V-Leader Swaps Out Hotel for Office Scheme

Plans to swap out the hotel component of a proposed Melbourne CBD tower for a $400-million office development have been approved.

V-Leader’s amended plans for the site at 600 Lonsdale Street replaces its previously-approved 288-key hotel and office plans with a 40-storey wholly office scheme.  

The tower will offer 30,000sq m of office space plus ground floor retail and a podium. Retail spaces will run from 600sq m to 1500sq m per premise. There will also be a 2000sq m wellness facility and a 1200sq m sky lobby. 

International architecture firm Skidmore, Owings & Merrill and local firm Fender Katsalidis Architects have designed the building. Demolition has begun on the site. 

The project will be carbon neutral with 24 terraced areas, a green column and solar shading using terracotta fins. 

V-Leader initally paid $48 million to buy out 15 strata owners in May, 2018. 

A year later, V-Leader paid a total of $52 million when the last strata owner sold their share in the building. 

The original plans had an estimated cost of $500 million for the hotel and office components but under the amended plans that has been reduced to $400 million. 

The Lonsdale Court building currently on the 1900sq m site was built in the 1920s and was once owned by buiness tycoon George Frew. 

▲ Proposed plans for the $400 million office tower at 600 Lonsdale Street in Melbourne's CBD. Source: V-Leader

V-Leader’s change of plans comes as worker numbers in the CBD stagnate but interest in office spaces in the CBD fringe suburbs booms.

V-Leader managing director Andy Zhang said many workers wanted a hybrid work lifestyle post-pandemic.

“There’s been a huge shift in how people work and what tenants desire from an office space,” Zhang said. 

“As hybrid working is widely adopted, tenants are now looking to empower and enhance their employee’s wellbeing through workplace experiences.

“The design of 600 Lonsdale is in direct response to this and reflects V-Leader’s desire to produce market-leading developments that actively respond to the evolving work environment.”

Earlier this month, the developer behind a planned $57.3-million inner-city tower was given approval to change the project from hotel to residential.  Blue Earth Group had initially filed plans for a hotel development on the West Melbourne site.

There have been changes in the Melbourne CBD’s hotel market as well—Hotel Lindrum changing hands for $50 million while SP Setia is looking for buyers in the $500-million range for the new Shangri-La hotel that is now in the fit-out phase and due to open early next year.