Justin Hemmes’ $148m Melbourne hospo empire stalls

Sydney bar king Justin Hemmes has splashed more than $148m on Melbourne pubs and landmarks, but with projects stalled, delayed and blocked, his southern empire is yet to pour a drink.

Justin Hemmes has sunk more than $148m into Melbourne’s pubs and landmarks, but three years on, the Sydney bar king has little to show beyond a stalled pub, a delayed tower and a $55m car park he can’t touch until 2037.

The Merivale boss stormed into Victoria in 2021 with the $38m buy of the Lorne Hotel and weeks later he snapped up Tomasetti House on Flinders Lane for about $43m.

He added Kantay House in Meyers Place in 2023, and capped it with February’s $55m purchase of the Parkade car park at 34-60 Little Collins St.

RELATED: The Melb 80s decor worth millions

Melb’s iconic landmark in $8m showdown

‘Smashing’ $2.65m+ sale for late tennis ace

But while the headline buys made waves, the execution has stumbled.

At the Lorne Hotel, only the ground-floor Totti’s restaurant has opened, with the rest of the redevelopment stalled.

Tomasetti House is running three years behind schedule, and the Parkade, billed by Hemmes as his “most innovative project yet”, has been frozen after the Melbourne Club swooped on the site’s lease with property giant Dexus, blocking any redevelopment until 2037.
An industry insider told The Herald Sun Hemmes Melbourne venture is puzzling.

The $38m Lorne Hotel was Hemmes’ first Victorian buy, but redevelopment plans have stalled. Picture: Supplied

Hemmes paid about $43m for heritage-listed Tomasetti House on Flinders Lane, it’s now three years behind schedule. Picture: Andrew Tauber

“He’s spent more than $100m here and barely poured a drink,” they said.

“That kind of delay would sink a local operator.”

Hemmes’ first actual Melbourne venue will instead be LB’s Record Bar, opening next month inside Kantay House in partnership with locals Zara and Michael Madrusan, a clear change of tack from importing Sydney brands to leaning on Melbourne credibility.

Kantay House in Meyers Place will finally host Merivale’s first Melbourne venue, LB’s Record Bar, this October. Picture: Supplied

Still, Hemmes insisted back in February any setbacks wouldn’t stop him.

“Parkade offers such an incredible opportunity to do something so special for the people of Melbourne,” Hemmes said.

“We’re committed to a long-term investment in Melbourne’s hospitality scene and community.
“Opening our first venue here is just the beginning.”

The $55m Parkade car park in Little Collins St is blocked from redevelopment until 2037.

Lord Mayor Nick Reece called the Parkade buy a “huge vote of confidence”, predicting it would generate jobs and millions for the CBD economy.

But a hospitality insider told The Herald Sun they aren’t convinced.

“What works in Sydney doesn’t always work in Melbourne, this city has a nose for authenticity, and it’ll sniff out anything that feels cookie-cutter,” they said.

Hemmes’ Coogee Pavilion in Sydney shows the scale of Merivale’s precinct model he hoped to bring south.

Respected Melbourne hospo locals Zara and Michael Madrusan are partnering with Merivale on LB’s Record Bar.

“Hemmes doesn’t just open bars, he buys landmarks.
“But Melbourne venues are built on character, not corporate real estate plays and the standoff with the Melbourne Club has amplified that divide.

“Flashy Sydney new money running headlong into Melbourne’s old guard.”

CBRE Hotels managing director Michael Simpson said Melbourne was one of the toughest — but most rewarding, markets in the country.

“Hospitality is notoriously hard, consumers are fickle, costs are high, and to succeed you can’t cut corners — you have to invest in the product and the people,” Mr Simposn said.

Mr Simpson said Merivale’s track record in Sydney showed it could deliver at scale.

“They don’t just open restaurants, they create enduring institutions. Mr Wong is still packed 14 years on, and Totti’s has become part of the social fabric,” he said.

And he said Melbourne’s hospo landscape, while fiercely independent, was fragmented, leaving room for a player like Merivale.

“Melbourne is a global city with a deeply ingrained dining-out culture,” Mr Simpson said.
“People here eat out more often and across more diverse formats than almost anywhere in Australia. The opportunity is obvious if you get it right.”

For now, Hemmes’ southern empire is more promise than reality, the next 12 months will show whether LB’s can open doors to Melbourne’s fiercely protective hospo scene — or whether $148m has bought him little more than headaches.

Merivale declined to comment.

Sign up to the Herald Sun Weekly Real Estate Update. Click here to get the latest Victorian property market news delivered direct to your inbox.

MORE: $14m new shopping centre in Eynesbury

Major retailer heading to Melbourne’s west

The Melb 80s decor worth millions

david.bonaddio@news.com.au