Cloud hangs over STH BNK by Beulah, but developer remains “committed to delivering our vision”

Uncertainty continues to loom over the future of Australia’s largest high-rise development STH BNK by Beulah, with the developer understood to be desperately cutting costs in order to save its project.

With one of the project’s twin towers expected to soar 366 metres high, it would be the nation’s tallest if completed, with the developer also promising world-class retail and wellness precincts, a childcare centre, and more than 7000sqm of public green spaces.

In addition to apartments, commercial offices and a conference and entertainment centre, the proposed development also comprises plans for a Four Seasons Hotel and an innovative cultural centre in partnership with France’s revered Centre Pompidou.

As reported by Southbank News last month, Beulah reaffirmed that it had sold more than 80 per cent of apartments, however sources close to the project say these have been “undersold” amid rising construction costs.

A source within the property industry, who wished to remain anonymous, told Southbank News that the STH BNK by Beulah project as we know it “was not going to work” claiming that it was no longer able to finance its completion.

It added that the developer had been undertaking an ongoing series of amendments to the building’s design as it desperately find ways of reducing costs on its multi-billion-dollar project.

Another source, who also wished to remain anonymous, claimed that some apartment buyers had pulled out of the development amid increasing uncertainty over the project’s future.

Southbank News put a series of questions to Beulah, including whether it was no longer able to finance its project; whether it had made approaches to other developers to acquire the site, and if apartments had been undersold.

A question was also put to the developer as to if it eventually found itself in a position where it was forced to flip its site, whether it was hoping to sell with the active permit to ensure its current vision was fulfilled.

A Beulah spokesperson didn’t respond directly to any of the questions provided by Southbank News, but in a statement, it said it remained “committed to delivering our vision”.

“Construction costs have continued to experience unprecedented escalation over the past few years and STH BNK By Beulah is not immune to market fluctuations, but we remain committed to delivering our vision,” the Beulah spokesperson said.

“We have responded to the market conditions by modifying the number of basement levels while maintaining the overall integrity of the design, function, and vision. These amendments have been submitted, and we are actively working with the Department of Transport and Planning, the City of Melbourne, and the Office of Victorian Government Architects, all of which have been supportive as we navigate these changes.”

“For the past six months, we have also been working with our demolition contractor, Delta Group, who have been busy working with the City of Melbourne and adjoining owners on the Protection Works notices, with our demolition permit now imminent.”

We remain committed to delivering this project and look forward to commencing early works.

On background, the Department of Transport and Planning (DTP) confirmed with Southbank News that a planning permit was issued on April 20, 2020 under delegation from the then Minister for Planning Richard Wynne for the construction of two mixed-use, multi-storey buildings at 118 City Rd.

On April 11, 2023, an amended permit was issued by current Minister for Planning Sonya Kilkenny to incorporate the land at Hanover House at 158 City Rd into the site, resulting in changes to the built form and new access arrangements via Power St.

On December 22, 2023, an application was received to further amend the basement and podium levels.

Further changes to the amended application were recently presented to the Office of the Victorian Government Architect, the City of Melbourne and DTP officers.

The DTP said that Beulah was currently reviewing advice and would submit a revised scheme for further assessment.

But it added that an extension of time to the permit was only issued on March 4, 2024. The development is required to commence construction by April 20, 2025 or the permit will expire, however the applicant may apply to further extend the expiry date.

Since purchasing the BMW showroom site for more than $100 million in 2017, Beulah has undertaken an approach never seen before in Australia to market its Southbank project, generating a great deal of public excitement as a result.

In May of 2018, architects from six of the globe’s most prestigious firms were invited by Beulah to tour the site as part of a design competition where they were teamed up with the best in Australian architecture.

This culminated in a “design symposium” in July that year, with Treasurer Tim Pallas addressing an audience of around 500 guests, including Southbank News, at the Planetshakers auditorium on City Rd.

The local-international architectural teams each presented their visions, and at another special event held in the CBD a few months later, the winning team was announced as UN Studio x Cox Architecture for their “Green Spine” design.

At the time, the City of Melbourne’s deputy chair of planning Cr Rohan Leppert said Mr Pallas’s involvement in the design competition prior to an approval being issued created the perception of pre-emptive government support.

“I’m worried that this is the perception that’s being developed through an expensive public relations campaign, backed by perceived support from the Victorian Government architect who headed up the jury panel, and the treasurer who opened the ‘symposium’ that launched the shortlisted designs,” Cr Leppert said.

And since the project was initially approved in 2020, Beulah has staged a litany of activations at its site, including the repurposing of Hanover House into “BETA” – an arts, cultural and community “testing area”.

Other marketing activations have included immersive virtual tours, commissioning an artist to paint the rooftop of the former BMW showroom, and more recently it engaged vertical farming business Greenspace to establish a hydroponic macrofarm at the site.

In 2022, the Yarra River Business Association (YRBA) hosted the developer’s general manager of commercial and culture David Monaghan, who spoke about Beulah’s plans for “experience-based immersive shopping, harnessing new technologies and embracing sustainability”.

But despite all the activity, YRBA executive officer Tim Bracher said the community had been eagerly waiting for shovels to hit the ground for some time.

“Beulah burst onto our scene a decade ago, with an inspiring design and promises of great community facilities for the residents of 3006,” Mr Bracher said.

“We’ve now seen the longest and slickest marketing campaign ever for a development in Southbank, but after all these years we’re starting to wonder whether anything will actually be delivered.”

“A starting date, instead of constant hype, would be useful for the business community.”

Southbank Residents’ Association president Tony Penna also expressed his concerns with the project, saying “it would be a travesty to the Southbank community” should Beulah’s development not proceed.

“There has been much engagement with the community from the developer with regard their vision and offering. This development would transform City Rd and the heart of Southbank,” Mr Penna said.

“We are already concerned with the delays, but a complete cessation of the project would be most disappointing.” •