The state government today said it had given developer Walker Corporation the green light for a 38-storey tower behind Parliament House, next to the company’s recently completed 29-storey Festival Tower.

It said the “sleek, modern” tower would have 36 floors of commercial office space, and “two floors of high-quality food and beverage space with direct access from Festival Plaza”.

Commercial office space is a major component of the new build – which at 38 storeys is 35 floors taller than the building originally approved for the site.

Cabinet approval for the plan meant Walker Corporation would now seek planning permission, with construction expected to begin next year.

As revealed by InDaily in 2022, Champion said Walker Corporation wanted to develop something larger than the planned three-storey retail building originally proposed for the land near the Festival Theatre.

At the time, Champion described the original three-storey retail building plans as a “lost opportunity” for the site, said it would block views of Parliament House and that “a very significant piece of architecture” might be better suited for the Plaza.

What form Walker Corporation’s proposal would take was unclear until today when the news was announced by the state government, despite InDaily asking for details on numerous occasions and being told such information was “commercial in confidence”.

Opposition planning spokeswoman Michelle Lensink today raised concerns with the new proposal, which still requires planning approvals and tenancy agreements.

Lensink said the former Liberal government “made a decision for a three-storey tower at the site which was, we thought, the best option”.

“There are a lot of vacancies in the city, so we need to bear in mind that this is public land – so it’s special – and we do need to be making the best possible case for that space,” she told ABC Radio Adelaide.

Speaking to InDaily, Lensink said she wanted to see transparency from the state government on the issue and called for the business case for the larger tower to be released.

“Particularly post-COVID, workers are not coming back into the city, many people can work remotely now… so I would love to know what sort of companies the government is talking about that will refuse to come to Adelaide because they don’t have a brand new office tower,” she said.

“I just think the business case would be really interesting to see.”

According to Property Council data released in February, Adelaide has the highest rate of office vacancy of any CBD in the country at 19.3 per cent, which is nearly five percentage points more than the second most vacant CBD, Perth.

The organisation attributed the high rate to the “flight to quality” trend, meaning more businesses in the CBD are moving out of older office buildings and into newly built stock.

The Office Market Report detailed total office stock in the Adelaide CBD was at 1,563,565 sqm, with 302,280 sqm of that vacant.

Asked today why Adelaide needed more new office space, Champion said “a lot of the empty office space is C and D grade office space” and that “modern corporations will not lease that space”.

“They’ll only lease what’s called next-gen office space, that is because they’ve got to meet their environmental and social metrics, but more importantly office workers won’t come to second-rate office space,” he said.

“This is all about a modern city having modern office space.

“Tower One is almost entirely occupied, the Charter Hall building in King William Street is entirely occupied, so we need more next-generation office space.”

He also said there were “no arrangements or pre-commitments from the state government” to Walker Corporation and that the office space would be “private commercial space”.

“We’d only entertain that if it was a good deal for the taxpayer obviously,” Champion said.

“We’re getting a payment from Walker for the development rights over this piece of land.

“It’s a good deal for the state.”

The state government’s press release also said the high-rise would bring in “thousands of visitors and workers and more than $1 billion in annual economic activity” for the state.

Lensink told InDaily that those claims were “fanciful”.

“Don’t get me wrong – we do need to have a good space there. I just don’t think it stacks up,” she said.

“I think there’s huge question marks about how this is going to operate into the future and who are going to be the tenants.

“Give us some names. There’d have to have been a business case because it went to Cabinet. I think the government needs to be much more transparent about what’s in there.”

Greens planning spokesperson Robert Simms labelled the new tower a “monstrosity”.

“There’s only one thing worse than a skyscraper towering over Parliament House and that’s two skyscrapers,” he said.

“This 38-storey monstrosity will totally overshadow the Plaza. It’s a sad indictment on the Labor Party that yet another office tower is the best they can come up with for this iconic site.”