Thebarton Square in Adelaide’s Inner West Sells for $22M

Thebarton Square, a 14,510sq m site that was the former Thebarton campus of the University of Adelaide, has sold for $22 million in an off-market deal by Knight Frank.

The property, situated just 2.5 kilometres west of the Adelaide CBD, is a true island site bordered by Stirling, Anderson, Holland and Windwood Streets in the northeastern corner of Thebarton.

With 11 titles across 19 allotments, the asset incorporates a corporate style industrial estate consisting of 14 commercial and warehouse buildings with a total lettable area of 10,714sq m, but it has future development potential for a mixed-use project with development of up to six levels envisaged under its Urban Corridor (Business) zoning.

It was purchased by a local private investor from KM Property Funds for $22 million in an off-market deal negotiated by Ryan Mills and Max Frohlich of Knight Frank. The sale reflects an initial yield of circa 5.58% and core market yield of circa 6.69% reflective of the rental reversion upside.

Mr Mills said Thebarton Square was an iconic site in Adelaide and being 90% occupied with a WALE of 1.9 years (by income), provided significant holding income to the buyer, however the major attraction was the high underlying land value in a city fringe location undergoing significant gentrification.

“The complex is leased to a mixture of tenants, including corporate occupiers Coca-Cola, Nokia and Viterra,” he said.

“The property has a net passing income of approximately $1.23 million per annum with strong growth potential, and currently 1,171sq m of NLA is vacant, providing significant upside.

“However, in the future the site has potential for a major redevelopment as it is zoned Urban Corridor, allowing a mixed-use development, including residential up to six levels.”

Mr Frohlich said Thebarton Square was a well-known site in a highly-regarded inner western location, which was another drawcard for the buyer.

“The buyer has a long-term investment horizon and intends to implement value enhancement initiatives including future mixed-use development,” he said.

“It is a true inner ring island site, so there is the potential to create something very special on the property in time.

“This site will benefit from significant mooted development in the area, including the proposed 1,000- home residential urban renewal project set to transform the historic 8.4-hectare former West End Brewery site into a thriving mixed-use community directly adjacent to Thebarton Square.”