The Olympic Dam expansion project would increase office demand in the Adelaide CBD by 35 percent over the first 12 years of the project, according to Jones Lang LaSalle.
The project is awaiting final board approval from BHP Billiton, and a decision is anticipated before end-2012.
JLL’s whitepaper, Olympic Dam Expansion impact on Adelaide CBD office demand, says the project will be a key driver for the Adelaide CBD over the next 15 years. It is Australia’s second-largest resources development to date.
The whitepaper models the relationship between office occupancy and GSP. Adjusting for the impact on GSP of the Olympic Dam project, based on the BHP draft environmental impact statement, implies an additional 75,000 sqm of occupied office space attributable to the project - a 35 percent increase in base office demand over the next 12 years attributable to the expansion.
“This analysis suggests the greatest impact on the office market would occur in Year 12, with relatively limited economic impact over the construction phase by comparison,” the whitepaper says.
“We consider there is most likely to be a spike in office demand much earlier, with demand coming from companies for short-term project space as well as from BHP and its major partners.”
“Assuming BHP board approval is received for the Olympic Dam Expansion, it is expected that enquiry and lease commitments will increase substantially, and provide the impetus for a period of strong growth in office space absorption in the Adelaide CBD”.