Charter Hall wins approval for next Chifley tower

City towers on the agenda as corporate Australia seeks a return.

Charter Hall is putting its faith in big city projects, with the developer winning approval for a new tower in the Chifley Square precinct in the heart of Sydney’s central business district.

The company is working with Singaporean sovereign fund GIC on a new skyscraper which will be anchored by investment bank UBS, with the move showing its ability to pull off big city projects.

In Melbourne, the company is developing a new headquarters building for Amazon, also with the backing of GIC, and has also just taken a half stake in that city’s Southern Cross Towers for just over $1bn.

Charter Hall is betting large scale ultra-modern offices will perform best in the wake of the pandemic as corporate Australia seeks ways of getting staff back into offices.

Rival listed groups including Dexus, Mirvac and Lendlease are also pursuing office projects and private developer Milligan is also developing.

Charter Hall’s planning proposal for the second tower at 2 Chifley Square in Sydney’s CBD has received endorsement from the City of Sydney.

The new 37-storey Chifley South tower will be built adjacent to the existing Chifley North tower, with more than 64,000sq m of gross floor area of premium-grade office and retail space. The project includes a reinvigorated podium and public domain at Chifley Square.

Charter Hall has won approval for the new Chifley tower development in Sydney.

The approval followed consultation and a gateway determination, granted by the NSW government in February. Now the developer and authorities will start a design excellence competition.

Although construction of Chifley South tower is several years away, the tower is already attracting high-quality tenants, including precommitment leases with the global investment bank. The property group will also move to the tower.

Charter Hall Office chief executive Carmel Hourigan said the project approval reinforced Sydney’s reputation as an “innovative and leading global city”.

“This decision reflects confidence in Charter Hall’s vision for the Chifley Precinct to encourage the return to workplaces where collaboration, mutual success and our wellbeing thrives. The flight-to-quality, as demonstrated in our precommitment leases, is how high-performance businesses are attracting and maintaining the highest-calibre professionals and ultimately, driving success,” she said.

The Chifley development aims to hit sustainability benchmarks, electrifying the entire Chifley precinct, enabling it to operate entirely from renewable energy. It is also targeting Climate Active Carbon Neutral certification for the new Chifley South building, in line with the City of Sydney’s net zero strategy.

The Charter Hall Prime Office Fund bought the 2 Chifley Square precinct freehold for $98.5m 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.