Vicinity set to open doors to $130m Sofitel Chadstone hotel
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Vicinity set to open doors to $130m Sofitel Chadstone hotel

Retail landlord Vicinity Centre's $130 million Hotel Chadstone Melbourne is set to open its doors in the coming months as part of the mixed-use development of the country's most profitable adjoining shopping centre.

The development, which was initiated in December 2017, will add a luxury hotel to an area of Melbourne that is seeing exceptional population growth.

It reflects the changing nature of shopping centres to become a community hub offering hotels, offices and apartments, as well as traditional retail tenants.

In Chadstone, the new Hotel Chadstone MGallery by Sofitel will be managed by AccorHotels, and is a 12-storey, 250-room hotel, with a rooftop conservatory bar, swimming pool and wellness centre, with views from Port Phillip Bay to the CBD and across the Dandenong Ranges, in Melbourne's south-east.

Renders of the $130 million Hotel Chadstone Melbourne, MGallery by Sofitel, owned by Vicinity and Gandel.

Renders of the $130 million Hotel Chadstone Melbourne, MGallery by Sofitel, owned by Vicinity and Gandel.

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The hotel, targeting a five-star rating, is more than halfway through construction with the interior fit-out under way. Although the doors officially open in November, the hotel is accepting reservations.

It is jointly owned by Vicinity Centres and the Gandel Group.

Chadstone general manager Fiona Mackenzie said construction had also begun on ‘The Link’, the covered pedestrian walkway connecting Hotel Chadstone Melbourne with the retail precinct and Tower One - Chadstone’s commercial office tower - as part of Vicinity's move to integrate retailers and office workers.

''Hotel Chadstone is part of Vicinity's broader strategy to create integrated, mixed-use destination centres, particularly in the strong south-east corridor of Melbourne,'' Ms Mackenzie said.

''From a portfolio perspective, the hotel concept could be used across the group's platform, where space and demand is available.''

Ms Mackenzie said Hotel Chadstone Melbourne would complement Chadstone’s visitor lounge, which opened late last year, designed to accommodate Melbourne’s growing tourism market with 12.8 million domestic and international visitors.

Neil Scanlan, general manager of the new hotel said there would be a strong link to the shopping centre through the hotel concierge and also for bigger events for the neighbourhood.

''We anticipate the venue could be used for weddings with the link to the shopping centre, as well as for the use of the cinemas and restaurants,'' Mr Scanlon said.

''Chadstone is a destination and the area's population is rising, so there is demand to have a luxury hotel in this location.''

It will also add to the booming national hotel sector, where Australian hotel sales volumes were a record total of $1.8 billion, across 37 transactions in 2018, according to Colliers International.

Recently AXA International expanded its Australian footprint with the acquisition of four key hotels in Sydney and Canberra for a combined $330.4 million, in the biggest deal in the sector to date.

Karen Wales, director, Hotels at Colliers International, said she expected to see more development sales over the coming year with projects being marketed in Canberra, Sydney, Adelaide and Melbourne.

''Hotel openings are expected to peak in 2019 with the opening of more than 6500 rooms in the 10 major accommodation markets, with Melbourne, Perth and to a lesser degree Sydney to see the majority of this supply increase,'' Ms Wales said.

Carolyn Cummins is Commercial Property Editor for The Sydney Morning Herald.

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