Looking at the clean lines of the Adelaide CBD plan, which hasn’t changed much since it was designed in 1837, the city is mostly a neat rectangle. It is bordered by extensive parklands and has five major parks scattered within. Running through the centre from North to South is King William Street, which divides the city.

Historically, the main business district for the city was east of King William Street, largely along Grenfell, Pirie and Flinders Streets. The majority of the office supply in the 1970s and 1980s was delivered to the eastern side of the CBD, which also housed The University of Adelaide, the Royal Adelaide Hospital and the Rundle Mall retail strip. This trend continued through to the early 2000s until a wave of new buildings emerged on the western side of King William Street.

JLL tracked new supply in the Adelaide CBD in the last 30 years. In the 20 years from 1990 to 2009, over 60% of all new prime office supply was on the eastern side of King William Street. However, over the last decade, this trend has been reversed. Over 55% of new prime supply developed on the western side of the city (Figure 1).

Figure 1: Adelaide CBD – New Prime Grade Office Supply by Location, 1990-2019 and Forecast

New office developments over the last decade, predominantly along Franklin Street, have resulted in a shift of the economic heart of Adelaide. This gradual pull towards the west has been accelerated by a number of factors.

Firstly, the introduction of small bar licenses in 2013 was the catalyst for the rejuvenation of Adelaide’s most successful laneways, Peel and Leigh Streets. These once underutilised laneways, located on the western side of the city, are now the epicentre of an established hospitality laneway network that runs from North Terrace to the Adelaide Central Market, improving the social amenity for people working in the area.

Secondly, the incremental expansion of the University of SA City West campus increased the number of students in the area, which, in turn, spurred student accommodation development. With an increasing number of CBD residents now living in the west, night-time amenity along Hindley Street and in the broader western precinct has improved.

Lastly, the most critical factor in the growth of the Western CBD was the relocation of the Royal Adelaide Hospital from the eastern edge to the western edge of North Terrace in 2017. This relocation moved approximately 6,000 workers, 400,000 annual outpatients, and the visitors to approximately 85,000 annual inpatients, to the west. This monumental rebalance of daily foot traffic has created an unprecedented tangible vibrancy in this side of the city.

As at 4Q19, 60% of prime office developments in our future supply pipeline is located on the western side of King William Street. Developers, who recognised this momentum shift early, have now acquired development sites along Franklin, Currie and Waymouth Streets. As a result, the proportion of modern office stock located on the western side of King William Street will increase further as we move into the 2020s.

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