News
Adelaide Properties Attract Local Money
Published: 23 Sep 2013 Author: Property Week Source: Property Week
Local private investors have poured $30 million into Adelaide commercial property over the past six weeks, with demand for prime real estate outstripping supply in the South Australian capital, according to Jones Lang LaSalle (JLL).
Until recently, the Adelaide market has had few opportunities for passive, secure investments. When several long-awaited opportunities did appear on the market, they were quickly snapped up by local private investors.
According to Jones Lang LaSalle, activity is picking up in the Adelaide market thanks to the low-interest rate environment offering an attractive spread between yield and cost of funds.
JLL said the properties sold featured long-term secure leases and strong lessee covenants in sought-after locations.
The largest of the properties was a 3300 sqm office building at 70 Light Square, Adelaide (pictured). The property sold for $14.5 million on a yield of 8.8 per cent. Anchor tenant is URS and the property has an approximate 4.5-year weighted average lease expiry (WALE).
Two local private investors purchased the property following a campaign that generated more than 50 enquiries. JLL negotiated the sale.
JLL said that while there was interest from overseas groups, syndicators and national groups, the depth of interest from local private investors is testament to the amount of money either held on deposit or available as equity in portfolios.