The centrepiece of the Bourke Street Mall revitalisation, Melbourne Walk officially topped out in September, marked by a ceremony attended by the City of Melbourne Lord Mayor Nicholas Reece.

Developed by Steadfast Capital and built by Hickory Group, the mixed-use retail and hotel development will be the first project delivered in Bourke Street Mall in more than 50 years.

Construction at Melbourne Walk commenced in September 2022, with the topping-out ceremony marking an important step on the road to the CBD’s retail renaissance.

Once complete, Melbourne Walk’s total area over three retail floors, the two hotels and rooftop restaurant will span over 37,000m2. The development will offer more than 6,000m2 gross lettable area for retail and comprise approximately 45 tenancies, including a rooftop restaurant, lounge, bar, flagship retail along Bourke Street Mall, and boutique concept stores facing Little Collins Street.

Negotiations with retailers are underway by leasing agent Colliers, led by Michael Bate and Michael Tuck, with the retail plan and tenancy mix continuing to evolve.

Recent research by Colliers reveals that Melbourne’s rapid population growth is significantly outstripping the expansion of retail space, with new retail floor space deliveries through 2026 projected to be 53% below the average from 2014 to 2019 across the metropolitan region.

With a projected population growth of 17% across Melbourne over the next decade, the undersupply is projected to result in a shortfall of 850,000m2 of retail space. The gap has a forecast opportunity cost of approximately $6.4 billion in potential sales to existing retail assets. The supply and demand imbalance is predicted to place upward pressure on Melbourne and CBD retail rents.

Teck-Lay Tay, Executive Director of Steadfast Capital, said, “As the need for new retail space increases, new retail assets, such as Melbourne Walk, are well-positioned to lessen the anticipated shortfall in retail space.

“The provision of new, quality floorspace at Melbourne Walk will meet the growing need for new retail environments and offer retailers a prime opportunity to contribute to Melbourne CBD’s economic growth,” said Tay.

George Abraham, Managing Director, Hickory said, “Melbourne Walk is a landmark project which stands as a testament to our vision of creating better places for future communities. At Hickory, we are proud to have contributed to a development that blends heritage with modern design and will enrich the lives of generations to come.”

According to data from the City of Melbourne, permit approvals for alterations to shops and restaurants are on the rise, up 89% in 2024, signalling a vibrant resurgence in the CBD retail sector. This surge in activity reflects growing confidence among retail traders, underscored by a significant reduction in shopfront vacancies within the CBD, which have nearly halved since mid-2024.

Retailer confidence could be linked to growing foot traffic levels, with the City of Melbourne’s Pedestrian Counting System recording a monthly average of 25 million visitors to the CBD in the year-to-date to August 2024. Further, tourism’s contribution to the City of Melbourne’s economy reflects an upward trend, with a contribution of $6 billion in the last reporting period (2022/2023), up $2.4 billion from the previous period (2021/2022).

City of Melbourne Lord Mayor Nicholas Reece said the development of the Walk Arcade site and its surroundings would enhance Melbourne’s status as a thriving retail precinct and a must-visit destination for locals and visitors.

“Melbourne Walk will play a pivotal role in shaping the next chapter of the CBD’s retail story. Alongside the changing character of Little Collins Street, this precinct will emanate a uniquely cool character that cannot be replicated in suburban shopping centres,” said Reece.

Hotel Indigo’s entrance foyer

Melbourne Walk’s first occupant is IHG Hotels & Resorts’ (IHG) first dual-branded hotel in Australia, which will comprise the globally-renowned Holiday Inn and Hotel Indigo brands, and offer 452 rooms on levels two to ten of the redeveloped site.

Holiday Inn Melbourne Bourke Street Mall will be a new and modern 273-room hotel, while Hotel Indigo Little Collins will offer 179-rooms.

Matt Tripolone, Managing Director – Australasia & Pacific, IHG Hotels & Resorts said, “IHG Hotels & Resorts is proud to be partnering with Steadfast Capital on the Melbourne Walk redevelopment and greatly appreciates the significant investment Steadfast has made in the revitalisation of Melbourne and the accommodation sector more broadly.”

Global design studio Buchan is delivering the architecture and interior design for the entire project. Running from Bourke Street to Little Collins, the site will be characterised by the juxtaposition of old and new.

Project Architect at Buchan, Hayden Djakic, said the redevelopment will pay homage to the site’s rich heritage by preserving the historic facades of iconic buildings, Diamond House, Public Benefit Bootery, Allan’s, and the York Building.

“Each heritage facade will be seamlessly integrated with a new addition to create a vibrant and engaging streetscape that respects the past while embracing the future. Internally, a network of pedestrian arcades will link through the site, taking cues from the ‘grit and glamour’ character of Melbourne’s celebrated arcades and laneways,” said Djakic.

Completion of Melbourne Walk is anticipated for the first half of 2025. Project partners Hickory Group and Delta Group have created approximately 600 full-time jobs throughout the project timeline.