Chifley Tower owners prepare to cash in
The private owner of the freehold of Sydney landmark Chifley Tower is exploring options that could see it dispose of its interest in the property for more than $100 million.
A sale would mark a windfall for the Europe-based family that picked up the land on which the Chifley Tower is built in May 2003 from the commonwealth of Australia for just $11.15 million.
Real estate agent Colliers International is handling the behind-the-scenes offering that comes just as Singaporean sovereign wealth fund GIC Real Estate put a half-stake in the 125-year leasehold of the $1.8 billion Chifley Tower on the block through agents JLL and Cushman & Wakefield.
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That offering of the 44-floor complex in Sydney’s central business district has been tipped to bring out both local and international groups keen to snare the prize asset. The leasehold expires on June 16, 2113, and the offer of the freehold interest could add to the overall allure of the tower for global buyers, even though it produces only a peppercorn rent.
The interest is held by the private Chifley Freehold Limited, an English company directed by James Arbib of London.
In addition to being offered to potential buyers of the GIC interest, the freehold interest would appeal on its own to superannuation funds, international pension funds and wealthy investors.
A sales campaign is likely to be launched shortly by Colliers International’s capital markets team.
The Chifley leasehold was structured in 1987 in a $306 million deal between the Hawke government and the late property and business tycoon Alan Bond.
A unit of the Kumagai Gumi group picked up the 125-year lease on the then uncompleted Chifley Tower in 1990 for $405 million.
It was then transferred to Japan’s Matsushita Investment and Development Corporation of Japan, which finished the tower in 1992 and the 69,000sqm complex picked up a host of international awards.
When it was built between 1989 and 1992, it was known as Bond Tower, and replaced the old commonwealth government offices.
Matsushita passed on buying the freehold in 2003 and then sold the leasehold to GIC Real Estate for $710 million in May 2005.
Occupying almost an entire city block, the landmark property 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 counts among its tenants investment bank UBS, alongside a who’s who of corporate Australia.
The pink-granite complex towers over the city with the curved glass facade on the building’s eastern side designed to represent a glass sail, inspired by Bond’s 1983 America’s Cup victory.
This article originally appeared on www.theaustralian.com.au/property.
