Opportunities in South Australia’s commercial property sector for local and interstate investors

Transaction specialists Kain Lawyers are delighted to announce their legal advisory role in the successful sale of 104 Frome Street, Adelaide, for $14,200,000. This deal stands as Adelaide’s largest CBD office transaction in over 12 months, signifying a shift in the city’s commercial property sector.

Kain Lawyers Director and Head of Property and Real Asset Transactions Jason Vernik said there have been substantial shifts in South Australia’s commercial property sector amidst the challenges presented by COVID-19.

“The commercial property sector in South Australia has undergone a rapid transition since the start of COVID-19, with significant supply coming online over the past few years. That said, Adelaide CBD has seen a high occupancy rate relative to other capital cities, and tenant demand remains strong.”

Mr Vernik further noted, “This has propped up local and interstate interest in South Australian commercial property at a time when commercial property has been viewed less desirably compared to other classes. Some of this interest, however, remains subdued as a result of continuing interest rate uncertainty and an unmet demand for higher yields.

“While South Australian transaction volumes remain down on previous years, opportunities remain for investors to acquire and upgrade ageing commercial stock or to undertake new development.”

The sale reflected an initial yield of 6.88%. Acting agents for the property were JLL.