Melbourne-based developer Perri Projects was recently given the nod of approval to move ahead with their $50 million boutique hotel in South Melbourne.
The hotel is made up of five levels and will consist of 80 rooms, set to be developed on the corner of Moray and Dorcas Street.
The hotel is destined to become a piece in a bigger puzzle, as part of a mixed-use lifestyle project that will include restaurants, shops and a rooftop function and events centre.
Perri Projects' permit to develop the hotel was recently granted by the City of Port Phillip. The developers acquired the 700 square metre South Melbourne site in 2005 and then added two adjoining sites over the next few years.
Perri Projects Managing Director David Scalzo said South Melbourne was an emerging area for tourism and business with the Melbourne Convention and Exhibition Centre and the AAMI Park sports precinct nearby.
"There is a distinct lack of new, luxury hotel offerings in this area," he said.
The majority of existing hotel stock around St Kilda Road and South Melbourne is now ageing considerably so we've identified a real gap in the market for quality, bespoke hotels for business and high-end leisure travellers."
Mr Scalzo said the diversification into hotels is part of a broader strategy to increase Perri Projects' asset portfolio within its existing development projects and invest in long-term income-producing assets“Our current strategy is to develop and retain a significant portfolio of the retail and commercial facilities in our mixed-use masterplanned developments so we view investing in hotels as an extension of that.
Perri Projects is but one of the many multi-million and multi-billion Melbourne-based developers who have identified a challenging future in Melbourne's apartment market. The apartment market's boom has come off its peak, and investigating other sectors like hotels and the strata office markets have become more appealing.
Mr Scalzo said the developer planned to own and operate the South Melbourne hotel and would look to acquire further commercially zoned hotel sites in the coming years as well as deliver boutique hotel offerings within its masterplanned projects.
The Plus Architecture-designed hotel will include a pool, gym and business centre and is due to open in 2020.
Perri Projects currently has over $3 billion in projects under management across the eastern seaboard of Australia including the $600 million South City Square regeneration precinct in Woolloongabba, a $500 million West Melbourne Waterfront urban renewal project on the Maribyrnong River and its $102 million Albert Tower in South Melbourne.