Mapping out a recipe for Melbourne’s success

Chris Lucas is a hugely successful restaurateur, so when he looks at his hometown of Melbourne he thinks like a restaurateur, weighing the right combination of food, atmosphere and price that will have customers coming back.

Lucas has invested some $200 million in his Melbourne businesses and is passionate about a hospitality-led revival for Melbourne, the city that suffered the longest COVID-19 lockdown in the world. He’s confident the Victorian capital will hold its own among global and local rivals with its blend of hospitality, culture, art and events beating out a beautiful harbour or beaches.

“Melbourne really is a leader when it comes to hospitality,” Lucas told attendees at JLL’s Private Client Lunch held with Wingate. “We create, we have integrity. We have an extraordinary multiethnic fabric throughout our community, which is one of the best in the world. And believe it or not, we are still on a global basis, one of the cheapest places to go out and eat.” 

One of the fastest growing cities in the world, Melbourne is forecast to be Australia’s largest city by 2071 with a population of between 6.5 million and 9.9 million from 5 million now. Its population will surpass Sydney between 2032 and 2046, according to the Australian Bureau of Statistics.

For investors, the fact that Melbourne is set to “grow for decades and decades and decades to come” is a fundamental consideration, said newly elected Lord Mayor of Melbourne Nick Reece who joined Lucas and Jane Kelly, director of planning at Urbis, on the stage at the Wingate/JLL event.

Josh Rutman, executive director, head of capital markets - Victoria, JLL, steered the discussion towards how investors could navigate an adverse tax environment. “The sentiment is obviously down for Melbourne, and that's partially driven by the tax environment, it has to be said, which is not necessarily in the city’s control.” Nevertheless, Rutman added, there were big companies, including some from China that were choosing Melbourne – a point on which Reece agreed, saying a recent decision by Sepco, a leading Chinese construction company, to base its Australian operations in Melbourne was a “great get”.

“If you're out there thinking about an investment in Melbourne you don't just have to think about, ‘oh, what's it going to look like in five years, 10 years’,” Reece said. “This city is going to grow for decades. So, you can invest big time knowing there is decades of opportunity in front of us.”

To drive that opportunity, Reece has promised a 10-point plan for business that includes freezing council rates for a year, streamlining planning processes, offering tax relief and incentives for foreign corporates and creating a special economic zone that includes an off-the-plan stamp duty exemption and a tax holiday on foreign buyer land tax.

The $13.5 billion Melbourne Metro, due to start running next year, will be a game changer, according to Kelly, unlocking five new precincts and investment opportunities.

“In Sydney, in terms of the CBD, the foot traffic since the Sydney Metro opened only a month or so ago, we've seen a nearly 10 percent uplift in pedestrian activity, which is amazing,” she said. The Melbourne Metro will be “opening up areas that have sort of been forgotten about, creating new precincts.”

That will be one factor in helping transform the CBD into a 24/7 destination, drawing out the most value in the city’s restaurants, hotels, galleries and theatres, Lucas said. The “nighttime economy” will underpin Melbourne’s growth, he said.

That may be why Lucas’s latest venture, Maison Batard, includes a late-night supper club in the basement of the four-level French restaurant at 23 Bourke Street. A nod to the boulevard’s history as the “preeminent power entertainment restaurant precinct 120 years ago”, the restored heritage site also boasts a rooftop terrace.

The new Le Méridien Melbourne, a 12-story hotel from Marriott Bonvoy, has opened across from Batard. The O’Brien Group has a $20 million plan to transform the Jobs Warehouse on Bourke Street into a European-style food and arts drawcard.

At the other end of Bourke St, Lucas plans another two restaurants – one Greek, one Asian – in a $1 billion commercial office tower at 435 Bourke Street which will house the Commonwealth Bank’s new headquarters. The building is set to be one of the country’s greenest buildings.

Among other ideas pitched for the city is a seafood precinct with a fish market and a “little India” precinct, potentially in the city’s Docklands precinct. “We've got the biggest Indian population of any city in Australia by a mile, and it's going to grow massively over the next decade,” said Reece.

Collaboration between industry and government is paramount, as is drawing and highlighting the foreign investment coming into the city. A drive to get employees back into the office is set to pick up pace in the coming year.

Rutman said it was important to keep asking what else can be done to make Melbourne more attractive to foreign investors, private and institutional while Reece said it was important to press home the city’s unique advantages.

“It's the ultimate 20-minute neighbourhood,” Reece said. “You've got obviously office workers, CBD, business activity. You've got all the restaurants, all the amazing things that Chris Lucas and others are doing. You've got art galleries. You've got theatres. It's a truly buzzing, proper city.”

Rutman added: “We've had it really good for a long period of time. And we're going to have to roll up our sleeves to get Victoria back where it needs to be. And I don't think we're a faint-hearted bunch, so I'm sure we can get there.”