Local syndicate Southern Cross Investment Group has sold National Australia Bank’s Adelaide CBD headquarters to a Singaporean family for $47.2 million.
The 14-storey building known as NAB House at 22-28 King William Street contains 9640 square metres of B-grade office area and ground floor retail.
The bank occupies 63 per cent of the commercial space with the balance rented to other corporate tenants, the state government’s Country Health SA and the Commonwealth Ombudsman.
The purchaser was represented by inner east Sydney based Intergen Property Group.
SGIP paid $41.8m for 22-28 King William Street in mid-2014.
That vendor, MWQ Properties, picked it up six years earlier for $22.1m, later committing to a $25m renovation – more than half of which NAB covered – resulting in the NABERS star rating rising from 1.5 to 4.5.
First Adelaide CBD office deal since COVID
Knight Frank’s Oliver Totani, Guy Bennett and Rory Dyus represented SGIP.
Their sale price, they said, reflects a 6.75 per cent core market yield.
The asset has a weighted average lease expiry of three years but in 2024, NAB will be presented with its first of two five year renewal options.
“The deal was the first major CBD office investment transaction completed since the onset of COVID-19 in Adelaide, demonstrating the resilience of the…market,” Mr Totani added (story continues below).
“We don’t have the great peaks, nor the troughs – rather there is general stability,” the agent said.
“In times like this, where there is a global pandemic and uncertainty its worth its weight in gold.
“There are concerns with regards to the demand for office space moving forward but we believe that Adelaide, given it doesn’t have the supply side pressures [of other capitals], is likely to be one of the better performers during this time of market dislocation.
Mr Bennett said quality assets are always sought after by investors looking for strategic opportunities.
“King William St is a prestigious Adelaide CBD address, being on the city’s premier boulevard,” the executive added.
“It’s high profile position is a short distance to the transforming Adelaide Riverbank precinct, the new Adelaide Oval, brand new casino and hotel development and…[a] fast growing biomedical precinct.
“The building is also within metres of Adelaide’s best retail precinct, Rundle Mall, and the…city’s thriving small bar and restaurant scene located within Leigh and Peel streets.
“The high profile location is set to become the ‘new CBD’ as its direct locale is to be transformed by Charter Hall’s $200m office and retail development metres from 22 King William Street”.
The agency also recently sold Melbourne-based investor, Milemaker founder, Nick Andrianakos’ Nikos Property Group, an Adelaide CBD office at 50 Flinders Street for $185m.
The vendor of the 15-level, A-grade five year old asset was Cbus Property.