Kim Bigg (00:08.438)
Hi everyone and welcome to Show Me the Perks. This is Kim Bigg from Perks Accountants coming through to you again with the next episode of our podcast, number nine episode it is now. And with me today we have Ben Parkinson, who is the managing director of JLL. Really excited to have Ben along today. And I’m going to throw across to Ben now to provide us with a brief update upfront on what his role is with JLL and…
bit of background as to his career as well.
Ben Parkinson (00:41.107)
Yeah, thanks, Kim. And thanks for having me. Great to be here to share a few insights. Look, Ben Parkinson, Managing Director of JLL here in South Australia. Born and bred South Australian, but a little bit of a tourist. Spent the best part of 10 years in Melbourne and before that, six years in Sydney. I left Adelaide, what feels like a long, long time ago now as a valuer specialising in the valuation of hotel and leisure properties.
Then was fortunate enough to set up a national pub brokerage business in Sydney for one of my now competitors and had some fun there selling pubs in Sydney at the heart of the market and then moved to client side. I spent nearly 10 years at Coles Supermarkets in Melbourne and looked after a few roles there, looked after their liquor hotels and hotels and liquor portfolio, looked after their capital transactions team for a period. And then the last three years I was there was steering the ship on a
$1 .9 billion portfolio across distribution centers, development sites, shopping centers, and liquor stores. And then saw the light, thankfully, moved back to Adelaide in December 2019 and dodged the Melbourne COVID bullet, that’s for sure. So.
Kim Bigg (01:53.814)
Fantastic.
Kim Bigg (02:01.174)
Fantastic. You must have had a sense of relief living in Adelaide through that period, given you had only just come back.
Ben Parkinson (02:08.691)
I think a bit of survivor’s guilt and relief.
Kim Bigg (02:10.966)
Yeah, bit of guilt, bit of relief. Yeah, that’s okay. Shout out to all the Melbourne listeners. Hopefully they don’t take too much offense to that. So just moving on from that, that’s a really good breakdown of your previous career. I can clearly see now why you’ve taken up such a senior role with JOL in Adelaide, given your background, very broad across pubs, supermarkets and otherwise. So I’m sure it sets you up pretty well for your…
for the role you undertake there. So today’s podcast is really, I’m hoping to take listeners together with Ben through a bit of an insight into Adelaide and admittedly today’s episode is quite Adelaide specific. This podcast tends to provide insights for SMEs and their owners to contemplate, you know, different aspects of tax and accounting and just the economy in general.
And today’s episode, I hope, will provide an insight into the property market of South Australia and how this has changed over recent times. Ben’s been kind enough to provide a market update, which he prepared going back a few weeks ago and provided and has presented to some people across Adelaide already. And I’m going to just ask Ben to describe some of that presentation to the listeners here and then ask a few additional questions. Just…
to gain some more insights, which might be useful for listeners who are either investors or business owners or otherwise and looking to gain a greater insight into the Adelaide property market. So without any further ado, I’m just gonna throw across to Ben. Ben prepared the South Australian, he’s prepared a market report relating to the South Australian property market. Can you just describe briefly some of these items?
particularly with regards to population growth and economic growth for South Australia in recent times.
Ben Parkinson (04:14.515)
Yeah, thanks, Kim. The overarching theme within the report that we prepared is optimism. If you look at when I left Adelaide 20 years ago, look, Olympic Dam wasn’t expanding. Holden had announced their closures. Mitsubishi had already closed. And it was all doom and gloom. We had tourism and we had grapes. That was fantastic. But you look at it now and the investment and the growth that’s happened from the government and their investment and also private investment in space, cyber, tech, defence.
and information and now biomedical, particularly with the western end of North Terrace, gives us reason to be optimistic about the state and optimistic about where we are from a macroeconomic perspective and the investment matching that. I remember plenty of commentary, you know, soon after I finished uni about negative population growth and that brain drain happening. Now, the fact that we’ve got 29 ,000 positive population growth this year and forecast to be 30 ,000 or more next year should give us…
reason to be optimistic about input and growth in our state. Look, as long as we get the right type of skilled migration, that’s probably something worth highlighting there.
Kim Bigg (05:22.646)
And just to highlight on the population aspect of South Australia, it is currently, if I look at the report at its highest level for, I’m going to say, well, 30 plus years. Is that fair to say? The population growth over the last 12 months is at really all -time highs for most people in today’s, going back, I guess, until the baby boom has started to come through in terms of population growth in South Australia.
Ben Parkinson (05:46.739)
Yeah, and I think that’s a great cause for optimism with that growth and for the highest growth in 30 years, it’s really, really positive. And with that, there also comes some benefits with that. Our retail trade by comparison is really strong. Our GSP is really strong. Our turnover growth and our unemployment is quite low by comparison, historic lows at the moment. So there’s some great fundamentals there.
Kim Bigg (06:13.782)
Absolutely. And that’s something we’ll touch on as we go through this podcast a little bit later in terms of what that population growth and the general buoyancy of the Adelaide and South Australian market has actually done for property across South Australia and where some of the tension points have started to be created. So just highlighting a little bit more, just to hone in on that in terms of the buoyancy of the South Australian market more recently, we have…
population growth is at 30 year highs, 30 year plus highs really, at least. So the best it’s been in 30 years, we’ve got retail growth, which is well and truly ahead of the national average at the moment, which for South Australia is not a common place that we’ve been in. We’ve got GSP’s up gross, or GDP gross service product, you might have to explain a little bit further what GSP is. But basically all indicators are leading towards
South Australia going very strongly comparatively to how we have been in the past.
Ben Parkinson (07:17.331)
Yeah, I think if you look at the Commonwealth Bank, those recent reports, the state of the states, I think it is that everyone was surprised at the last one that was released that South Australia was number one. And we’ve gone back to back again with those fundamentals that the Commonwealth Bank is saying that South Australia as a whole economically is the number one state, which is it feels like unchartered territory for South Australia, right?
Kim Bigg (07:37.366)
early. And look, it’s a really positive thing. And for all people living in South Australia, we know, you know, it’s, it’s nice to concentrate on the positive aspects as opposed to, you know, as you say before, lots of change in 20 years in Adelaide and South Australia and the positivity of, of population growth versus brain drain, which was a common discussion topic going back 10 years ago was, was not as good a topic to talk about. So on to property in South Australia, and obviously, obviously,
As I mentioned before, the population growth and general buoyancy of the market here has led to some different changes across the South Australian market, both from an industrial property perspective, office perspective, and retail perspective, perhaps. Before we jump into those specifics within Adelaide, how does Adelaide compare broadly to the national market from a property aspect at the moment?
Ben Parkinson (08:32.947)
You know, it’s a good question. I mean, if you look at the Adelaide CBD office market as a proxy for comparison to other states, which is an easy comparison because that’s where most of the data is collected. Adelaide has the most diverse occupier market of any CBD city in Australia. Now that might sound like a positive or a negative depending on which side of COVID you’re on, but that diverse occupier profile…
More than 60 % of all office inquiries in the CBD are generally less than 500 square meters in size. So we don’t have a lot of those corporate head offices. Now, when we’re riding the peak of the market and say charter hall, we’re chasing long -wave rate products to get nice long single tenant government assets, that was perhaps viewed as a negative. But now through in the current environment where we’ve got flexible working and working from home and a different way of occupying the offices, that diverse multi -tenanted asset has been a really
resilient asset, particularly in CBD offers, which means you haven’t had a risk exposed to just one tenant or just one occupier.
Kim Bigg (09:36.758)
And when you compare that to other CBDs in Australia, Sydney, Melbourne, Brisbane, Perth, et cetera, I mean, how does that compare? I mean, as you say, the diversity means, you know, there’s still some, I would imagine there’s still some businesses in capital cities across Australia who are, let’s say, slowly coming back to working in the office full -time, et cetera. So those places who had, as you say, big corporate headquarters, you know, they’ve probably been…
Landlords have been trying to get them back in. Adelaide with a more diverse base doesn’t have quite the same level of risk factor attached to that because there’s a broader cross -section of CBD office demand.
Ben Parkinson (10:18.899)
Yeah, that’s right. And I think, look, we haven’t been a gateway city. We’re not a gateway investment city with the big head offices, not like back in the 50s and 60s when we were a manufacturing heart of Australia. So what that’s meant is that some of those cities have had a longer and a harder journey of getting the workers back into the office five days a week or four days a week. And I think, to be fair, that’s directly related. It feels like to me directly related either to your cost of parking.
or your commute time. The longer you are from the city, the less efficient you feel on your commute. So Melbourne and Sydney probably makes sense, particularly Melbourne at the moment. It’s a harder journey to get people back into the office. And I think at the moment from an investor perspective, that with the lowest office vacancy rate in the country in Brisbane, that Brisbane has probably overtaken Melbourne as an investment gateway. So you’d probably view Sydney and Brisbane as the two gateway cities for investment right now.
And the Brisbane market’s shown great resilience and that low vacancy rate, by comparison to Adelaide, if in round terms, we’re double that. We might have an 18 % vacancy rate in Adelaide by comparison to Brisbane with a 9%. So it’s not surprising that investors are looking at a market where you have more confidence in leasing at a reversionary upside than perhaps Adelaide.
Kim Bigg (11:39.35)
Yep, absolutely. And jumping onto Adelaide more specifically, in your report you’ve referenced that, you know, really a wave of additional office supply within Adelaide, which is, I mean, I’m going to say unprecedented, certainly in recent times, it would appear that we haven’t had this level of new office space come onto the market and yet somehow,
the resilience of the Adelaide market and maybe just the buoyancy in general of the Adelaide market has meant that quite a lot of that has been absorbed, that extra space that’s been created. Did you just want to talk us through some of that and how that’s been able to be absorbed across the CBD?
Ben Parkinson (12:22.259)
Yeah, I think any time and in any market where you’ve got more than 12 % addition to your CBD of brand new stock in an 18 month period, that’s an enormous addition of supply by comparison. And that’s the, I mean, the CBD, the core of the CBD, excluding the fringe of Fullerton Road and Greenhill Road, it’s 1 .4, give or take million square metres of space. So we’ve had a really, really big addition to the CBD. But what we’ve seen recently and with the change of…
Kim Bigg (12:33.494)
Yeah, absolutely. Yeah.
Ben Parkinson (12:50.003)
demand from employees and what they want in an office is amenity. Your employees really, they want walkability to cafes, they want accessibility to public transport and they want choice. Now, what we’ve seen in recent times is there has been a centralisation of tenants from Greenhill Road and Fulham Road that have moved into the city or are moving into the city and whether that’s AGL or whether that’s RAA, it could be perched. And it…
Kim Bigg (13:14.486)
Well, that could be Perks. Perks has done that ourselves. We’ve done that two years ago, so yeah.
Ben Parkinson (13:19.475)
And I’m not suggesting that the previous location of the corner of Fullerton and Greenhill Road isn’t a great location, a great building, but if you’ve got a choice for your cafes, your restaurants, your walkability, your accessibility, and even maybe walking over to Rundle Mall for a little bit of retail therapy on a nice day, it really increases that appeal.
Kim Bigg (13:39.446)
Yeah, absolutely. That was definitely one of the biggest factors for us is really the demand from the staff for the higher level of amenities and really being around, you know, in the CBD, more vibrancy, all those things really starts to come to the fore now. And that’s a good segue. I mean, what are you seeing with the market in terms of this new 12 % of office space that’s come online and just more generally, the demand is for high quality upper end.
office space or how do you view that, how do you view the demand coming through?
Ben Parkinson (14:13.619)
Well, almost all of the new space that’s come to the market, whether that’s at 83 Peary Street with Seabass or at 60 King William Street with Charter Hall or Walker’s down at Festival Plaza, almost all of that space is occupied. So with your larger, more sophisticated corporate tenants that occupy larger space, they’ve all got net carbon zero targets they need to be conscious of to 2030. So if you need to…
adhere to what you’ve undertaken globally or nationally, you need to go into bright and shiny space that ticks all the boxes, whether it’s Green Star or whether that’s world ratings. You need to make sure that you’re in space that can fulfil those obligations.
Kim Bigg (14:56.342)
And just to touch on that, if I take 60 King William as an example, it’s a magnificent building that’s been created there and it’s probably something that Adelaide hasn’t had in the past as in large scale sort of national brands, National Australia Bank, I believe is the major tenant there. Is it a sign of confidence in the Adelaide market that businesses like National Australia Bank by virtue of coming in and…
being the major tenant there for Charter Hall, are actually willing to spend big amounts of money in Adelaide on such a high quality, I guess you’d call them, AAA grade, premium quality office space. It’s been great for the CBD to have someone willing to spend that money and really upgrade the vibrancy of the quality of the office space, if nothing else, as well as the vibrancy and feel of the CBD.
Ben Parkinson (15:50.515)
Yeah, I think it’s a 60 King Williams, a great cross section of the tenants. So National Australia Bank, they moved in there from 2020, 22 King William Street, which is an older office building, perhaps built in the 1960s. You had Telstra that moved in there from 30 Peary Street, which again was a building that was purpose built for them that they occupied wholly. And as their space requirements reduced, they didn’t need a 20 plus thousand square metre building anymore. And then the Department of Human Services. So and the
federal government agencies moved in there. All three of those groups have got net carbon zero requirements post 2030 and need to go into new and bright and shiny space.
Kim Bigg (16:29.846)
So there’s a bit of a theme there with regards to if, and I’ll speak now to maybe the SMEs and investors we may have within the perks climate base or within the listener base of the podcast. You really got to start turning your attention to some of these net zero factors when looking at your properties in terms of the requirement to upgrade. And people probably look at these things and think there’s a cost that’s attached to it, but perhaps the payoff to the cost is that the…
the demand from tenants and high quality tenants is definitely there.
Ben Parkinson (17:04.051)
Yeah, I think, and that’s the thing, if you’ve got old gas boilers in your building and you’ve got the opportunity to install heat transfer pumps in there, then look at the costing and look at the opportunity there. If you’ve got the chance of looking at renewable energy, without doubt, look at that, because these are factors which will help you retain tenants. It might not be the fact that you’re attracting brand new tenants, it’s what do you have to do to retain the tenants and give them a reason to stay with you for longer.
Kim Bigg (17:29.718)
And to that point, if you’re an investor with an older building and you’re contemplating this, I mean, at the moment, I gather the demand for older style buildings with gas boilers, in need of upgrade, et cetera, you’re struggling to find the demand for those, is that fair to say?
Ben Parkinson (17:48.915)
Well, I think from a tenant perspective, it’s certainly part of their decision making process. If you’re a small, proprietary limited company that occupies one to 200 square metres and you run a financial planning business or an accountant business or a dental practice, you probably don’t have the same net carbon zero targets that the corporates will. So you might be happy in those buildings as long as they satisfy your criteria about location, convenience and amenities.
But if you’ve got bigger floor plates and you want to retain and attract some larger tenants and larger corporate tenants, then you certainly need to be mindful of what your capital, what your CapEx program looks like to retain those tenants or attract some more tenants who might be finding value up the chain. Because with all these tenants moving to the brand new bright and shiny space, that’s created vacancies in the older A -grade stock.
Kim Bigg (18:37.846)
Yep, yeah, yeah, it would be. And some of it, there’s some really high quality buildings around at the moment. The CBA ones just around the corner from us. And obviously the NAB one and Walker’s ones are all gonna be very high quality. So they must be coming from somewhere. Just to change tack a little bit, moving on to the, let’s call it the industrial space in South Australia. Sort of the flow on effect of the heavier populate, like the population growth, more people coming into the state, the buoyancy of the…
general economy in South Australia as per the CBA report. I’m hearing around the trap, so there is some, the need for industrial property is very high and certainly hard for some tenants looking for space. How do you describe the industrial space, both across broader Adelaide, I’ll say, as well as regional, if you like as well.
Ben Parkinson (19:31.955)
Yeah, the Property Council commissioned a report into the land supply, industrial land supply in metropolitan Adelaide recently, and JLL partnered with Asia Australis to author that report. And basically what it said is, is for shovel -ready industrial land in South Australia right now, we’ve got less than two years supply. Now, if you’re looking at that, we take up 60 -odd hectares of industrial land in this post -COVID world, and…
we haven’t got enough supply there at the moment. Now what that means is there needs to be some productivity from the state government, then there’s some productivity from the private sector and also in the industry, more broadly industry to accelerate some of that land over the next two to three years. Because there’s also an overlay, which I’m sure some of your clients have experienced here, which is the compulsory acquisitions that’s happened on South Road. The really, really important and state significant infrastructure program.
to complete the Torrensville to Darlington South Road extension, which will benefit all of us and say that if you’ve been on that road from the Southern Expressway down to past Castle Plaza, it’s a horrible drive. But there’s been more than 900 businesses that have been compulsory acquired and the market hasn’t.
Kim Bigg (20:50.102)
and a lot of those industrial, hold on, yeah.
Ben Parkinson (20:52.627)
Yeah, exactly. Industrial, large format retail, traditional retail, some education as well. And we as a market and we as a government haven’t created 920 more locations for those businesses to go. So it’s created a demand spike. So you’ve seen unprecedented demand from tenants. We were selling a property in Kenttown and we had seven or eight inquiries, I can’t remember, from groups that have been displaced on South Road.
Now traditionally, if you were in Richmond or on Marion Road or South Road, you wouldn’t be going to Kentown. You wouldn’t be looking at something to two or three times the land value. But because they’re displaced and there’s not great supply at the moment, there’s a lot of competition for space. So the industrial market has been really, really buoyant and buoyant recently by that demand spike, but also on the back of COVID. And I know I’ve mentioned COVID a few times, but COVID changed the way we shop.
If the amount of parcels that come into my office from my team members is anything to go by, online shopping is accepted now and warehousing and industrial logistics is generally part of the retail framework where it wasn’t so much previously.
Kim Bigg (22:03.478)
So there’s definitely a trend towards logistics and industrial, so the industrial demand isn’t going anywhere and you couple that with your statement at the outset that there’s really only two years worth of supply coming along, that would appear to be the industrial property market in South Australia at least, you would expect to remain pretty buoyant over the next few years.
Ben Parkinson (22:26.163)
Yeah, great.
Kim Bigg (22:27.702)
Moving into residential space and there’s some quite good slides and reports that you’ve put together regarding the residential space in Adelaide. And certainly when I was reading through it, I was very interested to read. I think it’s Adelaide residential market, perhaps the tightest market in Australia nationwide or near enough to, which probably won’t surprise any of the people listening who have had trouble either buying a home.
for those trying to buy a home as well as those trying to rent as well, which has been incredibly hard. So yeah, perhaps if you could describe the residential market. I know there’s some additional sort of tangents you might jump into as well regarding the buy to rent scenario and student living in Adelaide as well, which is a very important part of our market, the student market in South Australia.
Ben Parkinson (23:23.123)
Yeah, I think it’s right. I mean, the residential, the shortage of residential property at the moment and affordable residential property has been well documented. The state government has come out recently and redeveloping the land at Seton, which is great. They’ve undertaken to to develop a thousand homes on the SA Brewing site, which will be great to provide some affordable housing near to the city. But with that, there is going to be a lag. There’s no question about that. So we’ve seen median house prices up.
15 .8 % in the last 12 months. Unit prices have been up nearly 17 % in the last 12 months. So there’s been unprecedented growth for a market like Adelaide, which historically has seen fairly moderate growth. So we’re looking at low vacancy levels, we’re seeing high growth, which means there are going to be barriers to entry for first home buyers, key workers or affordable, those seeking affordable housing. So we again need to see some cooperation from the government and from private industry and community housing providers.
to solve those problems. And when I moved back from Melbourne, there was lots of conversation about Build to Rent being this silver bullet for the Adelaide rental market for residents to solve the rental crisis. Now, Build to Rent in Adelaide has been very slow from a take -up perspective. If you combine, I think, 60 % market share in Melbourne of all Build to Rent projects, that’s…
I think if you combine that with Sydney, it’s close to 85 % just in those two markets, which tells you that built to rent hasn’t been taken up as quickly in other markets, probably because we haven’t got a very mature apartment market here in Adelaide. Now, I think that price differential where the first home buyers are priced out of the inner city market will mean that our apartment market, particularly the affordable apartment market, will mature quite quickly. And that should benefit and accelerate the built to rent market where…
that doesn’t serve the affordable end but more the, perhaps the aspirational end of the rental market.
Kim Bigg (25:23.894)
Yeah, absolutely. No, look, it’s clearly, and maybe you might like to comment on this, Adelaide’s accommodation density, it’s really been quite low comparable to Melbourne and Sydney. I mean, how do you see that changing in the moment? There seems to be quite a few plans around the inner seat, sort of the next rung out of the CBD within Adelaide and increasing the density profile of residential around there.
I presume that’s part of the buy to rent scenario as well as trying to lift the available sort of home ownership and apartment ownership capacity within Adelaide through there as well.
Ben Parkinson (26:04.115)
Yeah, I think with what we’ve seen in Kenttown over perhaps the last 15 to 20 years where there’s been the gentrification and the relocation of some industrial users that have created that medium to high density apartment living, that’s probably a really good example of what has happened. We’ve also seen it in Prospect where that’s come around with the upgrade of Prospect Road. We expect to see more of that, certainly in the inner west with those industrial land uses and the fundamentals if you’re across the road from the parklands close to…
public transport and you’ve got some good accessibility and some affordability, then that’ll make an apartment market desirable. And I think with that, I expect to see, what I talked about before with that centralisation of tenants coming into the CBD off Greenhill and Fullerton Road, I would expect to see over time, particularly as planning has changed on Greenhill Road, where you can get in some spaces, five levels in some spaces, up to eight levels of development there, that I expect to see those low density office land uses change.
over time to apartment users to take advantage of the proximity to the city, but also the views over the parklands.
Kim Bigg (27:10.678)
Yep, absolutely. And this is obviously a trend you expect to see to continue, you know, people continuing rises in density across inner suburban areas, across the next, the coming, well, really for the future, I suppose, for Adelaide, really.
Ben Parkinson (27:28.595)
Yeah, it’ll have to be. If we’re going to maintain our reputation and functionality as a convenient, drivable city, then we’ll need more population in the inner city.
Kim Bigg (27:39.542)
we all love and we all appreciate, which is all the reasons why everyone comes into the CBD and continues to fill up our office towers, because it’s easy to get around. One of the positives of Adelaide, which I’m sure you’ve appreciated having come back to Adelaide from Melbourne and Sydney, is that, I don’t know whether we’re still the 15 minute city, but we’re closer to it than the other mainland states. So I’m just gonna change tack again. So just moving on to investment and finance, just connecting into.
Ben Parkinson (28:00.659)
I think so.
Kim Bigg (28:08.726)
property market in South Australia. Just describe for me if you can how the Adelaide market is being viewed by investors more generally, more broadly, both on a national level. Is Adelaide attractive? And also from an international level, are you seeing attractiveness in Adelaide from an international scale where they’re actually starting to look at Adelaide with all these positivities that we’ve been talking about in terms of the…
buoyancy of the market, the population growth, the really upbeat mood in Adelaide, you’re starting to see that resonate with investors nationally and internationally.
Ben Parkinson (28:47.635)
Yeah, I think if I can start with international, I mean, I was in Singapore about five weeks ago up there with the team and we’re selling a project here in Adelaide, which I can’t mention, but it was $150M office development. And I went there with low expectations. I went there expecting one because it was an office investment that I was expecting the Singaporean groups to go, look, we’re not in for office, we like retail, we like industrial. And surprisingly, we got…
positive response there that the office market was, it was on their radar, it wasn’t off the radar completely. And second of all, I was expecting a flat no because it was Adelaide. And not because I’ve got anything against Adelaide, of course, but maybe just from office and Adelaide expecting a no. But surprisingly enough, I got quite a positive response from the groups there. And it was clear that the primary investment locations are Sydney and Brisbane for office investments. But…
Melbourne is on the bench for the time being and Adelaide gives a genuine opportunity for diversity in their geographic investments. So that was really positive. So from an international point of view, that gave me reason to be optimistic about the market moving forward. And I think the sense from a national perspective is Adelaide will always be, if you’re a multiple property owner nationally, Adelaide will always be part of your portfolio, but it’s unlikely it’ll be the first acquisition in your portfolio.
Kim Bigg (30:16.822)
So the attractiveness and the driving force behind the attractiveness at the moment is partially because people want some diversity and also just the fact that Adelaide is a little bit more buoyant than it has been and greater growth projections is making people think, you know, if we’ve already got some exposure to Melbourne and Sydney, Adelaide’s really starting to resonate with them as a place that they can get some exposure to commercial property that’s a bit different. And as you said from the outset,
the diversity of the Adelaide CBD is obviously quite different to the other states, so I guess it gives them a bit of an alternative to their investment portfolio as well.
Ben Parkinson (30:55.411)
Yeah, and I think that provides a genuine competitive advantage for investors in Adelaide. So if some of your clients are sitting there saying, do I want to invest in a syndicate or do I want to invest in an office building here? It gives you a genuine advantage over interstate investors because you get the South Australian market, you get the fundamentals, you get the micro details of the location and the convenience of the East End or Frome Street or something like that. Whereas others looking from the…
from the eastern states might not understand that walkability and convenience of a location like that.
Kim Bigg (31:27.414)
Absolutely. And just in a general case there, there’s been a lot of other states, I’ll say Victoria in particular, who’ve had some pretty heavy land tax changes and things like that. Is that a factor in people’s thinking that you see come across? I’ve got to jump in on the tax one given Perks’s role and jump that in there.
Ben Parkinson (31:47.955)
Yeah, of course. I don’t think no one likes paying land tax. I think that’s a that’s a fact. I think it’s worked in our advantage with the recent changes in tax in Victoria. So that’s great. I mean, you know, Victorians and Western Australians get investing in South Australia more than anywhere else. Maybe that’s because we all speak the same football language. We don’t have to explain what the two red posts on the outside are. But most for me, most fun.
Kim Bigg (31:52.214)
Yeah.
Kim Bigg (32:11.062)
Yeah.
Ben Parkinson (32:13.715)
fundamental to investor demand in South Australia has been no stamp duty on commercial purchases. That’s been a key driver that you, for your transaction costs in Melbourne or Sydney might be, including your ad valorem costs might be 6%. In Adelaide, that equivalent is about 1%.
Kim Bigg (32:30.262)
Yeah, which is significant when it comes to things like funding and those things as well, isn’t it? Because normally you’re really funding that 6 % out of cashflow as opposed to debt funding or otherwise. Excellent. I’ll come on to my final question before we wrap things up a little bit. But just my final question, last year, I’m going to say about nine months ago, they released a greater Adelaide plan and sort of highlighted a few different things, a lot of which was
Ben Parkinson (32:41.395)
Definitely.
Kim Bigg (32:59.962)
sort of leapfrogging some of the greenbelt where the Virginia markets and those sort of places to sort of leave them alone to continue to be the food bowl for South Australia and Adelaide and really go out another leg again beyond Gawler and so on. Add to some of these, when you’re looking at investment opportunities within the Adelaide market, industrial, commercial, you name it, is it starting to make people think and spread?
further adrift with that greater ad -lade report in mind.
Ben Parkinson (33:33.747)
I think for me the importance of the Greater Adelaide Report and the importance of the next phase of design for Adelaide is that you need to have adequate employment land close to your population. So don’t neglect the employment land, don’t neglect the commercial land near your population because we all want to work, we want to spend more time at home, we want to spend more time with our family and we want to work close to where we live. So for me I think…
As long as there’s adequate infrastructure and there’s adequate employment land close to that residential land, then it makes complete sense.
Kim Bigg (34:11.862)
Absolutely. It’s certainly an intriguing report and people would be remiss, anyone who’s investing in the Adelaide property market would be remiss not to have a look and see where the trend and where the government’s intention and planning intentions are for the next 30 years. We talked a bit earlier about the changes that you’ve seen in 20 years from Adelaide from when you departed to go east and then from when you’ve come back again now. You can only imagine what the Adelaide is going to look like.
30 years from now.
Interesting times. Well, look, I’ll, I’ll wrap things up there. Thank you very much for your time today and agreeing to come on board. We did have a few technical difficulties earlier on, but we’ve, we’ve navigated our way through that and I appreciate your support and your, your generosity of your time. So, yeah, thank you again. And thanks for passing on some of the insights into the Adelaide property market. I’m sure our listeners would love, will love listening to the podcasts and finding out a bit more.
Ben Parkinson (34:46.547)
and dive.
Ben Parkinson (35:13.907)
My pleasure.
Kim Bigg (35:15.222)
Excellent. Thanks, Ben.
Ben Parkinson (35:16.659)
Thanks very much.
