Planning approval has been granted for Adelaide's first micro-hotel.

The 15-storey development, located on 274 North Terrace on the corner of Frome Street, will consist of 253 compact rooms ranging in size from 13sqm to 28sqm. The project will be developed by Hines Property.

Designed by global architecture firm Woods Bagot, the AU$55 million hotel will offer small yet high-quality rooms designed for short-stay visitors and young tourists, and will include a gym, a ground-floor lobby, lounge, and bar.

"The micro-hotel trend is booming in cities across the globe, so we're bringing the concept to Adelaide," said James Hines, managing director of Hines Property. "Micro-hotels are perfect for people who want a quality space to stay and are happy to trade excess room space for a lower room cost.

"The 274 North Terrace hotel will offer compact yet impeccably designed rooms located between the East End and North Terrace precincts, opposite Lot Fourteen and the new tram extension, so really an ideal site to build the city's first micro-hotel," he added. "The project is also great news for the Adelaide economy, with up to 200 jobs to be created during the construction period."

Construction is due to commence next year ahead of opening in 2021. A worldwide search is already underway to select an operator for the hotel.

Established in 2003, Hines Property is a privately-owned property development and investment group focusing on residential, office, hotel, and mixed-use development projects.

Hines Property is the largest owner of hotel accommodation in the Adelaide CBD, with the 274 North Terrace development set to increase its hotel development portfolio to more than 1000 rooms including the five-star Pullman Adelaide Hotel and the premium economy Ibis Adelaide Hotel.