Funds pay $87m for city tower at 45 Pirie St, Adelaide THE $87 million sale of a CBD office tower could signal the return of Australian institutional investors to the Adelaide property market, industry experts say. Sydney-based fund manager CorVal has made its first foray into the Adelaide market, paying $87 million for the 45 Pirie St building on behalf of three institutional investors. The Future Fund, Funds SA and Victorian Funds Management Corporation, groups for which CorVal was awarded an investment mandate late last year, will take on equal ownership stakes in the building. CorVal director Ian O'Toole said the Adelaide office market offered a stable investment environment. "Our plans are to manage the asset well, adopting a boutique hands-on approach to take advantage of the good platform that Colonial have laid," Mr O'Toole said. We will always be on the lookout so more (properties) in Adelaide is not out of the question. Colonial's listed Commonwealth Property Office Fund (CPA) paid $55.2 million for the 18-level Pirie St building in 2002 and since 2008 has spent more than $11 million on upgrades. CPA fund manager Charles Moore said the sale reflected a re-weighting of the fund's portfolio. "It is a non-core holding in a market where we are overweight," he said. On the back of strong investor demand for office property, the timing was favourable for the divestment. The sale proceeds will initially be used to pay down debt, providing CPA with additional debt capacity which will allow future reinvestment. Australian institutional investors have been divesting from the Adelaide office market since the onset of the global financial crisis. But the latest transaction - the highest value property sale in Adelaide since Real I.S's $100 million acquisition of 400 King William St in October - will boost confidence in the Adelaide market, according to CBRE state managing director Phil Rundle. "I think its good news that unlike a lot of major transactions in recent times, it's not a local purchaser or local syndicate but an interstate buyer," he said. We've noticed a lot more interest in recent months from interstate - syndicates and funds looking to Adelaide. CPA's $2.3 billion fund is left with two office properties in Adelaide - City Central Tower 1 at Waymouth St and EDS Centre at 108 North Tce. Colliers International and Knight Frank, the property firms that managed the off-market sale of 45 Pirie St, declined to comment.