Melbourne’s luxe Shangri-La hotel a ‘ghost tower’ years from opening
One of SP Setia’s towers on La Trobe St, Melbourne, has yet to turn into the promised Shangri-La hotel.
A luxury Melbourne hotel turned white elephant ghost tower is years away from tourists enjoying its pools, health spa or 900sq m ballroom.
There are now suggestions prominent billionaire Adrian Portelli, and the McLaren Sena GTR he had craned into a $39m apartment at the CBD’s eastern edge, may never wind up with the tourist neighbours who were expected to move into the building opposite his home in 2024.
Industry experts believe the once heavily hyped Shangri-La hotel that was built as a sister tower to SP Setia’s Sapphire by the Gardens apartment tower could be “in limbo” for a considerable time.
RELATED: ‘Lambo guy’ Adrian Portelli pays record $39m for penthouse weekender
Victoria’s $38m apartment record could soon be broken by Sapphire by the Gardens penthouse
60-storey luxury hotel Shangri-La Melbourne hits the market with $500m price tag
The landmark tower’s external construction was completed during the pandemic and the hotel was supposed to open in 2024.
The hotel is currently slated for a 2026 start of trade, but it remains a “cold shell” with nothing but bare concrete walls inside.
A double-storey sky bridge between the two towers had expected to be opened to the public, with a glass floor 46 levels above ground.
SP Setia set a $500m sale price for the hotel component of the complex in 2022, but no sale is believed to have occurred.
The planned hotel’s feature list included a 900sq m ballroom, conference rooms, a day spa, health spa and club, indoor pool, bars and restaurants — some with outdoor dining.
Billionaire Adrian Portelli poses with the car he famously had winched up to the concrete shell of his future apartment. Hotel rooms planned for the neighbouring tower still remain in a similar condition. Picture: Instagram / @adrian_portelli.
One hotel industry source said the tower was “in limbo”, with the owners understood to still be trying to work out what to do — and that there was potential a partial conversion for different uses would turn some of it into homes.
With 496 rooms sitting empty, they said that even if a builder was brought in tomorrow it would be “12-18 months before you’d think about opening”.
“It’s a true five-star hotel, with big rooms and conferencing looking over the gardens,” they said.
Another industry insider said that with the building’s crane having been removed, the only way to fit the hotel out now would be via its service lift.
“If it is finished, with the crane down, to get it completed relying on the service lift — it would take forever.”
Plans for luxurious spaces within the two towers were detailed in renders years ago.
Renders of the project were first released some eight years ago.
They pointed out that while it was one of the first announced in a surge in Melbourne hotel announcements back in 2018, it would be the last to open.
“In that period we have had the best part of 30 hotels announced, built and opened, and this is still years away.”
A reduction in appetite from Chinese tourists could also be impacting efforts to get the hotel completed, as the Shangri-La was made with them in mind.
“The feasibility it was based on now just no longer works,” they said.
“There’s no way it finishes up un original form.
“No one wants to see a white elephant, but that’s the reality of what it is.”
Capital Alliance boss Mohan Du was more positive and said he thought the Shangri-La site was “in a tremendously good location” and that a lot of people in the industry wanted to see it finished.
Lounges and restaurants, with views similar to those on offer from the neighbouring residential tower, were part of the hotel’s plans.
Construction of the hotel and its neighbouring tower was completed years ago.
“It could only be good for the sector if that opens … and there’s definitely a market for it. The rooms would definitely be absorbed in Melbourne today.”
The prominent Melbourne developer, who has established a number of residential towers with Marriott-branded accommodation, said Melbourne’s hotel market was in the best shape it had been in for years.
“It was hard opening new hotels during Covid, but that ship has more than turned around,” Mr Du said.
That could mean the odds of the Shangri-La being finished off are rising.
The developer noted that at one point during the pandemic hotel occupancy in Melbourne had been as low as 30 per cent, and average room rates were as low as $100 a night.
It’s now almost back to pre-pandemic occupancy levels, with typical room rates now higher than they were before 2020.
Shangri-La hotels were contacted.
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: Hotel boom sweeps Melbourne — tourism growth drives building projects
Sebel Melbourne Flinders Lane reveals $5.1m hotel makeover
‘This s*** has to stop’: Adrian Portelli slams ‘stupid’ intruders entering his $39m penthouse
