Marprop Real Estate Investors has acquired a refurbished office building in the South Australian capital of Adelaide from a fund managed by BlackRock and Fortius Fund Management for around A$70m (€47m).

Evan Gallagher, executive director of Marprop, told IPE Real Assets that the asset was purchased on behalf of an institutional investor.

“We have a mandate from the institutional investor to focus on core-plus Australian office assets,” he said. “We are happy to have such support and belief in the Australian market, which in my personal opinion continues present as a ‘safe house’ for those seeking global exposure.”

BlackRock and Fortius recently completed an overhaul of the 14-storey building at Gawler Place, in Adelaide’s central business district.

A major tenant of the building is a South Australian government department.

The acquisition marks Marprop’s entry into the Adelaide market. “We have spent considerable time watching and researching Adelaide, exploring the changing ownership and tenancy patterns,” said Gallagher.

“The market has definitely seen more institutional interest and ownership over the years. Adelaide has shown one of the leading real occupancy rates in Australia, with the CBD showing evidence of around 75%.”

Gallagher added that the tenancy mix continued to evolve and, while the headline vacancy remained in double digits, occupancy was higher for well-positioned quality assets.

He said Gawler Place was “perfectly suited” for the growing level of interest from SME tenants, adding that around 70% of tenant enquiries in Adelaide were for less than 1,000sqm of centrally-located office space.

Marprop has been active in recent months. Last October it joined an Australian company, Futuro Capital, together with KKR, to acquire the five-star Sofitel Sydney Wentworth for A$315m.