According to renowned space historian Kerrie Dougherty, Adelaide was the location where Australia’s first ever rocketeer, Frederick Hustler, lived and developed the nation’s pioneer rocket in the 1870s. South Australia (SA) also lays claim to the location of Australia’s first ever rocket range, in Woomera in the state’s north, which was the site for long-range missile testing by the British in the 1940s. So when the Australian Federal Government announced in December 2018 that Adelaide was to be the location of the newly established Australian Space Agency (ASA), it could be considered a natural continuation of a long-established association between location and industry.

Providing the framework for the success of the ASA is SA’s reputation as the defence technology capital of Australia. The majority of global defence technology firms already present in SA have significant linkages to the space industry. Using the 2018 PwC Aerospace and Defence Review list of the top 100 global companies (by revenue) as a proxy for the global aerospace industry, it shows that, as an aerospace and defence cluster, Adelaide punches well above its weight. Of the top 15 largest companies listed in the report, nine have an existing presence in Adelaide. The American aerospace “Big Three” of Boeing, Lockheed Martin and Northrop Grumman have all expanded footprints and research activities in Adelaide over the last two years. Additionally, Europe’s largest aerospace firm, Airbus, was the first company to sign a statement of intent with ASA to commit to the capability and competitiveness of Australia’s space sector. But will all of this sector growth translate into a tangible positive for the commercial property market in the Adelaide CBD?

Since 2016, 7,700 sqm of aerospace occupier gross take-up (measured at a >1,000 sqm occupier move threshold) has been recorded in the CBD. Non-CBD office precincts such as the Adelaide Fringe (where Raytheon expanded by 1,100 sqm), and designated technology precincts like Mawson Lakes (where Lockheed Martin expanded to 5,400 sqm and SAAB developed a new research and development R&D facility) also still attract occupiers. However, with the growing concentration of aerospace technology R&D and knowledge centred on Lot Fourteen (the redeveloped former Royal Adelaide Hospital site in the north-east corner of the CBD where the ASA is based), proximity to government decision-makers and access to highly-skilled human capital courtesy of two city-based universities, the Adelaide CBD will be the most attractive location for the South Australian aerospace industry in the future.

Artist impression of the completed Lot Fourteen technology precinct
Source: Renewal SA

The Australian Federal Government has committed AUD 41million to ASA through 2022 with the goal of tripling Australia’s space economy to AUD 12.0 billion and doubling the sector workforce to 20,000 by 2030. The potential for SA to capture the majority of this growth is very strong, underpinned by the interconnection with the long-standing defence technology cluster in the state. When revisiting the PwC global top 100 aerospace firm list, only an additional 12 global aerospace firms ranked between 16 and 100 currently have commercial space in SA. As the fledgling agency grows and the related value chains get bigger, the SA aerospace cluster will become increasingly internationalised. It won’t be long until more firms from the global Top 100 list join the party.

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