Developers fuel St Kilda’s Fitzroy Street rejuvenation
One of Melbourne’s most colourful streets is on the cusp of rejuvenation thanks to a series of commercial real estate developments and optimistic investors.
Fitzroy Street in the beachside suburb of St Kilda – once plagued by high rates of homelessness, illegal prostitution and empty storefronts – is about to welcome a wave of new builds and renovations.
Several developers, including Fortis, ERDI and Ondas, have partnered with the local council, the City of Port Phillip, to form the St Kilda Collective, an investment group focused on the future of the inner-city locale.
Institutional capital targets St Kilda
Fortis is leading the charge with its $131 million residential and commercial development, The Gild, at 61-73 Fitzroy Street. ERDI is converting the Rydges Hotel at 35 Fitzroy Street into a Novotel, and Ondas, the boutique development firm owned by billionaire AirTrunk founder Robin Khuda, is spending $50 million on a residential development at 3-15 Fitzroy Street.
In addition, restaurateur and former DJ Grant Smillie is investing in a makeover at The Prince, on the corner of Acland and Fitzroy streets, and The Ganley Group is expanding its Irish pub, The Fifth Province, at 60 Fitzroy Street.
ERDI chief executive Ricky Jeffs said he had watched Fitzroy Street deteriorate over the years, but was hopeful this series of investments could lift it to new heights.
“In 2008 when we bought [Rydges], Fitzroy Street was pumping,” Jeffs said.
“It was very well known for its restaurants and its vibe, and it had really high occupancy rates of retail properties on our end of Fitzroy Street. And then over the period of time since we’ve owned it, it’s actually flipped. So, our end of Fitzroy Street, which I’ll call the Acland end of Fitzroy Street, we saw lots of properties for rent, lots of restaurants come and go, lots of homelessness.”
Luxury upgrades replace old vacancies
Signs of gentrification began when the notorious Gatwick Hotel, a private boarding house for vulnerable people, was closed and later, in 2018, revamped as part of the TV show The Block. This was followed by the opening of the $50 million Victorian Pride Centre in 2021.
Jeffs said the area has also benefited from the $53 million upgrade works on the St Kilda Pier and the community work of Sacred Heart Mission, which supports people experiencing homelessness.
“The area’s changed – the Gatwick’s gone, the 7-Eleven, which was where the Fortis site is, no longer exists – so it is a much cleaner site,” he said.
“And if you look at the property prices in and around this area, it’s really solid. So, being close to the beach and being four kilometres away from Melbourne CBD, it should be a really popular suburb.”
The new Novotel, which is set to open in September, will house the same number of hotel rooms (134) as the Rydges, but will be expanded to include a conference centre for 140 people, a rooftop and a 100-plus seat restaurant and bar called Urban.
The concerted effort to unfurl a new chapter for Fitzroy Street will see former AFL player and South Melbourne publican Paul Dimattina take the reins at The Gild’s ground-floor cafe and deli. Both businesses, which are yet to be named, are expected to open by March 2028.
Long-term hospitality leases signal confidence
Dimattina said Fitzroy Street’s struggles with high vacancy rates didn’t put him off signing 12-year leases on both tenancies.
“Obviously, every precinct, they go through cycles and no doubt St Kilda’s probably indicative of that cycle,” Dimattina said.
“I think it’s probably gone through the lowest cycle it can have, and I have every confidence that it’s going to come back to being the iconic ‘place to be’ that it used to be.
“It’s a bit of a risk, no doubt, but you know what – life gets boring if you don’t take a risk.”
Dimattina has been running iconic South Melbourne pub Lamaro’s since 2017. His family’s hospitality group has run various venues in Melbourne but is best known for its coffee brand, Dimattina Coffee.
Building has started on The Gild, which will comprise 45 apartments and a rooftop entertaining area. As the anchor tenant of the building, Dimattina said he wants to serve hearty Italian food and create a space where people feel at home.
“As they say in life, you don’t get a second chance to make a first impression, so we want to make sure that our first impression is a lasting one and we’ll just have people wanting to come back more and more and really trying to create not just a business, but a community feel with what we’re doing,” he said.
“With both of the venues, I want to reflect our family’s Italian roots and our culture, and our love of coffee and food. And we’ll be serving Dimatina Coffee at both the deli and the cafe, but they’ll both be complementing each other in what we do there.”
