This article is from the Australian Property Journal archive
GLOBAL investment bank UBS will anchor Charter Hall’s $2 billion development of a new tower at Sydney’s famous 2 Chifley Square as major leases are signed in the recovering CBD market.
UBS will move its headquarters to the tower upon completion, while Charter Hall is also moving its head offices to the new tower, taking pre-commitments to about 16,000 sqm to date.
Charter Hall last month unveiled the new “Chifley South” tower, which will introduce nearly 65,000 sqm of office space built across 36 storeys above the podium and adjacent to the existing 70,000 sqm tower, “Chifley North”.
UBS currently has its offices in the existing tower, which is currently 100% leased – for the first time in over a decade – to tenants also including Morgan Stanley, Sumitomo Mitsui Banking Corp and Morgan Stanley.
Charter Hall funds teamed up with Singapore’s sovereign wealth fund GIC to buy the leasehold in 2019. a year after Charter Hall Prime Office Fund (CPOF) bought the freehold. CPOF also owns the leasehold of neighbouring Gresham Building.
Charter Hall manages 2 Chifley Square.
“This pre-commitment from UBS demonstrates the optimism in the future of the workplace, underpinned by our track record in delivering world-class buildings that are tailored to meet the long-term needs of our tenant customers,” Charter Hall managing director and group CEO, David Harrison, said.
Sydney’s CBD recorded 24,700 sqm of net absorption over the September – its strongest quarterly result since 4Q18 – while the vacancy rate fell by 0.2 percentage points to 13.0% as a result, according to JLL data, driven by businesses looking for larger spaces to accommodate headcount growth.
“As our cities re-emerge and businesses bring their people back to the CBD, there has been a clear flight to quality and this level of pre-commitment during our planning stage is evidence of that trend.” Charter Hall office CEO, Carmel Hourigan, said.
ARA Australia has reportedly secured the Department of Defence to its newly renovated 320 Pitt Street tower in the CBD. It has committed to 18,000 sqm for a 10-year term that brings the tower to full occupation.
Chifley South’s planning proposal won unanimous endorsement by the City of Sydney and is now progressing through the NSW government’s gateway determination process, which will be followed by a design competition and detailed development application process.
The new tower will incorporate sustainability features including a commitment to Climate Active Carbon Neutral certification for Chifley South and a commitment to enabling the Chifley Precinct to operate entirely from renewable energy, which Charter Hall said is aligned with its commitment to being net zero emissions in operations by 2030 and the ESG objectives of many of its investors, partners and tenant customers, including UBS.
Other features will include smart building technology, modern health and hygiene solutions, and wellbeing certification.
UBS has been at the Chifley precinct for over 15 years.
“As the largest tenant at the existing tower at 2 Chifley Square, we are pleased to be remaining within the Chifley Precinct while providing our people with a new workplace that is specifically designed to enable them to grow and thrive,” Australasia joint country head, Nick Hughes said.
