Quintessential plans to regenerate 30 Pirie Street following $73m acquisition

22 December 2022

Quintessential Equity has finalised the off-market acquisition of 30 Pirie Street, Adelaide, a landmark office building located in the heart of Adelaide’s CBD.

Quintessential Equity purchased the property within its third commitment fund, Master Fund No. 3, for $73 million from Australian Unity Office Property Fund (AOF Fund), settling the transaction on 20th December 2022. A high-quality building in a prime location, 30 Pirie Street is an excellent investment for Quintessential Equity’s growing Adelaide portfolio.

Knight Frank agents Max Frohlich and Justin Bond, and Colliers agents Paul Van-Reesema and Alistair Mackie introduced Quintessential to the vendor.

Quintessential Equity will undertake significant refurbishment to regenerate the building both aesthetically and mechanically. With a substantial CAPEX budget of approximately $30 million, Quintessential Equity plans to carry out significant upgrades to the ground floor lobby, end of trip facilities, tenancy refurbishments, as well as modernizations to the lifts and building façade. Various energy efficiency initiatives are also planned to future proof the property, with a commitment to elevate the building to achieve a minimum 5 Stars NABERS Base Building Energy Rating.

30 Pirie Street will offer a variety of spaces including warm shell open spaces, fully-fitted suites and the regeneration of existing fit out, to meet a variety of tenant needs and create convenient and functional spaces to which the market has responded favourably.

The central Adelaide office block is currently 100 per cent leased to five tenants, including Telstra who account 91% of the building and have occupied the building since it was constructed. Telstra will be relocating to 60 King William Street upon completion, however propose to continue to occupy a portion of the building next year whilst their new tenancy is being completed.

Shane Quinn, Executive Chairman at Quintessential Equity, said “We are thrilled to have acquired 30 Pirie Street, a premium office building perfectly placed to capture demand for prime contiguous spaces. The acquisition allows us to build on our longstanding reputation and continued investment in Adelaide, growing our presence within a core CBD location.

“With over $30 million of upgrades planned to regenerate the building we intend to elevate the building to market leading in a prime CBD location. With Adelaide’s office market continuing to deliver strong returns, 30 Pirie Street will provide a high-quality income stream and exceptional tenant experience.”

Max Frohlich, Director, Head of Institutional Sales SA, said “twelve sales above $10 million have settled in Adelaide CBD since January 2022, reflecting a total sales volume of $441 million, up from a total sales volume of $251 million last calendar year. Around 70 per cent of these transactions occurred prior to the RBA’s first of eight consecutive cash rate hikes in May 2022.  

“However, this excludes five assets which are in due diligence or have exchanged and are yet to settle; including these assets transaction volumes measure approximately $735 million in total.

“Due to the recent sharp rise in interest rates, buyer demand has shifted from core to value-add opportunities where the increased cost of capital can be offset with enhanced returns from active management initiatives. 30 Pirie Street is another great example of this.”

Paul Van-Ressema, Director, Capital Markets & Investment Services, Colliers, said “the Adelaide office market remains resilient and continues to be a popular destination for investors.

“The sale of 30 Pirie Street instils confidence in the office market going into 2023 and we will expect to see genuine engagement from equity investors supported with debt solutions, to access the market looking for risk adjusted investments.”