Head of Retail Investments, Australia Simon Rooney exclusively negotiated the sale of Golden Grove Shopping Centre in South Australia for $129.1 million to Challenger Life Company Limited.

Golden Grove Village is a landmark shopping centre in Adelaide’s northern suburbs, anchored by tenants including Woolworths and Foodland supermarkets, Big W and Baby Target DDS, with a Gross Lettable Area (GLA) of 33,108.5 square metres. It is the only sub-regional centre in the surrounding region and is almost fully let at 99.6 per cent occupancy. 

Dernancourt Village Shopping Centre, transacted by Mr Guerra, sold to Primewest for $25.5 million following a national campaign which generated strong interest from across the country. Dernancourt Village Shopping Centre is a neighbourhood centre in Adelaide’s inner north eastern suburbs, located approximately 10 km from the CBD. The fully refurbished centre has a GLA of 8,422 square metres. It is anchored by a 15-year lease to Coles and a new 15-year lease to Goodlife Health Club.

“The level of interest in retail investments, as evidenced by the sales of Golden Grove and Dernancourt Shopping Centres, is reflective of the tightening in the broader Australian investment market and demonstrates the value purchasers are seeing in South Australia.

“Across the market, the strength of demand for quality investments is driving a tightening in yields. We expect further compression over the next 18 months,” said Mr Guerra.

Nationally, Australian commercial property investment volumes for the first six months of 2014 are tracking in line with the record volumes achieved in 2013.  As at 25 June, JLL’s preliminary figures show $11.5 billion of sales (above $5m) were recorded across the office, retail and industrial sectors.  This compares to the record $23.8 billion of sales recorded across all sectors in 2013.

Overall, transaction volumes in 2014 were inflated by the inclusion of the DXS / CPPIB acquisition of the CPA portfolio. Nevertheless, the participation of CPPIB in corporate activity highlights the underlying demand for direct real estate in Australia from offshore investors.

The JLL figures show that transactions for the national office market are tracking considerably ahead of 2013 results.  As at 25 June, JLL’s preliminary figures show $8.6 billion of sales for the first six months of 2014, compared to $13.1 billion of sales for the full year in 2013.