Property investment and funds manager Charter Hall says it has pre-commitments for more than 30 per cent of its 41-storey Chifley South office tower in the heart of Sydney.
More than 16,000sq m of the tower’s premium-grade net lettable 50,000sq m is pre-committed with much of that being taken up by international investment bank UBS, according to Charter Hall office chief executive Carmel Hourigan.
Charter Hall will also make the project—due to start construction early next year—it’s Sydney headquarters.
“We are confident that Chifley South will deliver on its leasing potential, with limited competition from new buildings planned in the Sydney CBD between 2024 and 2027,” Hourigan said.
“We continue to see a growing appetite for new, premium office buildings in line with the strong bifurcation of the office market, and Chifley South will be well-positioned to absorb that demand.”
Hourigan’s prepared comments came as Charter Hall lodged a formal development application with Sydney City Council for the project, which will deliver a new seven-storey podium and tower on the southern part of the 6438-square-metre site.
That podium will eventually integrate with the adjacent 44-storey Chifley North commercial tower, built in 1993. Between them, the two buildings will accommodate about 8000 operational jobs in Sydney’s financial district, according to documents filed with the council.
Planning for Chifley South began in September 2019, but it wasn’t until December last year that Bates Smart beat out five other architectural firms in a 10-week-long design competition for the 167m second tower.
With frontages along Chifley Square and Hunter, Phillip and Bent streets, the development will sit on one of Sydney’s most expensive blocks of land, bought by the Bond Corporation in 1988 for $306 million.
Charter Hall purchased a 50 per cent stake in 2 Chifley Square in 2019 for about $900 million from Singaporean sovereign wealth fund GIC, and wholly manages the asset.
Under the lodged plans, a publicly accessible through-site will connect Bent and Hunter streets. Ethos Urban told the council 167 existing car parking spaces would be removed from the site, with just 194 spaces retained for tenants.
An additional 328 bicycle spaces will be added to the existing 213. There will be a total of 89 showers and 1023 lockers as part of end-of-trip facilities.
“This development is set to re-energise the iconic Chifley precinct and contribute to the vibrancy of the Sydney CBD,” Charter Hall managing director and group chief executive David Harrison said.
“As reflected in the DA, Chifley South will deliver the highest standard for environmental and social sustainability, security, smart technology, and wellbeing.”
The development falls within the Central Sydney Planning Strategy (CSPS), first released in 2016 and which sets out a 20-year land-use vision for the area.
“The proposal will reinforce Sydney’s role as Australia’s global city and economic engine room by delivering a new world class, environmentally sustainable office tower, providing in-demand premium grade commercial floor space and supporting significant employment growth,” Ethos Urban wrote.
In fact, an estimated 1500 jobs will be created during the construction phase.
Under a Voluntary Planning Agreement struck with Sydney City Council in August last year,
Charter Hall will also contribute $14.7 million to community infrastructure in central Sydney, as well as $900,000 for the upgrade of the public domain around Chifley Square.
Public art valued at $2.8 million is included in the agreement.
When finished, the precinct will have an end value of about $4 billion, according to Charter Hall.
