Quintessential secures third tenant for upgraded ex-Telstra building on Pirie St

Artist’s impression of the new entry to 30 Pirie St. Picture: Supplied by Quintessential

Quintessential has secured its third tenant for the former Telstra building in Adelaide, where a $30m revamp is under way following the departure of the telco earlier this year.

Engineering firm KBR has signed a seven-year lease for 2000sq m across levels 20 and 21 of the building, joining Boeing and accounting group TSA, who are already occupying close to 5000sq m in the building.

Quintessential’s $73m acquisition of the 26-storey tower on Pirie St last December is part of the fund manager’s counter-cyclical play aimed at acquiring, refurbishing and leasing up well-located and structurally robust buildings.

The overhaul of the Pirie St tower will include a revamp of the ground floor foyer, with new end-of-trip facilities, bookable third spaces, a coffee bar and open workspace.

The upgrades are expected to elevate the building to a minimum 5-star NABERS base building energy rating, and are expected to be completed in July.

Artist’s impression of the new internal lobby as part of the $30m upgrade of the former Telstra building. Picture: Supplied by Quintessential

Quintessential’s head of assets Noah Warren said Telstra’s relocation to Charter Hall’s new development at 60 King William St earlier this year offered an opportunity to transform its former long-standing home.

“30 Pirie St was built for Telstra back in the 1980s – it’s a building that hasn’t really been in the market because it’s been leased forever and a day to Telstra prior to Telstra now moving to 60 King William St,” he said.

“So we’ve got this amazing untapped opportunity to bring 30 Pirie St back into the marketplace – back as a reimagined, regenerated opportunity that is going to speak to the flight to experience – what occupiers need to attract the best staff.

“Our view, and I think it’s starting to show with the likes of KBR moving from Greenhill Rd into the CBD, is that buildings that are well-located, surrounded by amenity, have amenity embedded into it through regeneration and upgrade works, is going to win the race to the tenant.”

Artist’s impression of the $30m upgrade of the former Telstra building. Picture: Supplied by Quintessential

Quintessential is looking to bring in an international co-working group to occupy part of the remaining vacancy within the 24,000sq m building.

The plan is for tenants to have access to the co-working space, allowing them to expand without having to commit to a long-term lease.

“For us that is the office of the future,” Mr Warren said.

“That flexibility, bringing in the likes of the third space, bringing in the likes of co-working that gives occupier groups the ability to flex rather than be pigeon holed into a space itself.

“Gone are the days of buildings that are quite vanilla, that you walk in and they don’t have the amenities, whether it’s the F&B offering, whether it’s third spaces, whether it’s the wellness, end-of-trip, and the agility and flexibility that buildings can provide. They won’t win the race to the tenant.”

Quintessential remains bullish on the Adelaide office market despite the city’s vacancy rate reaching 17 per cent – its highest level since the late 1990s.

Buoyed by the city’s office occupancy rate, which remains the highest in the country outside of Perth, and the recent move of several city fringe and suburban office occupiers relocating their operations into the CBD, Quintessential is also working on a major upgrade of another office tower at 100 King William St following its $71.5m acquisition in 2021.

Upgrades to the 17,000sq m building, previously home to the Commonwealth Bank, include an overhaul of the ground floor lobby. It will be completed in mid-2024.

“We’re incredibly confident in office space but it’s around the quality of asset,” Mr Warren said.

“It’s around the quality of location and for both 100 King William St and 30 Pirie St we’ve seen buildings that are physically very structurally strong buildings.”

Meanwhile, Mr Warren said Quintessential was currently in talks with several potential occupiers for its Entrepreneur and Innovation Centre project at the Lot Fourteen innovation precinct, with construction expected to commence by the middle of 2024.

KBR will relocate to the Pirie St tower from its current Parkside home in April.

CBRE’s Michael Pfitzner and Andrew Bahr, and JLL’s Tom Budarick and James Parkyn are leasing the remaining space in the building.