Gurner Gets Work Under Way on Jam Factory Site

After a decade of false starts and failed attempts, the wrecking balls have started swinging at Melbourne’s Jam Factory site, heralding the beginning of an ambitious mixed-use development.

Gurner Group has now commenced demolition works, marking the start of construction on its $2.75-billion mixed-use development it says will revitalise South Yarra, 4km south-east of Melbourne.

The milestone comes six months after Gurner Group and joint-venture partner Qualitas purchased the remaining 65 per cent interest in the site from Newmark Capital. The partners had held 35 per cent since 2021.

Mann Group will lead the demolition phase on the historic 20,000sq m site, for what Gurner said would be “a renewed world class cultural icon, and a destination for all of Melbourne that brings people together for dining, entertainment, culture and experiences”.

Heavy machinery arrived this week to begin removing non-heritage components across the site at 500 Chapel Street. The building’s historic facade will be preserved.

The residential component will deliver approximately 600 ultra-luxury residences across five towers.

The development will include more than 7000sq m of private amenities across its stages, including libraries, games facilities, and conservatory-like entertaining areas.

The development includes two hotel offerings—a five-star hotel currently in final operator negotiations, and a boutique lifestyle hotel. The five-star property will feature function rooms, a conference centre, bar, restaurant, fitness facilities, spa, pool, and ballroom.

The commercial precinct will include 10,000sq m of commercial private office space and 20,000sq m of luxury retail and hospitality areas.

Village Cinemas will return as an anchor tenant, continuing its 40-plus year association with the site with a new flagship cinema complex including Gold Class facilities.

The retail precinct aims to establish itself as a high-end shopping destination between Melbourne’s Collins Street and Chadstone, featuring a curated mix of luxury retailers, fine dining venues, casual eateries, and bars.

Central to the development is the Village Square: a 2500sq m north-facing public piazza.

Gurner Group founder Tim Gurner said the vision for the Jam Factory was “to create a renewed world class cultural icon, and a destination for all of Melbourne that brings people together for dining, entertainment, culture and experiences”.

International architects SOM will work alongside Victorian architects Buchan and Gurner Design House, while London landscape designer Townshend will create gardens planned to emulating Toorak mansion grounds.

First developed in 1858, the site has served as a brewery, preserving facility and retail precinct. The current redevelopment comes after several ownership changes and revised proposals.

In April, 2018, Stonnington Council approved a $500-million proposal from Newmark Capital, who purchased the site for $165 million in 2015.

The pandemic prompted a partnership between Newmark, Gurner and Qualitas in March of 2021, leading to a revised $1.4-billion development plan. Further amendments in October, 2023 included provisions for 448 apartments and a 164-room five-star hotel.

▲ The development is one of Australia’s most ambitious and transformative mixed-use precincts, according to Gurner.

The latest iteration emerged in July of this year when Gurner and Qualitas acquired full ownership for $180 million, supported by Qualitas’ recent $300-million commitment from ADIA.

Stonnington Council had long maintained that Chapel Street’s revival hinged on the Jam Factory’s redevelopment. 

Gurner Group also announced the appointment of former Crown Sydney and Crown Hotels chief executive Peter Crinis as group chief operating officer of hospitality.

Crinis will oversee the group’s hospitality ventures, including Saint Haven and SAINT Private Clubs, plus a pipeline of more than 10 hotels.

According to the company, Crinis will work alongside chief executive Ahmed Fahour and Tim Gurner to drive the group’s next phase of growth and expansion, applying high-end service standards across accommodation, retail, hospitality, clubs and sales.

The group plans to launch a hotel-specific capital fund in 2025.