Knight Frank’s Adelaide CBD Office Market Overview – September 2018 found that in the twelve months to July 2018, overall vacancy rates declined from 16.1 per cent to 14.7 per cent. 

Tenants looking to expand their operations and investors attracted to the value proposition of the city following the abolishment of stamp duty is to thank, according to Knight Frank.

Key takeaways from the Adelaide CBD Office Market Overview:

• Adelaide CBD vacancy rate declined from 15.4 per cent to 14.7 per cent in the six months to July 2018. This tightening of the vacancy rate is expected to continue due to the increase in the level of tenant enquiries and the limitations associated with existing supply.
• Year to date transactions currently stand at $700.05 million for assets greater than $10 million, which is a historically strong result. This trend is expected to continue due to stamp duty recently being abolished.
• Leasing activity has improved over the previous six months to July 2018 with tenant expansions driving much of this change. Adelaide remains on the radar for investors, particularly new investors, as approximately 75 per cent of the transactions over $10 million came from investors new to South Australia.

Ben Burston, Knight Frank’s Partner, Head of Research & Consulting, Australia says the market is expected to continue to tighten as there is currently a climate of positive tenant demand with no significant increase in supply forecast in the short-term.

“A lack of recent development completions has helped the vacancy rate turn the corner and begin to fall. The second half of the year will also see little in the way of completions, with new supply very limited until late 2019 when the GPO Tower on Franklin Street completes, delivering around 24,500 sqm of new space, although the majority of this is pre-committed," Mr Burston said.

"This coupled with an increase in demand driven by business expansions and new tenants in the defence, engineering and non-profit sectors has contributed to increasing rent, particularly in the prime market.”

Click here to view Knight Frank’s Adelaide CBD Office Market Overview – September 2018.

For more information, contact Knight Frank's Ben Burston via the details below.

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