South Australia’s commercial market has come into this year on the back of the highest level of investment ever recorded in the state, according to JLL.

Data from the firm indicates transaction volumes in 2019 reached a total of $1.99 billion across all commercial sectors, smashing the previous annual record of $1.60 billion recorded 15 years ago in 2003.

This included $799.3 million from the office sector, $395.8 million from industrial transactions and $791.8 million from retail.

JLL Research Director Rick Warner told WILLIAMS MEDIA the outlook for investment in Adelaide's CBD was positive for 2020,

"Over the course of 2019, we had so many client engagements with major offshore investors who had never even considered Adelaide as a destination for capital before, let alone taken the time to visit the city," he said.

JLL Director of Research Rick Warner. Source: JLL 

"The positives of higher yields, deep liquidity and a lower volatility occupier base are attractive in this point in the real estate investment cycle. 

"It’s a similar story in the industrial sector. However, investors are being selective towards retail acquisitions based on catchment, capital expenditure requirements and supply risk.”     

In 2019, offshore investors were net buyers of commercial property in SA, accounting for 61 per cent of total transaction volumes ($1.21 billion across the office, industrial and retail sectors), according to JLL.

Conversely, offshore groups were net sellers of commercial real estate nationally in 2019-the first time in more than a decade.

The three largest office transactions in 2019 were brokered in the second half of the year. 

JLL SA Managing Director Ben Parkinson. Source: JLL 

These transactions included the sale of the Allianz Centre at 55 Currie Street for $148,250,000, the Grenfell Centre at 25 Grenfell Street for $134,220,000 and the SGIC/CGU building at 80 Flinders Street for $127,000,000. 

JLL SA Managing Director Ben Parkinson said while attractive comparative yields to the eastern seaboard office markets and an ongoing positive occupier demand profile had resulted in an unprecedented weight of capital into the Adelaide CBD market, the chances of reaching a $2 billion figure for the year of 2020 were unlikely.

“This ongoing investment demand that we’ve recorded throughout the past two years is expected to carry through 2020 with the only downside risk to transaction volumes is a lack of assets brought to market throughout the next 12 months,” he said.

“The significance of the $650 million sale of Westfield Marion that occurred in 2019 means we may not see the same kind of numbers again.” 

Click here to download more research from JLL.

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