Charter Hall gains green light for next stage of $2b Chifley tower
Office landlords are shrugging off the impacts of the global pandemic with new commercial properties earmarked for development amid forecasts of a recovery in the CBD office sector.
In the post-COVID-19 era, the shiny new skyscrapers will be reimagined to have much larger wellness offerings with increased space between desks and bigger, airier meeting rooms.
The latest tower to add to the skyline in coming years is by property funds manager and landlord Charter Hall, which has been given the green light to proceed to the next stage of its $2 billion project at 2 Chifley Square in Sydney’s northern CBD.
On Tuesday the NSW government granted “gateway determination”, for the project to proceed to the next stage.
It will include a new state-of-the-art tower, Chifley South, that will be built adjacent to the existing tower, Chifley North, and a revitalised public domain at Chifley Square.
Charter Hall Group’s chief executive David Harrison, said, Gateway Determination is a major step in realising the vision for 2 Chifley Square, and “directly aligns with the NSW government’s drive to reinvigorate the CBD and enhance Sydney’s reputation as an international city”.
“It’s a vote of confidence in the return to workplaces which is vital to our wellbeing, collaboration and mutual success,” Mr Harrison said.
The new Chifley South tower will provide over 50,000 square metres of premium office space, which has already achieved leasing pre-commitments from Charter Hall and global investment bank, UBS.
“While it will be several years before construction starts, Charter Hall will be working closely with its stakeholders to ensure 2 Chifley Square will be at the forefront of sustainability innovation and achieve the highest quality design and build,” Mr Harrison.
Charter Hall’s planning proposal directly aligns with the City of Sydney’s objectives to enhance the city, increase employment-generating floor space, and provide high-quality office space for premium tenants and international corporations.
The Charter Hall Prime Office Fund (CPOF) originally purchased the 2 Chifley Square freehold for $98.5 million in 2018 and is also one of the leasehold owners. CPOF also owns the leasehold interest in the adjoining Gresham Building at 167 Macquarie Street.
It comes as GPT’s chief executive Bob Johnston released the group’s full-year result saying there were concrete signs that the office market was improving. GPT has submitted its stage 2 development application for the 63,000 square metre Cockle Bay Park tower development in Sydney’s Darling Harbour.
GPT reported a net profit after tax of $1.42 billion, compared to a net loss of $213.2 million in 2020, with investment property valuation increases of $924.3 million.
Covering the year to December 31, 2020, the funds from operations (FFO) – being the more accurate measure for real estate investment trust – was $554.5 million, flat with the previous corresponding year’s $554.7 million. The FFO per security is 28.82¢ compared to 28.48¢.
Investors were paid a full-year distribution of 23.2¢ per security including a distribution of 9.9¢ per security for the six months to December 31, 2021, payable on February 28.
