A render showing what homes inside of the STH BNK By Beulah development could have looked like.
The $2.7bn super-sized Southbank tower that was supposed to become Australia’s tallest skyscraper appears to have finally succumbed to the nation’s building cost crisis.
Receivers have pushed the property planned to host the STH BNK by Beulah landmark to sale after the project management entity set up to operate the project, BSSPV Pty Ltd, went into administration last year.
The developer behind it, Beulah, had been working to save the project, but industry sources have indicated while a builder had been close to being appointed the cost increase caused by fuel price hikes amid the war in Iran had scuppered those talks.
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Listing agents at Cushman and Wakefield and at Stonebridge Property Group refused to clarify price expectations, though haven’t ruled out the possibility a new buyer could save it.
But it is expected the receivers will look to recoup at least the acquisition costs of the 7706sq m site that includes 118 City Rd and 158 City Rd.
That would put it into nine-figure territory, with Beulah having spent $101m to buy the former home of BMW Southbank at No. 118 and a further $40m-plus for Hanover House at No. 158.
Planning had slated the twin-tower complex to become a 789-apartment precinct that would have included the nation’s tallest tower standing a colossal 366m tall, including an observation deck and hotel, as well as a green-spined design intended to bring an urban forest into the sky.
A spokesperson from Beulah confirmed receivers were appointed to the two Southbank sites late last year.
The future landmark had been expected to have a helix-style design with extensive vertical greenery.
The staggering site would have joined a list of sky high complexes in Southbank.
“Since then, we have been progressing a range of parallel strategies, including refinancing the sites and engaging with potential joint venture partners, with a potential sale process forming part of these considerations,” they said.
“We are continuing to work constructively with all relevant parties to achieve a refinancing outcome and progress a resolution.
“The current campaign does not preclude the project proceeding, and presents an opportunity for an incoming party to realise the site’s development potential.”
The developer noted that rising construction costs continued to present challenges, though they intended to keep working with stakeholders towards a “positive outcome for all involved”.
The site has millions of dollars in pre-sale deposits associated with it, with some buyers having signed up for $35m purchase prices for the top homes in the complex.
“All purchaser deposits remain securely held in the project lawyers’ trust account in accordance with the Contract of Sale and applicable legislation,” the Beulah spokesperson said.
“These funds remain protected under the contractual arrangements and continue to accrue interest while held in trust.”
Renders showing a proposed podium rooftop area for residents and visitors.
Lavish planned residences in the building have already been sold for prices north of $30m.
The property listing is being slated as a “receivers sale” at the hands of Alvarez & Marsal and KordaMentha.
The commercial real state firm have tagged it as a generational development opportunity in Southbank’s riverside precinct.
It is being marketed with the scope for residential, build-to-rent, hotel or commercial development.
It could also be carved up with the two sites sold off separately, including the 6191sq m former home of BMW in Southbank.
The second site at 158 City Rd covers 1515sq m and currently hosts a five-storey office building.
The development had promised true skyhomes for future residents.
Developers had been expecting to create impressive residences to match the sky-high size of the complex.
Cushman and Wakefield agents including Daniel Wolman, Leon Ma and Oliver Hay, as well as Stonebridge Property Group sales agents including Julian White and Chao Zhang will work on the sale.
Mr Wolman said they expected interest from investors, offshore developers and syndicates.
Mr Ma noted that there were groups out there with the capacity to buy the site and finish off the project as planned, saving the site as Australia’s tallest tower. However, he noted that it would still need to stack up for them financially, which was less certain.
“But yes, there is a possibility it goes ahead as the plans and permits are all in place,” he said.
Mr White said the capacity for immense scale, and its location set it apart as a future project site.
At up to 366m tall, it would have become Australia’s tallest skyscraper.
Most residences were intended to have expansive views of Melbourne’s suburbs, the CBD and beyond.
“It’s an amazing piece of real estate and it’s incredible what you could do,” he said.
“The scale of it and the location … and there’s so much happening in Southbank.”
The suburb is already home to Melbourne’s two tallest towers, Eureka and Australia 108.
The announcement of the sale was labelled sad news by industry insiders.
Wizel Property Group founder Mark Wizel, who sold a number of the sites in the past, said Beulah’s vision had been “exactly the kind of bold, design-led thinking Melbourne needed”.
“It’s disappointing that vision hasn’t been realised, but it speaks more to the current economic climate than the quality of the ambition,” Mr Wizel said.
“As the site returns to market through a receivership processs, we’re likely to see a shift towards more traditional, deliverable residential outcomes.
“While that may lack some of the architectural flair originally proposed, it aligns with a very real and urgend need for more housing supply.”
An expressions of interest campaign is set to commence in May and is expected to end with offers due by June.
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