The State Commission Assessment Panel (SCAP) on Wednesday gave planning consent to Victorian developer Flagship Property Holdings to build a mixed-use development featuring 192 apartments – including state government-backed affordable housing – behind the vacant 146-year-old Royal Hotel on the corner of North and Dequetteville Terrace.

Flagship’s plan, in conjunction with design consultants City Collective, is to build a 15-storey, 47-metre tall “City Building” approximately 11 metres behind the Royal Hotel.

The state heritage listed former pub in the eastern CBD fringe was built in 1877 and added to the heritage register in 1986. It has been vacant since 2019.

An aerial view of the area Flagship Group has identified for development. Image: City Collective

A view of the development looking eastward on North Terrace. Image: City Collective

The pub will be retained under the development and restored as part of an adaptive reuse plan.

A slightly smaller 14-storey, 44.4-metre tall “Hills Building” is proposed further east on North Terrace.

The twin apartment towers will span a 92.6 metre frontage along North Terrace and include retail food and beverage tenancies on the ground floor.

The western City Building will feature 90 apartments, including 40 classed as affordable housing, while the eastern Hills Building will offer 102 apartments.

A view of the development looking west on North Terrace towards the Royal Hotel, including a porte-cochere providing temporary access to the site. Image: City Collective

Twenty-two of the affordable housing apartments will be listed via the state government’s Homeseeker SA program, while 12 apartments will be purchased by community housing provider Junction Australia.

Disability services and support organisation Summer Housing has also agreed to purchase six specialist disability accommodation/high physical support apartments which will be built in the western building.

The project has support from the state government’s urban renewal agency, Renewal SA, which has agreed to underwrite the sale of 35 affordable housing properties to ensure the project reaches the minimum 15 per cent affordable housing threshold.

In total, 21 per cent of the apartment dwellings will be classed as affordable housing. The project has support from the South Australian Housing Authority.

But approval for the twin towers plan has come more than three months after the SCAP was initially due to assess the project on February 8.

A Planning Commission spokesperson said the application was put on hold pending resolution of “technical matters relating to access to the building”.

On Wednesday, the SCAP found the project was “not seriously at variance with the provisions of the Planning and Design Code” and granted planning consent subject to three reserved matters and 13 conditions.

An aerial view of the podium level of the twin tower development. Image: City Collective

An aerial view of the proposed development released in 2021. The colour of the podium has since changed to incorporate “materials and a design that is more responsive to the site, the Royal Hotel, and to the character of Kent Town”, according to planning documents. Image: City Collective

The Commissioner of Highways imposed eight conditions as the intersection of North and Dequetteville Terrace was identified for future road widening under the Metropolitan Adelaide Road Widening Plan.

A combined 161 car parking spaces are planned to be located from the ground floor to the second level of the twin towers, while a communal open space for residents is planned for the third level.

The 4115 square-metres of space earmarked for development is currently a car park, although the project will require demolition of the more recent rear additions to the Royal Hotel.

The Royal Hotel is located at a prominent intersection on the CBD fringe. Photo: Thomas Kelsall/InDaily

Heritage SA was supportive of the developer’s plan for adaptive reuse of the old pub building and said the rear additions “do not contribute to the heritage values of the State Heritage Place”.

Government planning officer Mollie O’Connor, who recommended the SCAP approve the project, wrote that demolition of the Royal Hotel’s rear additions will reveal the original eastern façade of the Royal Hotel and reinstate “the original building alignment”.

She said the new development will be aligned with the Kent Town grid rather than the angled alignment of the Royal Hotel, providing “visual relief and separation from the state heritage place”.

The twin apartment towers exceed the 36-metre, 10-storey height limit specified in the local zone, however, given the development includes a minimum 15 per cent affordable housing and is a “significant development site”, it is permitted to exceed the limits by 30 per cent.

This “bonus” height incentive in the state’s planning code has previously been criticised by Norwood Payneham and St Peters Council, which claims the provision leads to “ad hoc” developments that “[exceed] Code parameters in a non-strategic and non-transparent way”.

However, the council administration did not raise any height objections when the development was referred to it for comment.