This article first appeared in The Edge Malaysia Weekly on March 31, 2025 - April 6, 2025

JUST as Malaysian-owned Beulah International was rolling out its most ambitious undertaking — a project set to be among Melbourne’s most iconic landmarks — the company was dealt a major blow.

Construction plans for its A$207 million (RM578.7 million) twin-tower project called STH BNK By Beulah in Melbourne’s Southbank precinct have collapsed on account of an unexpected and significant increase in construction costs, Beulah International founder and managing director Chan Jiaheng tells The Edge. The privately owned company is mulling three potential salvation options.

“The prolonged lockdown during the pandemic caused a significant cost escalation and supply chain disruption, especially in large-scale projects. STH BNK By Beulah is not immune to market fluctuations and Beulah, like so many other developers, has been navigating the construction landscape as best it can and working through how to respond after construction costs climbed significantly, up to 30% in 12 months,” says Chan.

He says the company is now exploring parallel strategies by, first, raising capital for the project by “locking in a builder to activate construction finance to maintain its progress. A second option would be to secure a joint-venture partner and explore new possibilities for the site. Lastly, the company could dispose of the site.

“All three avenues are currently being explored and, once the campaign concludes, we will choose the most suitable option,” Chan says.

Early construction works were due to have begun early this year on the project, which comprises a 102-storey tower and a second 63-storey tower atop a seven-storey podium on the former site of a BMW dealership at 58 Southbank Boulevard, but work has not started.

On Feb 11, BSSPV Pty Ltd, the project management entity for the STH BNK project, was put in voluntary administration — similar to judicial management in local law — after the project’s architecture firms lodged winding-up orders against it.

Chan notes that there is a separate landowner entity not under administration, and Beulah’s other projects remain unaffected, continuing to operate as usual.

Then, on March 19, creditors of BSSPV Pty Ltd voted unanimously for the company to execute a Deed of Company Arrangement (DOCA). Once the DOCA is formally executed within 15 business days, control is returned to the directors of the company; thereafter, the entity (BSSPV) will exit administration and will continue to progress.

“It is important to note that BSSPV doesn’t have authority over the site, [a point that] has been miscommunicated in some Australian press outlets,” Chan clarifies.

Asked whether it was true that boutique asset management firm Open Capital had been in talks with Beulah on a possible buyout of the ailing STH BNK project or to buy out the project’s main backer Malayan Banking Bhd (KL:MAYBANK), Chan says: “Beulah is currently exploring alternate financing for STH BNK and speaking to a number of capital partners both locally and internationally. We are unable to disclose names, [as we are] working through these options.”

Asked to comment, a spokesperson at Maybank says: “The allegation that Maybank has lost billions [in the STH BNK project] is incorrect. However, we are unable to comment further on any client matter due to confidentiality. Maybank has made all required financial disclosures as reported every quarter and annually.”

Beulah’s STH BNK project had drawn significant interest both locally and internationally.

“We recognised the rarity of the site when we purchased it in late 2017. It is a prime site, located in the heart of Southbank [flanked by] the bustling CBD and the Arts Precinct and Botanic Gardens,” says Chan. The 1.53-acre tract was put up for sale by BMW in 2017, via international tender, and Beulah purchased it for A$101 million, subsequently buying the adjacent 0.37-acre tract for an undisclosed sum.

Beulah said it achieved total sales of RM1.2 billion at its launch on April 2, 2022, marking the highest value sold in a single day for an apartment launch in Australian and Malaysian history. The sales figure included a record-breaking RM110 million sub-penthouse spanning 10,800 sq ft that is Melbourne’s most expensive apartment so far, according to a joint statement by Beulah and investment partner KHK Group — the private vehicle of Nirvana Asia Group founder Tan Sri Kong Hon Kong.

By November 2023, Beulah had reportedly sold about 80% of its apartments, albeit at prices that did not cover construction costs.

Established in 2009, Beulah International reportedly has a portfolio of at least 14 projects, including mixed-use developments, high-rise apartments and townhouses.

On Feb 10 this year, Fajarbaru Builder Group Bhd (FBG) (KL:FAJAR) via its entity FBG Land Sdn Bhd (FLSB) increased its stake in Australian property developer Beulah Northcote Land Pty Ltd (BNL) to 49% by acquiring 2.56 million ordinary shares for A$2.56 million. 

The group said the acquisition was part of FLSB’s strategy to maintain joint control in BNL and support its working capital needs for ongoing property development projects.

It is unclear whether Beulah International is related to BNL. 

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