Site of renowned hostel Bounce hits the market in historical sale
A well-known St Kilda property leased by leading hostel operator Bounce St Kilda has hit the market for only the second time in 60 years, providing strong annual returns as a popular destination stay for budget travellers.
Located at 24 Grey Street, the fully leased freehold spanning 1680 square metres generates an annual income of $525,000 plus GST, with additional upside through turnover-based rent. The property features 42 guest rooms and ample amenities, including a cafe, common areas, a ground-floor bar, and a rooftop bar with liquor licenses.
Listing agent Luka Marolt at Crabtrees Real Estate Oakleigh, alongside Gavin Dumas and Pana Kritikos, said the presence of Bounce elevates the investment well beyond a typical hospitality offering as the hostel sector continues to perform.
“The hostel industry is an extremely reliable and resilient investment due to its flexibility and ability to diversify,” he said.
“Tourism remains strong and well established in St Kilda, which consistently attract both domestic and international visitors. We’ve seen during periods like COVID that when tourism demand softens, these types of assets hold strong by quickly and effectively evolving into alternative uses such as boarding houses or student accommodation. This adaptability makes hostels a highly defensive and bulletproof investment.”
With demand for social and affordable accommodation continuing to grow, particularly among younger travellers, well-operated hostels like Bounce, which operate nationwide, are increasingly viewed as future-proof investments.
The campaign, which launched on April 17, has already attracted solid enquiries from both local and interstate buyers.
“We’re seeing interest from investors who understand the strengths of this asset class,” Marolt said. “That includes experienced operators as well as investors already active in similar accommodation sectors.”
Beyond its operational performance, the property carries a unique history. The building originally served as St Kilda’s first town hall, once Melbourne’s second largest, before later becoming a coffee palace.
Over time, it evolved into a venue for theatrical performances, concerts and community gatherings, and today retains its heritage-listed facade across the three-level structure.
The property’s setting also benefits from its proximity to the beach, transport and a mix of hospitality venues, all of which continue to drive foot traffic.
Expressions of interest close at 3pm on Wednesday, May 20.
