Render of the new proposed QT Hotel on Fitzroy Street, St Kilda.

New Fitzroy Street hotel expands on the QT

15 February 2020
By Sydney Morning Herald, Nicole Lindsay

The Erdi Group has quietly acquired a Fitzroy Street property next door to the Rydges hotel it is planning to convert into a funky new QT Hotel.

Title deeds show the Rydges hotel owner, Urban St Kilda - a subsidiary of the Erdi Group - has paid $4.2 million for 33 Fitzroy Street shop, which is squeezed between the hotel and Cafe Di Stasio.

CBRE agents Rorey James, Josh Rutman and JJ Heng negotiated the off-market deal which translates into a strong land rate of $14,483 a square metre.

Erdi Group chief Ricky Jeffs said the shop had been vacant for three years and after settlement, they found it had been stripped bare.

“There’s nothing left. No windows, to taps, no toilets - nothing,” Mr Jeffs said.

The shop will be demolished and used for a new six-level hotel that will also be constructed around and above the existing Rydges. Erdi Group bought the original hotel for $17 million in 2008. The new 130-room hotel will also have a rooftop sky-deck.

"It will be a real entertainment hotel," he said.

Construction is poised to start in the middle of the year and completed in 2021. The new facade is inspired by Marilyn Monroe's famous white frock in The Seven Year Itch.

Mr Jeffs is enthusiastic about the levels of investment in the St Kilda foreshore strip - including the Espy and Gurner’s Saint Moritz development - and Fitzroy Street but he says the shop vacancy rate is the biggest problem.

“How can we get landlords to change their expectations of what rents they can achieve for their premises. It’s difficult because a lowering of rents can trigger a lower valuation,” he said.

Shop vacancies on the street jumped to 32 per cent last year and the City of Port Phillip is trying a range of remedies to help revive it, including pop-up art galleries.

The Prince of Wales hotel has just opened its revamped public bar and the landmark seven-level $40 million Victorian Pride Centre, designed by Grant Amon Architects, and Brearley Architects and Urbanists, is due to open mid year.

The council lured the landmark Victorian Pride Centre to the strip in 2017 with a tender that exchanged the 977 sq m site at 79-81 Fitzroy Street, valued at $13 million, for the renewed activity the LGBTIQ centre is expected to bring.

Cushman & Wakefield agents Michael DiCarlo, Alexia Gatti and Steve Makris are marketing the office and retail space for the VPC. Thorne Harbour Health, radio station Joy 94.9 and other services are moving into the centre.

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