An artist’s impression of what would have been the world’s highest vertical garden to be built in the $2bn Southbank skyscraper.,
The lenders behind the soured scheme to build Australia’s tallest mixed-use project in Melbourne have put the site on the block, all but curtailing the original developer’s hopes for a $2.7bn high-rise scheme to rise on the site.
Two separate receivers, Alvarez & Marsal and KordaMentha, quietly stepped in to take control of the site where a local unit of the project’s developer, Beulah International, had planned a $2.7bn complex.
The project has been under a cloud since early 2025 when the development management company masterminding the scheme went into administration owing more than $100m. It had payments outstanding to top designers, consultants and lawyers, but these creditors accepted a deal to keep the project’s hopes alive. The developer tried to resuscitate the project, seeking a huge equity injection to get one of two planned super-tall towers started, but it could not lock down a backer.
La Trobe Financial appointed Korda Mentha and said it expects full recovery of its debt. An offshore bank is thought to have appointed Alvarez & Marsal.
An HMC Capital-managed fund also has a small exposure but it stands at less than 1 per cent of that vehicle. The developer has also provided a personal guarantee over this sum.
An artist’s impression of what the project should have looked like.
The project’s failure points to the exposure of private credit lenders on building sites, many of which are under pressure amid falling prices, rising interest rates and skyrocketing costs.
The developer is still hopeful.
The Beulah project management company – BSSPV – has 18 months to execute a deed of company arrangement after it struck a deal with creditors. It could still refinance the site, bring a partner in or sell its stake.
A spokeswoman for Beulah said it was “working with our stakeholders and financiers, we are continuing to explore several parallel strategies … including the exploration of a JV partner and starting construction, securing alternate financing, and, in the worst case, the sale of the site”.
Sales agents have billed the site as a generational development opportunity, with the significant island holding offering scale and flexibility. The sites are being offered either separately or in one line via Daniel Wolman, Leon Ma and Oliver Hay of Cushman & Wakefield, and Julian White and Chao Zhang of Stonebridge Property Group.
The properties, 118 City Road and 158 City Road in Southbank’s riverside precinct, were picked up in the last property boom and prices have since dropped. But they could suit residential, build-to-rent, co-living, hotel and commercial uses.
The combined 7706sq m dual-title landholding is underpinned by planning precedent for a super-tall development. The scheme to develop 789 apartments and what was to become Australia’s tallest tower is seen by experts as uneconomic and local developers are instead tipped to chase the site for smaller towers.
“We expect strong interest from institutional investors, offshore developers and syndicates targeting rare island sites capable of delivering landmark outcomes, particularly those with the flexibility to support multiple uses and adapt to evolving demand across residential and living sectors,” Mr Wolman said.