Dexus joins conga line of Adelaide CBD sales

Dexus Property Group has sold an office building at 108 North Terrace.

DEXUS Property Group has put one of the Adelaide CBD’s biggest office towers up for sale as the city continues its 2016 resurgence.

The 12-level building at 108 North Terrace is to be sold in an international expressions of interest campaign that is expected to attract interest from both foreign and local investors.

The prime asset, which has tenants including Hewlett Packard, Optus and the South Australian Government, has a net lettable area of more than 20,000sqm, including ground floor retail, as well as 127 car parks.

Mixed-use giant: Adelaide CBD icon hits the market

Colliers International’s Ian Thomas, Paul Van Reesema, James Barber and Emily Fan are selling the property on behalf of DEXUS, with Thomas expecting many suitors for the A-grade building.

“We expect the calibre of the asset and the blue-chip tenancy profile to attract interest from local investors and syndicates, national groups and offshore purchasers,” Thomas says.

The tower was completed in 1999 and was significantly refurbished in 2014, with a focus on bringing its energy efficiency up to modern standards.

Dexus Property Group is selling its office tower at 108 North Terrace in Adelaide.

Dexus Property Group is selling its office tower at 108 North Terrace in Adelaide.

“108 North Terrace benefits from exceptional presentation having been actively managed, with the refurbishment focussing on attention to detail. The high level of refurbishment is evident in the quality of space and the finishes and particularly striking are the end of trip facilities, which are among Adelaide’s best,” Thomas says.

The tower’s sale will continue the Adelaide CBD’s boom year, with more than $531 million in deals during the first quarter of 2016, more than triple the sales volume from all of 2015, according to a Knight Frank report.

We expect the calibre of the asset and the blue-chip tenancy profile to attract interest from local investors and syndicates, national groups and offshore purchasers

Major deals already completed this year include Blackstone’s $400 million purchase of a mixed-use office and retail at 80 Grenfell St and Rundle Place on a yield of around 6.5%.

A private buyer last month paid $63.5 million for an office tower at 30 Flinders St, while that building’s vendor, Shakespeare, earlier bought 19 Grenfell St for $39.2 million and 30 Currie St for $28.75 million.

And in March it was revealed Adelaide’s famous Rundle Mall could be transformed after one of its major office and shopping complexes was opened up to investors.

The South Australian Makris Group is selling the City Cross shopping centre, which is being spruiked as a potential CBD development site.

Adelaide's City Cross shopping centre has tenants including Harvey Norman and A-Mart Sports.

Adelaide’s City Cross shopping centre is currently on the market.

Van Reesema says North Terrace is set to become a major target for investors and developers.

“The beneficiary of over $4 billion in public and private sector development and infrastructure projects in recent years, the Riverbank and North Terrace precinct stands to be the Adelaide CBD’s next major growth precinct,” he says.

“108 North Terrace is perfectly positioned to capitalise on the move of the medical, education and associated industries across the Adelaide CBD from the eastern end of North Terrace to the western end.”