Lease or Buy? Your Business Property Decision In Adelaide Lease or Buy- Your Business Property Decision In A | Page 7

“The strong investor interest in Adelaide has contributed to yields for prime
assets continuing to firm,” he said.
“In the six months to January 2019, average prime yields tightened from 6.93
per cent to 6.76 per cent, while the secondary market saw a fall in yields from
8.49 per cent to 8.35 per cent.
“We expect 2019 will be another strong year for the Adelaide office market,
with several assets above $100 million currently on the market, including 25
Grenfell Street and 55 Currie Street.”
Adelaide’s 2019 Market Insight And Predictions
Following a strong end to 2018, momentum continues to build in South
Australia as positive economic conditions and investment in infrastructure
drive activity and growth.
Much of this activity has centred around the attraction of new industries (hi-
tech and innovation), securing of defence contracts and a boom in 3PL
operations as a result of e-commerce activity. As a result, supply across the
market has tightened which in turn has not only seen some improvement in
rents and pricing but it has caused a rise in demand for vacant land.
We expect new construction levels to increase in the coming 12 months as
occupiers and tenants seek to take matters into their own hands rather than
wait for the existing stock to come available. This also creates an opportunity
for developers to start to speculate construction in order to meet the current
and future levels of demand expected as the growth industries mature over the
course of the year.
From an investment point of view, Adelaide has become a destination for
capital placement with interstate funds descending on the market to secure
well placed industrial assets.