Chifley’s new tower expansion leads fresh wave of office development

Chifley is one of the top addresses in corporate Australia and an overhaul has been on the cards since 2019 when two Charter Hall funds joined with Singapore’s sovereign wealth fund GIC in owning the leasehold of the $1.8bn complex. Picture: Hollie Adams

Sydney’s famed Chifley Tower will soon have an architecturally stunning twin skyscraper rising beside it as big developers plan a wave of new office buildings as the economy reopens.

Big landlords are proposing next generation office buildings that take into account the changes wrought by the coronavirus crisis but they remain committed to rejuvenating central business districts.

Chifley is one of the top addresses in corporate Australia and an overhaul has been on the cards since 2019 when two Charter Hall funds joined with Singapore’s sovereign wealth fund GIC in owning the leasehold of the $1.8bn complex.

A year earlier one of Charter Hall‘s vehicles had bought the freehold of the precinct, which houses blue-chip tenants including investment banks UBS, Investec, Sumitomo Mitsui Banking Corp and Morgan Stanley.

Now Charter Hall has unveiled plans that will see a new curvilinear office tower built on the podium beside the existing building and soar up to 36 storeys in height.

The scheme could see close to 65,000 sqm of floor space in a new commercial podium and tower added to the site, with the new tower commanding views across the harbour and central Sydney.

The existing podium would also be reconfigured to include new, finer retail and dining to improve the area’s activation and better use the existing public domain along Hunter Street and Chifley Square.

The entire site will benefit from being near the future Metro Station, known as Martin Place north, with Chifley Square to be transformed.

The new tower will be to the south of the existing tower and would have a significant frontage along Hunter Street, and become part of eastern edge of the city skyline.

The skyscraper will sport dramatic views over Hyde Park and once complete turn the property into a multi-billion dollar commercial precinct.

An artist’s impression of Charter Hall’s vision for the redevelopment of 2 Chifley Square.

The move signals Charter Hall‘s confidence in the return to office and top companies demanding modern space and it already has big projects underway in Melbourne and Adelaide, as well as plans in Brisbane.

Charter Hall chief executive David Harrison declined to comment on the project specifics but has argued that companies will need top quality office space to accommodate staff and boost productivity.

The Charter Hall development is among the biggest plays in the current cycle but it is certainly not alone. Rivals Mirvac, Lendlease, and Dexus all have large office sites in the Sydney CBD and Dexus is developing in the technology precinct around Central station, including backing the $1.4bn Atlassian timber tower.

AMP Capital is close to completing the massive $3bn Quay Quarter Tower and the Lendlease-developed Sydney Place is well advanced.

Just this week refined plans for a new tower at Cockle Bay Wharf being developed by GPT Group and AMP Capital also went on exhibition.

The pair’s planned 75,000 sqm redevelopment in the heart of Darling Harbour, includes a 43-storey commercial tower, with GPT head of office and logistics Matthew Faddy saying the project would drive the revitalisation of the harbourside precinct as it sports new retail, commercial, entertainment and open space.

The race for new buildings comes as the future of offices takes shape with big companies changing how they work but emphasising the centrality of city office buildings.

Stockland chief executive Tarun Gupta is also a believer in city retail assets but the company will first develop in Macquarie Park and North Sydney before an overhaul of the city’s Piccadilly Complex.

The Castlereagh St tower will become a two tower building sporting Hyde Park views and the latest in office technologies, with the company planning a $1.5bn development spend.

“Office will remain a very important asset class. Clearly, there will be changes towards hybrid and flexible working and highly aerated assets will emerge over the next 10 years,” Mr Gupta said.

Stockland is looking to create next generation assets even as some buildings fall by the wayside. “We remain a long term believer in office, but there are certainly buildings we think will be challenged over the next couple of years,” he said.

“We really have a blank sheet of paper in office and we are looking to create new generation workplaces.”

Others are already “speccing” buildings by starting works ahead of winning tenants with CPB Contractors starting on Parkline Place, with the move reflecting the confidence of the trio of developers behind the project above the new Pitt Street Metro Station.

Oxford Properties and Investa this month unveiled a joint venture partnership with Mitsubishi Estate Co for the premium office building on the corner of Park and Pitt streets.

The 39-storey tower and retail precinct will sport 47,800 sqm of office space and be finished by 2024.

The Japanese company will acquire a 25 per cent interest in Parkline Place with Oxford retaining a 75 per cent interest.

Investa CIO Penny Ransom said the project partners would support the delivery of one of Sydney’s top new premium grade office buildings, adding that Parkline Place would provide “a leading new generation workplace for our future tenants”.