Property manager Charter Hall has been given the green light for its second tower at its $2-billion Chifley Square development in Sydney’s CBD.
The 37-storey tower will be built next to the existing Chifley North tower, offering more than 64,000sq m gross floor area of premium-grade office and retail space.
The group said the aim of the second Chifley tower was to future-proof the property and position it as a precinct of influence and excellence that serves “top-tier customers” and the broader community.
The development includes a reinvigorated podium amenity and a reactivated public domain at Chifley Square 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.
The group’s unlisted Prime Office Fund originally purchased the 2 Chifley Square precinct freehold for $98.5 million in 2018 and is also one of the leasehold owners.
In February the NSW government granted gateway determination for the project to proceed to the next stage. It has now been signed off by the City of Sydney and will proceed to gazettal and a design excellence competition after the original scheme was put together by Architectus.
Charter Hall’s record of delivering placemaking projects, including 333 George Street in Sydney and 555 Collins Street in Melbourne, will now inform its work on the 2 Chifley Square project.
Charter Hall head of office development Mark Stante said although construction of Chifley South tower was several years away, the tower was already attracting high-quality tenants, including a pre-commitment lease with global investment bank UBS.
“The project will contribute to Sydney’s target for over 100,000 additional jobs and will be an important piece of economic stimulus for the post Covid-19 recovery,” he said.
Charter Hall will also relocate its headquarters to Chifley South, bringing the building’s pre-commitment level to about 6000sq m so far.
Stante said the development, once realised, would strive to provide best-in-class amenity and sustainability benchmarks, electrifying the entire Chifley precinct, enabling it to operate entirely from renewable energy.
Other best-in-class features will include smart building technology, modern health and hygiene solutions, and wellbeing certification, which prioritises human health and wellness.
It’s also targeting climate active carbon neutral certification, in line with the City of Sydney’s net-zero strategy.
The redevelopment is expected to create an estimated 1500 jobs in the construction phase before supporting thousands of professionals in the completed Chifley precinct.
The existing tower has close to 69,000sq m of lettable area, with more than 5000sq m of retail space and 42 levels of office.
This month Charter Hall quietly purchased the freehold to the 1.3ha Collins Place complex, in Melbourne’s exclusive eastern core, for $65 million. That asset will also be held by the group’s Prime Office Fund, which will now share in the spoils of any significant development upside.
The fund manager’s long-standing strategy has been to unlock under-utilised floorspace in prime locations that have the potential to add value to the freehold asset over time.
Late last year, CPOF acquired the freehold interest in 383-395 Kent Street in Sydney’s CBD—a site of about 3600sq m benefitting from two street frontages—for $385 million.
