PROPERTY funds management giant Charter Hall has begun works on its $1.8 billion Chifley South development, where it has just secured the signature of law firm Gilbert + Tobin across 9,000 sqm.
Gilbert + Tobin brings pre-commitments to over 55%, and joins investment bank UBS and Charter Hall Group as a future occupant in the tower, which will be a companion to the renowned 70,000 sqm Chifley tower in the Sydney CBD core.
“The bifurcation of tenant demand toward the highest quality office accommodation has been further evidenced by this strong level of pre-commitment prior to construction commencement,” said David Harrison Charter Hall managing director and group CEO.
Charter Hall is backing the flight-to-quality trend being seen across the broader office market and has forged ahead with major developments, despite supply being considered a contributor to higher vacancies being seen around the nation’s CBDs. Last year it completed the 43,000 sqm 60 King William Street in Adelaide, as well as the 40,000 sqm Australia Post HQ complex in Melbourne.
“We’re pleased to have reached this important milestone on schedule and to be working alongside our long-time construction partner, Built,” said Charter Hall office CEO, Carmel Hourigan, said.
“Together we’ve delivered some incredible projects across Australia totalling 150,000 sqm in lettable area, with a total on completion value exceeding $1 billion. We are excited to be well on our way to realising our vision for Chifley South and the entire Chifley precinct upgrade.”
“Chifley has always been known as a pre-eminent address for the business, finance and legal community in Sydney, and the strong endorsement of Chifley South’s world-leading sustainable design further validates our view that this precinct will continue to command the status as Australia’s leading CBD office precinct for premium quality workspace.”
Gilbert + Tobin is relocating from Barangaroo.
Gilbert + Tobin’s executive partner, Tim Gordon, said, “We’re particularly excited by the project’s emphasis on sustainable design and are really looking forward to what will be a cutting-edge work environment for our team and clients.”
Chifley South will feature precinct-wide electrification with 100% of energy from renewable sources. It is also targeting Climate Active Carbon Neutral Building certification.
Charter Hall is targeting practical completion in 2027. Upon completion, the precinct is expected to comprise a $3.8 billion two-tower complex owned by a wholesale partnership with some of Charter Hall’s largest wholesale investors, including GIC, VFMC and TelstraSuper.
Charter Hall yesterday reaffirmed its full-year earnings guidance for post-tax operating earnings per security (OEPS) of about 75c. It yesterday posted post-tax operating earnings of $195.1 million, reflecting OEPS post-tax of 41.2C.
Statutory earnings came in at a loss of $190 million.
Distributions per security guidance is for 0.6% growth.
