Southpoint housing tower in Highett risks fresh cost overrun for Melbourne’s Suburban Rail Loop

A high-rise tower approved eight years ago and now being built next to the Suburban Rail Loop’s planned Cheltenham station has sparked a multimillion-dollar headache for the Allan government.

A new housing high-rise given the green light by a council eight years ago has sparked a multimillion-dollar headache for the Allan government because it is being built on top of the $35bn Suburban Rail Loop.

The planning shemozzle threatens to derail the development, which recently began construction, and would undermine a key aim of the SRL – to boost housing in middle Melbourne.

The project, called Southpoint, is for 217 apartments across two towers in Highett, in Melbourne’s southeast, with views across Port Phillip Bay and the CBD.

It is across the road from the planned Cheltenham station for the SRL and Westfield’s Southland Shopping Centre.

The Southpoint development in Highett is under threat from the Suburban Rail Loop. Picture: Supplied

Construction has begun at the site on the Nepean Highway opposite Westfield Southland. Picture: David Caird

The Herald Sun has learnt that the depth of the new high rise project’s foundations has sparked concerns due to their proximity to SRL tunnel infrastructure.

Discussions between the SRL Authority and developers began in 2022 about changing the boutique complex’s designs, but construction has now begun – including for three levels of basement car parks.

If the issue is not resolved it could lead to an expensive redesign and a legal bill for costs, or an acquisition of land under the towers — both of which would add to the Big Build’s bill.

The SRL Authority, which is also the planning authority in the area around planned stations, has the power to halt works, but has not yet stepped in.

Piling rigs had been at the Southpoint site to drill the building’s foundations, but it is unclear how far they went down.

The site is being developed by H1Land Group, which describes its aim to “bring high quality, value for money residences in Melbourne’s well-established, sought after suburbs”.

It took over the permit from another Chinese-backed developer, which had obtained a permit at the Victorian Civil and Administrative Tribunal despite Kingston Council objecting to its height, which was above an eight-storey limit in that area, and room designs that in some cases used a “snorkel” corridor for access to natural light.

The state’s planning tribunal backed the scale of the build because it was close to public transport and Southland shopping centre so met a government aim “to deliver more housing close to jobs and public transport”.

Recent project documents spruik the proximity to the planned SRL, which was first revealed in 2018 but did not lock in the current alignment until 2022.

The project, called Southpoint, is for 217 apartments across two towers.

Development manager at H1Land Sean Wang said parties had signed confidentiality agreements that limited what he could say about the issue.

But he said there was “nothing I’m aware of” that would halt construction.

A spokesperson for the SRL Authority said it had been working with the developer since early 2022 to reach an agreed design for the building’s foundations that would accommodate the SRL tunnels.

“We have been working with this developer for several years to ensure its multistorey residential building can be built without affecting the twin SRL tunnels, including assistance with redesign works to help achieve this outcome,” the spokesperson said.

“SRL East is on time and on budget and tunnelling will start in 2026 – with 70,000 passengers expected to use SRL East every day within a year of opening.”

The SRL East is designed to connect Cheltenham to Box Hill via a twin 26km tunnel, with six new underground stations at Cheltenham, Clayton, Monash, Glen Waverley, Burwood and Box Hill, and is scheduled to open in 2035.

An artist's impression of a Suburban Rail Loop station at Cheltenham. Source: Supplied

A permit for the Southpoint project was first gained in 2016. Picture: David Caird

A planning control over SRL land around six station precincts and a stabling yard at Heatherton was introduced in 2022, following the approval of the tunnel alignment between Cheltenham and Box Hill.

This was done to shield planned rail infrastructure from developments, such as towers with deep basements, that could damage its structure.

The standoff between the SRL and Southpoint is a blow to the SRL, which is designed to usher in major housing developments such as the 217-apartment complex being built.

“This is the sort of project the SRL is supposed to encourage,” one insider said.

A senior industry source said the swift start to construction at the site would be likely to increase damages sought if land was acquired, or if there was a forced change to the project.

They said if construction had already begun it could increase the multimillion-dollar compensation that would be sought.

If the developers declined to alter their designs it is unlikely the depth of the SRL tunnel could be altered to avoid acquisition, due to the fact that a Cheltenham station – which would be built across the other side of Nepean Hwy to Southpoint – is the start of the line and there was no scope to shift it further back.

The Suburban Rail Loop plan was unveiled by former premier Daniel Andrews and current premier Jacinta Allan in 2018, without the knowledge of the state’s top transport bureaucrat.

It is designed to eventually connect to all radial rail lines between Cheltenham and Werribee via a 90km orbital “loop”.

Experts say the full project would likely cost $200bn if it was eventually built.

Independent estimates by the Victorian Parliamentary Budget Office show the first two stages of the project, which would be about 60km from Cheltenham and Tullamarine, would likely cost $134bn to build and maintain over the next five decades.

Originally published as Southpoint housing tower in Highett risks fresh cost overrun for Melbourne’s Suburban Rail Loop