Charter Hall secures federal agency as anchor tenant for King William St tower

Developer Charter Hall has secured Commonwealth agency Services Australia as the anchor tenant of its $450 million development at 60 King William Street in Adelaide’s CBD.

Jan 28, 2021, updated Jan 28, 2021
Charter Hall's planned development at the current Southern Cross Arcade site on King William Street. Image supplied.

Charter Hall's planned development at the current Southern Cross Arcade site on King William Street. Image supplied.

The 10-year lease to Services Australia, which delivers social, health and other support services, covers 28,500sqm across 10 floors.

More than 2200 Services Australia staff will relocate to 60 King William Street upon the building’s completion in mid-2023.

Charter Hall says the pre-commitment takes the new building’s committed commercial net lettable area to more than 70 per cent, with the only available space left on the top three floors.

Built has been appointed as construction delivery partner for the project, with works on site already underway.

Charter Hall submitted new plans to the State Government in November after the minister responsible for state heritage stepped in to protect the site’s historic art deco façade from demolition.

InDaily reported in October that Environment Minister David Speirs rejected a request from Charter Hall to intervene in a Heritage Council decision and instead fast-tracked the listing of the Sands and McDougall building’s façade and canopy on the state’s heritage register.

At the time, Speirs criticised the developer for ignoring the façade’s local heritage-listing when it tried to submit plans to the State Commission Assessment Panel (SCAP) in July proposing to demolish the building.

Designed by globally recognised Cox Architecture, the revised development will include a 14-storey office tower with 40,000 sqm of office space and 3600 sqm of retail space for 3500 commercial and retail workers.

Charter Hall says more than 1500 local jobs will be created during construction, which will deliver the largest commercial real estate project in Adelaide’s CBD.

Senator for South Australia and Federal Finance Minister Simon Birmingham said the major commitment by Services Australia would help unlock thousands of jobs and provide a major boost for the state’s economy.

“This iconic new development teamed with the long-term commitment by Services Australia couldn’t come at a more important time for our state,” Birmingham said.

“With Services Australia now signed-up as the main tenant at 60 King William Street, construction can kick-off and that means jobs can start to flow.”

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The building will be owned by a Charter Hall partnership comprising the $7 billion Charter Hall Prime Office Fund (CPOF), its $1.7 billion Direct PFA Fund and an institutional mandate with the Victorian Funds Management Corporation (VFMC).

Charter Hall’s Managing Director and Group CEO David Harrison said he was thrilled to extend Charter Hall’s tenant customer relationship with Services Australia at 60 King William Street.

“Given the Commonwealth Government is a major tenant customer across our $45 billion property portfolio, we strongly value our relationship with the various government agencies we partner with and look forward to delivering a quality workplace environment that will support the delivery of their services to the South Australian community,” he said.

“Charter Hall has a long and proud history in South Australia, with a diversified portfolio of commercial office space, government and education facilities, retail, social infrastructure and logistics properties located throughout the state.”

The project, between Rundle Mall and Grenfell Street, will increase Charter Hall’s total investment in South Australia to more than $2 billion.

“We were very proud to officially open the $260 million GPO Exchange development in Adelaide’s CBD in October 2019, and we maintain a positive outlook for the state,” Harrison said.

“Building on this success, and in a major vote of confidence for the future of South Australia, 60 King William Street will be our largest commercial investment in Adelaide to date.”

South Australian Premier Steven Marshall said the project would leave a lasting legacy on the Adelaide CBD and create a huge number of jobs at a time when employment and private investment was greatly needed.

“Today’s announcement that Services Australia has made a 10-year commitment is very positive news and highlights the ongoing optimism in our state and economy,” he said.

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