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A building that is home to National Australia Bank (ASX: NAB) on 22-28 King William Street in Adelaide has been sold by Southern Cross Equity Group for $47.2 million, representing the city's first major CBD office transaction since COVID-19 hit the SA capital.
The property, known as NAB House, was purchased by Sydney-based Intergen Property Group on behalf of a Singaporean family office.
The sale of the 14-level B-grade office building was negotiated by Oliver Totani, Guy Bennett and Rory Dyus of Knight Frank, and includes 9,640sqm of net lettable area.
It was exchanged with a WALE (weighted average lease expiry) of three years and a core market yield of 6.75 per cent.
Totani says the sale of 22-28 King William Street is another example of the South Australian office market's robustness.
"We don't have the great peaks, nor the troughs - rather there is general stability," says Totani.
"In times like this, where there is a global pandemic and uncertainty, it's worth its weight in gold.
"There are concerns with regards to the demand for office space moving forward, but we believe that Adelaide, given it doesn't have the supply side pressures, is likely to be one of the better performers during this time of market dislocation."
He says with South Australia's "super" response to the health crisis and the relative good news around the broader local economy, the property market is likely to be a beneficiary.
Bennett highlights King William Street is a prestigious Adelaide CBD address, being on the city's premier boulevard.
"Quality assets are always sought after by investors looking for strategic opportunities," he says.
"Its high profile position is a short distance to the transforming Riverbank Precinct development, the new Adelaide Oval, brand new Casino and Hotel development and Australia's fast growing biomedical precinct anchored by the recently built Royal Adelaide Hospital.
"The building is also within metres of Adelaide's best retail precinct Rundle Mall and the best of the city's thriving small bar and restaurant scene located within Leigh and Peel Streets.
"The high profile location is set to become the 'new CBD' as its direct locale is to be transformed by Charter Hall's $200 million office and retail development being metres from 22 King William Street."
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