Competition hots up for Sydney’s Chifley Tower

Chifley Tower in the heart of Sydney’s financial district. Picture: Hollie Adams.

A clutch of deep-pocketed local and international investors have emerged in the running for a half-stake in the $1.8 billion Chifley Tower and Plaza in the heart of Sydney’s financial district, with Lendlease and possibly ISPT in the Australian brigade.

The offer of interest in the ­trophy skyscraper by Singaporean sovereign wealth fund GIC Real Estate has been tipped to set benchmarks for Australian office towers, with reports private Asian groups chasing major global ­assets would set the running.

Investors from Hong Kong swooped on London’s famous Cheesegrater building and the city’s Walkie Talkie skyscraper last year and have also been tipped to chase a stake in the Sydney tower.

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It is believed Chifley has drawn initial interest from those buyers — Hong Kong’s CC Land and Lee Kum Kee Group — but it is not known if they have progressed.

The showing of the local groups has demonstrated the interest of superannuation capital in the offering. Superannuation fund-backed manager ISPT has a healthy appetite for major Sydney office towers. In June, it took a half-stake in Sydney landmark Westpac Place in a play valuing the tower at more than $1.7 billion. That move was made possible by Mirvac assigning its rights to the half-interest in the tower at 275 Kent St to ISPT and followed a major office tower acquisition in Melbourne by the group.

Lendlease’s interest is believed to be driven by its funds management arm, acting on behalf of an Asian institutional client.

Sources pointed to its close ties to the Hong Kong Monetary Authority, which earlier this year teamed with Lendlease’s Australian Prime Property Fund Commercial to buy the timber ­office building at Sydney’s Barangaroo South precinct for about $250 million.

But sources say it also has a deep roster of international partners, including Dutch fund manager APG Asset Management and the Canada Pension Plan Investment Board. Neither of the local groups would be drawn on their interest. Agents Cushman & Wakefield and JLL did not return calls.

The private owner of the freehold of Chifley Tower is separately trying to sell its interest in the property for more than $100 million in a process run by Colliers International.

Occupying almost an entire city block, Chifley Tower and Plaza comprises 40 levels of premium office space, a three-level integrated retail component and parking for 363 cars.

The complex spans more than 69,000sqm and is one of Sydney’s most prominent towers.

The site was bought for $306 million in 1988 by the Bond Corporation and was eventually transferred to Japanese construction company Kumagai Gumi, the builders of the tower.

GIC bought the property in 2005 for $710 million from indebted Japanese owner Matsushita Investment & Development Corporation.

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