The total value of transactions in the Adelaide office property market last year was double the size of 2017, according to a new study. 

Knight Frank’s Adelaide CBD Office Market Overview revealed there was $921.8 million worth of transactions over $10 million in the office market last year. 

The figure is well above the 10-year average of $430.73 million per annum and more than double the 2017 figure of $417.70 million. 

At a glance: 

• Knight Frank’s Adelaide CBD Office Market Overview revealed there were $921.8 million worth of transactions over $10 million in the office market last year.
• The figure is well above the 10-year average of $430.73 million per annum 
• The report found the investors were predominantly based interstate or overseas. 

One key factor in the uptick in sales was increased investment in the defence and renewable energy industries, which brought more tenants to Adelaide.  

Ben Burston, head of research and consulting at Knight Frank, said the abolition on commercial stamp duty, combined with the city’s attractive property yields compared to the country’s east coast markets, also contributed to the surge in activity.

“With a-grade space accounting for 46 per cent of the transactions, the demand for prime assets is evident as investors look to Adelaide due to its attractive value proposition compared to the lower yielding east coast markets,” he said.

 “Alongside increasing demand in the prime market, investors are also seeking more affordable, secondary assets or those with value-add potential.”

The report found the investors were predominantly based interstate or overseas. 

Knight Frank’s Victorian and South Australian head of institutional sales Guy Bennett said substantial Singaporean capital was also flowing into Adelaide.

“The strong investor interest in Adelaide has contributed to yields for prime assets continuing to firm,” he said. 

“In the six months to January 2019, average prime yields tightened from 6.93 per cent to 6.76 per cent, while the secondary market saw a fall in yields from 8.49 per cent to 8.35 per cent. 

“We expect 2019 will be another strong year for the Adelaide office market, with several assets above $100 million currently on the market, including 25 Grenfell Street and 55 Currie Street.”

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