First Bourke Street Mall Project in 50 Years Tops Out

A significant mixed-use development in Melbourne’s CBD, set to be the first project delivered in Bourke Street Mall in more than 50 years, is nearing completion.

The Melbourne Walk development, which recently reached its topping out milestone at 309-325 Bourke St, aims to address the city’s growing retail space deficit.

The project, developed by Melbourne-based Steadfast Capital and built by Hickory Group, will deliver more than 37,000sq m of space, including more than 6000sq m of gross lettable retail area across about 45 tenancies.

The development, from Little Collins Street to Bourke Street Mall between Elizabeth and Swanston streets, will feature flagship retail spaces, boutique concept stores and a rooftop restaurant.

Melbourne Walk’s first occupant is IHG Hotels & Resorts’ first dual-branded hotel in Australia, which will comprise Holiday Inn and Hotel Indigo brands and offer 452 rooms on levels 2 to 10 of the redeveloped site.

The 273-room Holiday Inn Melbourne Bourke Street Mall will cater to business and leisure travellers, while IHG managing director Australasia and Pacific Matt Tripolone said the 179-room Hotel Indigo Little Collins would offer guests a “boutique experience”.

The site’s design, led by global studio Buchan, incorporates heritage facades from iconic buildings, including Diamond House and the York Building.

Diamond House, an Art Deco building designed by HW & FB Tompkins and built in 1936, will have the facade featuring its iconic central fin retained.

The Allan’s Building, a narrow two-bay wide building built on Bourke Street in 1924—home to Australia’s largest music retailer until 2018—would continue to stand proud, Buchan said.

And, built in 1923, the eight-storey Art Deco facade of York House will stay. So too will that of the tall and narrow Public Benefit Bootery, which was built in the early 20th century.

▲ The Diamond House and Public Bootery facades will remain intact.

Each heritage facade would be integrated with a new addition to create a vibrant and engaging streetscape that respected the past while embracing the future, project architect Hayden Djakic said.

Research by Colliers indicates Melbourne faces a projected shortfall of 850,000sq m of retail space over the next decade, with potential opportunity costs of $6.4 billion in sales.

New retail floor space deliveries through 2026 are expected to be 53 per cent below the 2014-2019 average, despite a forecasted 17 per cent population growth.

▲ Monthly foot traffic in the CBD now averages 25 million visitors.

Steadfast Capital executive director Teck-Lay Tay highlighted the Melbourne Walk development’s strategic importance.

“As the need for new retail space increases, new retail assets, such as Melbourne Walk, are well-positioned to lessen the anticipated shortfall in retail space,” Tay said.

▲ Melbourne Walk will juxtapose the old and new.

City of Melbourne data shows growing confidence in the CBD retail sector, with permit approvals for shop and restaurant alterations increasing by 89 per cent in 2024. CBD shopfront vacancies have nearly halved since mid-2024, while monthly foot traffic now averages 25 million visitors.

The project is scheduled for completion in the first half of next year. Colliers, led by Michael Bate and Michael Tuck, and Tom Larwill are managing retail leasing negotiations.