$90m Mercure Melbourne opens as CBD’s largest new build of the year
Mercure Melbourne La Trobe Street, a $90 million hotel development, has opened on the western edge of the CBD, making it the largest purpose-built hotel to open in the city this year.
The 18-storey hotel marks developer Spacious Group’s first move into the hospitality sector. The design encompasses 195 rooms, a restaurant, a gym, and an outdoor terrace. The contemporary fit-out was completed by Sora Interiors, with architectural reimagining by LiFE Architecture that incorporates design elements inspired by the site’s industrial past as a tinsmith factory.
Sustainability was also a fundamental part of the design, and the building has achieved a 5-Star Green Star rating, supported by features such as solar panels, energy-efficient LED lighting, advanced insulation, and EV charging stations.
The location is one of the project’s key plays within the market. Positioned within walking distance of major city attractions, including Southern Cross Station, Marvel Stadium and Queen Victoria Market, the hotel is poised to attract a strong guest base from out-of-towners to corporate travellers working in the CBD.
“We’re in a unique pocket of the city and are fortunate to have great separation between ourselves and other tall buildings on all sides,” says Justin Phillips, the general manager of Mercure Melbourne La Trobe Street.
“So no matter where you stay in the hotel, you’ve got great views, whether it’s towards Docklands, back towards Flagstaff Gardens or views of the CBD and out towards North Melbourne.”
He says one of the hotel’s major drawcards is the Foundry, the hotel’s level-six restaurant and bar. It has been designed with an outdoor terrace overlooking Flagstaff Gardens and the CBD, which Phillips says will likely be a popular destination for after-work drinks, particularly during sunset.
Accor Pacific chief operating officer Adrian Williams says the opening reflects the continued evolution of Melbourne’s tourism and hospitality sector.
“The hotel brings a bold new expression of our Mercure brand to the heart of the city, thoughtfully designed for how today’s travellers live, work and explore,” he says.
With nearly 200 new rooms added to the CBD’s accommodation supply, the opening underscores growing investment in Melbourne’s hotel sector as developers respond to recovering tourism demand and a pipeline of major sporting and cultural events across the city.
It also comes amid renewed investor momentum in Sydney as well. The NSW capital has seen strong activity in inner-city hospitality assets, with a Darlinghurst accommodation building selling for $19 million earlier this year.
More broadly, Australia’s hotel investment market has rebounded strongly, with transaction volumes reaching around $2.7 billion in 2025 as investors target tourism-driven assets and markets with relatively constrained new hotel supply.
