What’s going on with Adelaide’s commercial property market?

JLL managing director and head of capital markets SA Ben Parkinson unpacks the anything-but-usual first three quarters of 2023’s commercial property market.

Nov 13, 2023, updated Jan 31, 2024
Photo: Alex Eckermann/Unsplash

Photo: Alex Eckermann/Unsplash

As the end of one of the most intriguing years in property fast approaches, I thought it would be useful to reflect on the activity and observations from the various sectors of the commercial property market.

Commercial Office

Adelaide’s commercial property market in 2023 has been full of juxtapositions. In the office sector, we are in the midst of the largest waves of supply to ever hit the Adelaide CBD.

Over 90,000 sqm of new prime grade office space was introduced to market over the last 15 months and another 97,000 sqm is currently under construction.

But on the other side of the coin, we are also seeing a very active occupier market with a disproportionate amount of centralisation and opportunistic upgrade activity.

As a result, quarterly net absorption has been positive for all of 2023, including the Q3 2023 figure of 37,500 sqm – the largest quarterly net absorption figure recorded in the Adelaide CBD since late 2008.

Tenants are taking advantage of better-quality space that is freeing up as larger corporate tenants move to the new, bright and shiny spaces.

Adelaide CBD – Market Balance, 2019-2023. Source: JLL Research as at Q3 2023

When it comes to the sale of office assets in the Adelaide, we have had only four major office transactions over $5 million in the CBD all year, and only two since February, both of which were below $15 million.

So, while there is confidence from businesses to relocate and upgrade accommodation, finding investors and capital to acquire these assets has been more challenging.

It is worth noting that this is certainly not an Adelaide or Australian phenomenon, but a global one as capital shifts to other asset classes for the time being. Consequently, South Australian transaction volumes are not expected to rival even the heavily impacted numbers of 2020.

Adelaide – Commercial Transaction Volumes by Sector, 2013-2023. Source: JLL Research as at Q3 2023


2023 has largely been about supply for the Industrial sector. Be it land to construct new developments or the availability of existing stock, this year has been one of the most challenging in recent times.

Supply delivery is still very low in the Adelaide industrial market, which is limiting occupier movements. However, as a by-product of this ongoing supply-demand mismatch, asset owners continue to achieve higher rents for their warehouse space.

Adelaide – Average Prime Net Face Rents, 2019-2023. Source: JLL Research

This asphyxiation in supply has provided some benefit for existing owners who have seen an increase in rent returns in all sub markets.

Rolling annual average rental growth is still in double-figures in our key industrial precincts, the Outer North (13.8% y-o-y) and the North West (12.2% y-o-y).

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This follows on from rental growth that exceeded 17.5% in both of those precincts over the previous 12 months to Q3 2022. We expect this to continue as the increase in construction costs and land rates apply upward pressure on economic rents into 2024.

Transaction activity has been a little more liquid in the industrial sector, with 18 major transactions recorded over the nine months to Q3 2023. But again, most were in the sub $15 million price cohort, with only three sales exceeding that mark.


While retail investor demand in Adelaide has been lower than previous years over the first nine months to Q3 2023, the first real on-market asset campaign of scale is likely to act as a barometer of the current appetite for retail centres.

This will no doubt be confirmed when the pending sale of Kurralta Central Shopping Centre can be made public, confirming the patient capital waiting for the right, non-discretionary retail investments in a tightly held South Australian market.

Despite limited activity from an investor standpoint, retail owners and developers remain very active.

We have seen delivery of multiple neighbourhood shopping centres in 2023, as well as Adelaide’s second major factory outlet centre in the form of District Outlet Centre in Parafield.

We expect total retail supply in Adelaide to reach 57,200 sqm – the largest volume of annual supply since 2016.

This significant wave of new retail space will be bolstered into 2024 and beyond by the massive extension of Burnside Village, as well as the large-scale CBD retail offerings of Charter Hall’s King’s Lane project and ICD’s Market Square.

Adelaide Retail Supply Pipeline. Source: JLL Research as at Q3, 2023

One sector bucking the trend here in SA is the pub sector, which at the conclusion of Q3 2023 reflected 9 transactions representing approximately $205 million.

This is an increase of over 240% compared to 2022 volumes for the whole year, with two investment sales delivering sub 5% yields.

We believe this to be a true reflection of the importance investors are placing in strength of lease covenant coupled with the consistency of trading performance that established pub venues deliver.

There is no shortage of innovative, modern commercial space entering the market in Adelaide at the moment, which has already been the catalyst for an equally innovative wave of new occupiers committing to new accommodation.

Whether it was setting new benchmarks in sustainable office design in our city, or underpinning expanding residential populations through new retail amenity in our suburbs, Adelaide’s commercial property market evolved in 2023 to support the state’s growth and the welcome shift in mindset from occupiers who expect more sustainability and amenity from their place of business.

For over 200 years, JLL has helped clients buy, build, occupy, manage and invest in a variety of commercial, industrial, hotel, residential and retail properties. Driven by our purpose to shape the future of real estate for a better world, we help our clients, people and communities SEE A BRIGHTER WAY SM. Learn more at

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