Singapore tycoon Michael Kum’s plans to expand his hotel holdings in Melbourne hit a planning hurdle earlier this year after authorities rejected his bid to amend a permit to build a hotel in the historic Equity Chambers in Bourke Street.
Mr Kum’s M&L Hospitality paid $30 million for the inter-war Equity Chambers office at 472-478 Bourke Street in June 2017, a purchase which at the time slipped under the radar.
The heritage-listed, Romanesque style, six-storey building has an elaborate portico, foyer, coffered ceilings and rooftop terrace.
It was built in 1931 on the site of Melbourne’s first synagogue.
M&L Hospitality purchased the property with an existing planning permit allowing for the partial demolition and development of a residential extension, taking the building to 17 levels with 215 apartments.
An amendment to the original planning permit approved in May 2018 changed its use into a hotel and office plus 151 apartments, but also included - significantly - some stringent setbacks.
The new setback controls require Mr Kum’s company to alter its plans and remove three hotel rooms from level 5 and an outdoor terrace on level 6.
The Singapore-based real estate billionaire, whose wealth was originally acquired in shipping, objected to the change and made a bid in Victoria’s planning tribunal to delete the new conditions requiring the setbacks.
Melbourne Council maintains the setbacks were needed for the hotel plans to comply with mandatory requirements in its planning scheme.
Victorian Civil and Administrative Tribunal member Philip Martin ruled in favour of the council but said the case involved a “very complicated and challenging area of the CBD planning controls”.
“Hence it is clear to me that there is no ‘black and white’ answer to this dispute,” Mr Martin said.
M&L Hospitality said it would abide by the ruling and not appeal the decision. Further planning was underway and the company would push on with building the hotel, it said.
Industry data from STR shows Melbourne's hotel room supply rose 2.5 per cent over the year to last August with a corresponding 1.8 per cent rise in demand.
Revenue per available room - the industry metric for judging performance - rose 1.3 per cent to $151.18 over the same period. Since then the city has hosted the Australian Open tennis tournament, which usually fills hotel rooms to bursting.
M&L’s website lists a portfolio of 18 upmarket hotels in Singapore, Australia, New Zealand and Europe largely managed by Hilton, as well as Australia's biggest hotel, the recently enlarged Hyatt Regency at Darling Harbour in Sydney.
Its Melbourne property at 270 Flinders Street operates under the DoubleTree by Hilton brand.