Government-leased inner Adelaide office building up for sale

An Adelaide office building fully leased to the Federal Government is up for sale, with price expectations likely to be north of $8.5 million.

The single level property at 298-302 Main North Road in Prospect, around 6.5 kilometres north of the CBD, was built in 2011.

Improvements consist of 1,320sqm of office accommodation on a 3,220sqm site, with onsite parking for 58 vehicles and huge frontage of 61.37 metres to Main North Road.

The asset being taken to the market via a national expressions of interest campaign by Knight Frank agents Guy Bennett, Oliver Totani and Jack Dyson in conjunction with Colliers International agents Alistair Mackie, Jordan Schmidt and Rhys Newman.

The building is fully leased to the Commonwealth of Australia and occupied by both community service providers Centrelink and NDIS, on a recently renewed 3 + 3 year lease, following the end of the tenant’s initial 10-year term. The lease is structured on a fully net basis, with a current net income of $543,840 plus GST per annum

The lease provides for annual rental increases of three per cent per annum, with market reviews at renewal.

Main North Road is an established retail, commercial, showroom and essential services precinct in Adelaide’s high popular inner north suburb of Prospect. In the immediate vicinity are Northpark, Sefton Plaza and the recently refurbished Regency Plaza Shopping Centres, all major banks, pathology centre and numerous national brand retailers.

Mr Newman said the property represented a genuine blue-chip metropolitan office investment.

“This is a pandemic proof investment, leased by the Federal Government and occupied by ‘essential service’ providers, with a real and growing demand from the community for their services,” he said.

“The value of the asset is underpinned by its high-profile position on Main North Road, one of Adelaide’s main transport-oriented routes, being the main road for commuters travelling to and from the burgeoning northern suburbs made up of some 50,000 odd vehicles passing the site daily.

“Buyers will also be attracted to the significant land holding and impressive improvements.”

Mr Totani said the property was ideally positioned for the Federal Government tenant.

“Our community prides itself on its ability to provide a robust safety net for those most vulnerable, and to provide this service, the Federal Government needs a property in an easily accessible location such Prospect,” he said.

“While there is still up to five years of income to the federal government remaining, what we really like is the site’s potential for alternative users over the medium to long term.

“For example, it is perfect for medical and allied health given its high car parking ratio and profile.”

After two years of persistent disruption to lives and livelihoods, 2022 begins with the expectation that the worst of the pandemic has passed and prospects for a return to growth.

A wide range of indicators now point to economic recovery, with employment returning to growth, businesses aggressively seeking to hire, wages starting to rise and confidence rapidly growing across the economy as consumers prepare to unleash a post-lockdown.

Oliver Totani from Knight Frank believes: “Adelaide is destined to be a major benefactor of the greater market rebound, with a genuine multi-geared economy, and recognition that our city is seen as the third best in which to live, globally. “The city of churches, is now a genuine investment destination for many nationally and offshore.” The Expressions of Interest campaign for the property will close at 4pm CST Thursday, March 24.