South Australia is often better known for its exquisite shiraz rather than as a destination for development and investment capital but that is all starting to change. 2016 kicked off with what is tipped as the largest direct property transaction in South Australia with the news that Blackstone has purchased Rundle Place for circa $400m at a yield of 6.5%. In addition to this, almost a billion dollars of development is underway or will commence this year on the Adelaide Riverbank with the second stage expansion of the Convention Centre, the Walker redevelopment of Festival Plaza, the $90m upgrade to the Festival Centre and the expected $350m Casino expansion.
Blackstone has agreed to pay $400 million for Adelaide's Rundle Place precinct in what is tipped as the city's largest direct property transaction.
But the good news doesn’t stop there, the State Government is working its way through the delivery of 1000 homes in 1000 days as it releases sites to market, the entry of Cedar Woods into the market with the Glenside redevelopment, the final shortlisting of developers for the Port Adelaide redevelopment and the Government will soon select a preferred bidder for the 7 hectare Old Royal Adelaide Hospital site in the coming months.
The future of Port Adelaide has been a key focus issue in debate on the economic future of Adelaide ever since the introduction of container shipping.
On the infrastructure front, there are $2.5 billion worth of projects at play with the Torrens to Torrens underway, Darlington Upgrade commencing and the Northern Connector project to commence in mid 2016.
The State Government is also in the process of finalising the sale of its CBD commercial stock and will shortly put its MAC portfolio, estimated to be worth $600m on the market.
And all this before Mad March – the season of Festivals really kicks off.
While all of this development is gearing up, the State Government will look to push its nation leading planning legislation through Parliament in the first quarter and will really start to engage with the broader community about engaging more deeply in the nuclear fuel cycle through the development of a high level nuclear waste repository.
Oft overlooked, South Australia is starting to attract the gaze of national and international developers and investors who see the state as a safe harbour location. While the state does not often enjoy strong grow rates, nor does the economy fall off the edge in hard times.
The State Government is investing heavily in the revitalisation of Adelaide's riverbank with about $1 billion in public and private investment.
With two years to run before the next State Election, the South Australian Government is driving hard to open up new opportunities and has shown itself open to new complex unsolicited bids.
Now is certainly the time for investors and developers to snap up opportunities across all asset classes.
MacroPlan is uniquely placed in the South Australian market to assist developers and investors looking to capture opportunities.
About MacroPlan: MacroPlan’s experienced and qualified economists align their understanding of macro-economic forces with micro-economic variables such as geographic and industrial characteristics, demographics, labour market shifts, resource demand and commercial realities. Contact Nathan Paine, General Manager – South Australia today to discuss your property research requirements.