Walker Corporation is pushing ahead with plans for a second tower at Festival Plaza, which could become Adelaide's first true skyscraper. The developer is now aiming to secure the Australian Taxation Office (ATO) as a key anchor tenant — a move that could be pivotal in bringing the project to life.
The ATO is reportedly assessing its options for 19,000sqm of office space to accommodate around 2000 staff. This includes either extending its current lease with Charter Hall at Franklin Street's City Central precinct, which it has occupied since 2012, or relocating to a new site.
Timing and Tenant Commitments in Play
With the ATO seeking a 10- to 15-year lease from August 2027, Walker Corporation is targeting a mid-2027 completion for the 160-metre tower — pending planning approval and tenancy agreements. However, securing an anchor tenant remains critical to the timeline.
Other large corporate tenants in the market, such as EY and PwC, have later lease expiries, which could give Walker Corporation more flexibility for delivery. Industry insiders suggest a government pre-commitment could be essential for the project to proceed, given Adelaide's limited pool of large private tenants.
State Government Position
South Australian Premier Peter Malinauskas has expressed support for a second tower at Festival Plaza but confirmed the state has made no formal commitment to lease space.
"We'll keep our options open because we're always in the market for government office space," Mr Malinauskas said. "If Walker Corporation wants a state government tenancy, they'll need to offer a value-for-money proposition."
While no promises have been made, the Premier acknowledged the ageing State Administration Centre — home to the offices of the Premier, Treasurer, and key departments — could make a relocation logical.
Adelaide's Largest Commercial Tower in the Making
The proposed second tower would offer close to 50,000sqm across 38 levels, with 30 floors of office space capable of hosting 5000 office workers, plus retail tenancies employing around 100 staff. Lower levels would feature restaurants, cafes, and bars, creating a vibrant mixed-use environment.
The first Festival Plaza tower, completed last year, is home to Flinders University, Deloitte, Westpac, and several smaller tenants.
Walker Corporation Managing Director David Gallant said the developer is in advanced discussions with "blue-chip" corporate tenants, including some seeking 10,000 to 20,000sqm of space. He remains confident the building will be fully leased before completion.
The Century 21 Commercial Real Estate Adelaide team notes that large-scale CBD projects like this can significantly impact surrounding property markets — boosting investor confidence, driving up demand for premium office space, and creating new leasing opportunities in nearby precincts.
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For expert advice and strategic market insights, visit c21commercial.com.au today Disclaimer: This article contains information and market insights first published by realcommercial.com.au The content has been independently rewritten and adapted by Century 21 Commercial Real Estate Adelaide to provide relevant and updated context for our audience