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Rockin' the suburbs: new hotel developments flow through metropolitan Melbourne

Booming inbound tourism and a healthy major events schedule have allowed Melbourne's hotel sector to go from strength to strength over recent years, with levels of hotel development mirroring the upward trend.

Much of the hotel development activity naturally encompasses the CBD and surrounding suburbs, given it is the engine room for Melbourne's tourism and business streams. While these projects within City of Melbourne garner much of the attention, suburban Melbourne is also experiencing a surge in hotel activity.

Smaller in scale but just as dynamic a development sector, what is actually happening in Melbourne's suburbs in terms of hotel and serviced apartment activity? Urban Melbourne casts an eye over major suburban hotel and short-stay projects that are currently in play beyond City of Melbourne's borders.

While not absolute, the far-ranging list of projects below does provide a basis on which to assess the strength of suburban Melbourne's hotel sector.

Under construction

Most recent to begin construction is Sage Hotel atop Eastland Ringwood. Singaporean operator SilverNeedle will move in to the $36 million build under their Sage Hotel brand, with Probuild set to complete the 120 suite complex by late 2017.

Sage joins Quest Dandenong's 95 serviced apartments and Hyatt Place's 166 hotel suites which are both well into their construction schedules. Rounding out the suburban construction quartet is Whitehorse Towers, with Asian Pacifdic Group's 100 hotel suites found within an Art Series Hotels project dubbed The Chen.

Sage Hotel Eastland is underway. Image: MCG Cranes

Next in line

A trio of projects are next in line. Ringwood features once more with a mixed-use development at 96-98 Maroondah Highway poised to begin construction with builder CornoNero's signage across the site. Quest will anchor the development, which also features commercial space.

Further, two projects of note are close to becoming reality. Spotlight Development Group's mixed-use 402-416 Chapel Street has secured Starwood Hotels and Resorts as an operator, with their hotel brand Aloft set to grace the thoroughfare. 176 hotel suites are included within the development which will also feature 87 private apartments.

Aloft South Yarra. Image: hotelmanagement.com.au

In recent weeks developer JTX International outlined their plans for the hulking Craigieburn mixed-use development known as Humex. With construction expected to begin during 2017, the centrepiece of the project is a 12 storey, 285 suite hotel with JTX International declaring that they are in negotiations with Asian-based hotel operators to anchor the development.

In the wings

Less clear cut are the intentions of the developers behind the various approved hotel and serviced apartment projects across metropolitan Melbourne.

JTX International features again with its development at 37-63 Bell Street recently gaining approval; 156 hotel suites can be delivered as part of the mixed-use scheme. Also waiting in the wings are developments within Berwick, South Melbourne, Chadstone, Mount Waverley and St Kilda.

Worthy of mention is the conversion of the existing 38 Inkerman Street to the Ebony All Suite Hotel which will hold 80 hotel suites. Approval for the conversion was granted by City of Port Phillip at the start of the year.

A South Melbourne hotel permit issued during May. Image: Perri Projects

Two significant projects are currently at planning. 79 Bridge Road is seeking 27 serviced apartments within a mid rise building while the considerably larger 845 Whitehorse Road would encapsulate 150 hotel suites across its expansive podium structure, should it gain approval.

All in all, the projects outlined above result in roughly 1,700 additional hotel suites and serviced apartments across metropolitan Melbourne.

Invoking the crystal ball

It may be that some of the above projects do not proceed. Examples such as the failed Crowne Plaza Doncaster Hill and the on again, off again Space Hotel St Kilda come to mind.

Nevertheless, many of Melbourne's suburbs are rapidly evolving to the point where the economic case for hotel and serviced apartment investment stacks up. Major shopping centres and emerging apartment hot spots such as Doncaster Hill are catalysts for investment, but the likely growth in hotels throughout Melbourne's suburbs will come when National Employment Clusters truly take root in the suburbs.

Areas such as Bundoora, Clayton, Sunshine and Werribee East will in time lend themselves to hotel and serviced apartment investment; their manipulated geographic concentration and mixed use natures will demand it.

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