This article is from the Australian Property Journal archive
SYDNEY-based investor Futuro Capital is undertaking a $25 million revitalisation of the Melbourne CBD building home to RMIT University and the Tivoli Arcade, upgrading the tower into an A-grade mixed-use offering with high-end retail on busy Bourke Street.
Located at the far end of Bourke Street’s prime shopping stretch, the building was acquired across two deals by Futuro Capital, backed by investment partners Baring Private Equity Asia and Singapore-listed SLB Developments in 2020 and 2021. It bought the 14-storey office tower component from RMIT for $133 million and then the Tivoli Arcade, shops and car park from Venton International last year for $73 million.
Fender Katsalidis is designing the 38,000 sqm interior redevelopment of 235-251 Bourke Street’s entire ground floor plane, end-of-trip facilities, lobbies and amenities. Slated for completion in 2023, it is part of Futuro’s three-year capital expenditure program while RMIT remains at the building, planning ahead for re-leasing of the asset.
The mid-century tower – on the former site of the Tivoli Theatre – will be reworked as an A-grade commercial building, and Tivoli Arcade will be integrated with the commercial lobby and is intended to invite high street retail and up-market food and beverage offerings. Redevelopment will also see an improved internal link between the mall and the Rainbow Alley laneway, activating a previously underutilised public thoroughfare.
Futuro Capital executive director Ben Hopkins says the development is expected to be fully leased prior to the end of construction.
“We have been working closely with architects Fender Katsalidis and Bates Smart to redevelop a new destination hub on Bourke Street to feature top quality retail and commercial users,” he says.
“We’re already seeing an extensive amount of enquiry from retail and food and beverage tenants, drawn to the building’s attractive location, the expansive new commercial entrance and the upmarket retail offering through Rainbow Alley.”
Fender Katsalidis principal Rosie Morley says the challenge set by Futuro to “re-life” the aged asset into a premium commercial destination presented a new opportunity to restore the cultural currency of a historically significant site.
“Our approach has been to strip back the layers of materiality which have been added over time to reveal more of the building’s existing structure. The intention is to celebrate this original character, and tie it into the fabric of Melbourne’s unique laneway DNA.”
Connections at various levels will be introduced with double-height volumes, including an outdoor terrace on the third floor.
Melbourne Lord Mayor Sally Capp welcomed the project, saying it showed a huge vote of confidence in the future of the city centre.
“Melbourne’s architectural landscape is renowned the world over for our beautifully crafted buildings and inimitable laneways,” the Lord Mayor said.
“As we continue our sustained economic bounceback, it is thoughtful and quality additions to our CBD – such as this project at 235 Bourke Street – that maintain our reputation as the most liveable city in Australia.”
Announcements of the project comes as construction kicks off on a $200 million hotel redevelopment known as Melbourne Walk, on the Walk Arcade site in the heart of the Bourke Street mall shopping precinct.
The project will see delivery of two hotels with 450 rooms above a three-level shopping mall that will replace nearly the entirety of the 1980s arcade.
The hotels include a 180-room Hotel Indigo and 270-room Holiday Inn that are earmarked for completion by April 2024.
A few metres away, work has started on Newmark Capital’s redevelopment of the former David Jones menswear store that will accommodate retail stores and office space.
Newmark Capital acquired the six-level building in the middle of 2020 from David Jones’ parent company Woolworths Holdings for $121 million, and earlier this year secured major advertising agency Clemenger Group as anchor office tenant across 7,500 sqm over four levels – almost the entire office component – while beauty giant Mecca will take over the ground and first floor retail space vacated by David Jones, and fashion retailer Rodd & Gunn will open a new store at the building’s rear, facing Little Collins Street.
