Construction of the first of three mixed-use hotel and residential towers in Melbourne’s Docklands is under way with the hope they will spark an after-dark revival of the vast urban renewal zone.
Docklands was recently revealed to be an economic powerhouse with workers generating $103 per hour in goods and services compared with a city wide average of $53 per hour, according to the Grattan Institute. But lines of shops remain empty on some streets and parts of Docklands are veritable ghost towns at night and on weekends.
Construction of M Docklands at 677 La Trobe Street adjacent to Etihad Stadium has begun, with the 19-level building due for completion in early 2016.
M Docklands will include a Mantra-managed Peppers Hotel over four lower levels and 186 apartments over the remainder of the building which has an end value of $136 million.
“We have a lot of confidence in Melbourne and Docklands,” said Mantra Group’s director of development and acquisitions, Michael Moret-Lalli.
The 87-room hotel will be targeted at the corporate and leisure market with rates starting from around $260 a night.
It is Mantra’s first Peppers hotel in Melbourne. In the neighbouring Digital Harbour precinct, construction of the 37-level Altus tower featuring a 281-room hotel to be managed by Singapore-based Pan Pacific Hotels under its Parkroyal brand, will begin construction in mid-October. The Altus will include serviced apartments and 299 residential apartments. “The hotels should create a better 24/7 environment with more people around after hours,” said David Napier executive director of Digital Harbour, a precinct controlled by a group of Melbourne investors including the Liberman family and Qualitas.
“Melbourne occupancy rates are already high and we need hotel rooms at the northern end of Docklands,” Mr Napier added. A third mixed-use project by listed Singaporean developer Hiap Hoe – the $500 million Marina Towers project in New Quay, which received approval in June – is due for completion in 2017. It will include a Four Points by Sheraton hotel operated by Starwood Hotels & Resorts Worldwide.
Places Victoria urban renewal general manager Simon Wilson said completion of the Peppers Hotel would help drive more business to nearby New Quay restaurants and activate the stadium precinct. Mantra has signed a 25-year lease over the hotel component of M Docklands with 171 out of 186 apartments now sold. Mohan Du of Capital Alliance, the developer of M Docklands, said the majority of apartments had been sold to local buyers because they were priced at a more affordable level. “Apartments in M Docklands average $8600 per square metre compared with $10,500 in other Docklands developments,” Mr Du said. “Simply by looking at what’s happening in the precinct, it’s obvious Docklands will become the future economic and lifestyle hub of Melbourne.”