Is something afoot at Chifley Tower?
It is perhaps the most prestigious building in the heart of Sydney’s finance district that has housed some of the most colourful characters among the country’s corporate elite.
But now some are wondering whether grand plans could be afoot for Chifley Tower or its surrounds after Charter Hall snapped up the ground beneath the structure in November.
The property group’s $98 million acquisition of the freehold site from a private owner was curious and has some in the Australian corporate world not only wondering about its future but reminiscing about its past.
Commercial Insights: Subscribe to receive the latest news and updates
“It was just a lovely building to be in,” says Michael Cook, a former senior asset manager at Bankers Trust Australia, who worked in the building during the 1990s and is now an executive at the office landlord Investa.
“Architect Kohn Pedersen Fox has done a lot of good buildings, but Chifley Tower was the best example.”
The landmark prides itself on the views of Sydney that stretch out across the harbour, the botanical gardens and the city’s east towards Kings Cross.
It was originally named Bond Tower and intended to house a luxurious penthouse apartment for businessman Alan Bond.
But after a number of high-profile dealings and bankrolling Australia’s successful challenge for the America’s Cup during the 1980s, Mr Bond wound up bankrupt in 1992 and was imprisoned for four years after being convicted for fraud.
Bond Tower was renamed Chifley Tower the following year, given its positioning on Chifley Square (named after the former Australian prime minister Ben Chifley) on the corner of Hunter and Phillip Streets.
Bond’s demise paved the way for the penthouse space to be changed to a glitzy French restaurant — Forty One — where diners were all the heavy hitters on the corporate scene.
Among those likely to be spotted there were people like rich-lister Kerr Neilson, who was busy making a name for himself in the floors below as an canny investor, and former Bankers Trust chief Rob Ferguson.
One of the high-flying lawyers based in the building carrying out the major deals for clients such as Rupert Murdoch was John Atanaskovic, then a partner for Blake Dawson Waldron (now Ashurst), and also no doubt a regular.
Carved on the memory of some are the plush nature of the restaurant’s male toilets, and the views.
In the early days, Allens — the legal team behind most of the top corporate deals of the 1990s — was the anchor tenant, and one of the days in Chiefly Tower many will not forget was a Christmas Eve in the early 1990s when the law firm almost collapsed into receivership.
This was after the affair involving British-based senior legal partner Adrian Powles whose clients’ funds could not be accounted for, and the move would have seen the Supreme Court shut down Allens’ right to practise law.
Beneath the law firm were floors occupied by the major investment bank of the time, Bankers Trust.
A trading floor was built at the bottom of the building, which is occupied by Swiss investment bank UBS today.
By 1993, many of the corporate deals began to dry up, but the times more than a decade later more than made up for it.
Chifley once again remained the nerve centre for major transactions amid boomtime conditions that came in the mid noughties before the global financial crisis.
Allens made way in the top floors for upcoming investment bank Babcock and Brown, headed by Phil Green, that was asserting itself as a major force, arranging financing of more than $42 billion. But the fallout from the GFC was heavy on Babcock and Brown, which spectacularly collapsed, leaving leasing agents scrambling to find tenants amid the downturn, and many floors of vacant space were carved up and offered to smaller tenants at more affordable prices.
Architect Kohn Pedersen Fox has done a lot of good buildings, but Chifley Tower was the best example
UBS, one of the most prolific deal-makers currently in the market, remains in the building today and on its trading floor unfolded one of the most memorable moments in banking — the punch-up involving the Swiss bank’s high- profile broker George Kanaan.
At the top of the building today paying eye-watering rents is real estate group Centuria, demonstrating boomtime conditions in the property market have come around again.
Morgan Stanley remains a tenant and is typically on large transactions, particularly in the infrastructure arena in recent years following a string of government asset privatisations.
Both UBS and Morgan Stanley worked on Transurban’s acquisition of a $9 billion-plus stake in Sydney road project WestConnex.
These days, the sorts of corporate identities who would have been seen at Forty One are now seen in the building’s Azuma Japanese restaurant.
A Japanese garden on the terrace and Azuma are the changes introduced by the former Japanese owner of Chifley, Kumagai Gumi, which took over control from Alan Bond. The firm is responsible for bringing many Japanese tenants into the building such as Sumitomo.
However, they have since left, making way for Singaporean banks, introduced under the ownership of Singapore’s sovereign wealth fund GIC.
Although Charter Hall owns the land below Chifley Tower, owning the leasehold of the building is the real prize.
Some observers wonder whether the acquisition of the land was to better position Charter Hall to secure the leasehold should GIC ever be a seller.
Perhaps the $3.6 billion Australian Real Estate Investment Trust has landed the deal to position itself to buy the leasehold site.
The Charter Hall Prime Office Fund owns the leasehold of the Australian Club, well known to many corporate figures, on the site next door, which may be ripe for development.
Should Charter Hall ever get the leasehold of Chifley, it would prevent the developer having to deal with objections over the obstruction of Chifley’s views by a taller building on the Australian Club site at 165 Macquarie St.
Charter Hall is, after all, a major player when it comes to ownership of top office space in Australia. Although rivalled by the Governor Phillip and Macquarie Tower complex next door, Chifley is considered the best.
This article originally appeared on www.theaustralian.com.au/property.