Fund manager Quintessential is looking to offload an Adelaide office tower after leasing up a chunk of vacant space and completing a multimillion-dollar refurbishment of the property once owned by developer Con Makris.
Quintessential acquired the building on the corner of King William St and South Tce for $43.1m from Makris in late 2018, when around 30 per cent of the building was vacant.
But after more than $10m in upgrades since then, including a revamped lobby space, new end-of-trip facilities, and upgrades to lift and building services, the tower is now close to 92 per cent leased.
Industry sources suggest the tower could attract offers around $65m.
The 14-level, 11,697sq m building includes a basement car park for 25 cars. A majority interest in the adjoining multi-deck car parking complex is also included in the sale, offering long-term development potential in partnership with the neighbouring co-owner.
The sale campaign is shaping up as a major test for the Adelaide office market, with the current CBD vacancy rate rising to 16.3 per cent.
However Quintessential chief executive Justin Mills said the property was likely to benefit from the flight to quality trend of corporate tenants ditching older, lower grade office space for new and refurbished accommodation.
“Since acquiring 431 King William St in December 2018, Quintessential has invested more than $10m in building upgrades, delivering a high-performing asset underpinned by a strong tenant mix, high tenant retention and demonstrated leasing success,” he said.
“This is a well-positioned, income-secure asset with genuine rental growth potential for the new owners amid continued demand for high quality office accommodation in Adelaide.”
The sale campaign is being run by CBRE’s Ian Thomas and Alistair Laycock, in conjunction with Colliers’ Jordan Schmidt, Alistair Mackie, James Mitchell and Adam Woodward.
Mr Thomas said the building was home to a diverse mix of tenants, including law firm Norman Waterhouse, and its sale came at a time of significant investment across the state’s defence, infrastructure, innovation and health sectors, which was likely to support occupier demand.
“431 King William St has been extensively repositioned by Quintessential and is now one of the city’s leading CBD office assets, offering occupiers a highly accessible location, exceptional parking provision and fit-for-purpose accommodation that aligns with workplace demand.”