Gurner Group and Qualitas have filed plans for the third stage of the $3.75-billion transformation of Melbourne’s historic Jam Factory, revealing a redesign that replaces the previously approved commercial tower with sculptural ‘fluted’ towers rising from the heritage facade. The revised masterplan for the Chapel Street site at South Yarra is the third and final stage of what the developers describe as a “world-class precinct” anchored by a new Village Cinemas flagship and a north-facing public piazza spanning more than 1600 square metres. Project manager Matt Cox said the “reimagining” of the former commerical tower fronting Chapel Street was designed by global architecture firm Skidmore, Owings & Merrill, in collaboration with Buchan and the Gurner Design House. “This partnership aims to deliver an iconic placemaking experience that integrates seamlessly with an enhanced public town square and revitalised retail precinct,” Cox told The Urban Developer . The project would deliver 800 ultra-premium homes across five buildings, about 20,000sq m of luxury retail, commercial space and hospitality venues, alongside two yet-to-be-announced hotel brands. The hotel offerings would include a five-star property, currently in final operator negotiations, and a boutique lifestyle hotel. The premium hotel would feature function rooms, a conference centre, bar, restaurant, fitness facilities, spa, pool and ballroom. Gurner Group founder Tim Gurner said the development would take an “Australian icon and recreate it into a new standard in global luxury”. ▲ A rendering of the Chapel Street facade of the Jam Factory development. “We believe luxury and accessibility can—and should—coexist,” Cox said. “While the precinct will reflect Gurner’s signature design excellence and elevated lifestyle offering, the proposed changes also place strong emphasis on public benefit. “The improved design introduces a vastly improved town square with more green space and greater access to natural light—creating a more inviting environment for retailers and the broader Chapel Street community.” The updated plans include a curated retail and dining laneway called Lovers Walk, increased building setbacks providing 10 per cent more sunlight across open-air spaces, and revitalisation of Garden Street from a forgotten laneway into a key arrival point. Originally built in 1858, the site has evolved from brewery to jam production hub to retail landmark during its 160-year history. Heritage elements feature prominently in the design, with restoration of the Chapel Street facade and reconstruction of the heritage chimney as a centrepiece of the central piazza. The evolution of the project follows Gurner and Qualitas acquiring full ownership of the site in July 2024 , purchasing the remaining 65 per cent interest from Newmark Capital for $180 million. This transaction came after Newmark’s eight-year ownership of the site, which it originally purchased for $165 million in 2015. ▲ A rendering of the so-called Spanish Steps planned for the Jam Factory. The revised ownership structure has allowed the development to be phased into smaller, independently constructible stages—a strategic move in the current challenging construction environment to de-risk the project long-term. Homes in the development are expected to start from $750,000 and range up to $30 million for penthouses, with each building targeting a specific market segment. Luxury amenities would include arch-shaped pools, basketball courts and facilities that rivalled those of the world’s most exclusive hotels, Gurner said. Demolition, led by Mann Group, is already under way. Once complete, the Jam Factory site will cover 20,000sq m—equivalent to the size of the Melbourne Cricket Ground—and aims to re-establish the area as a “ globally significant lifestyle and cultural destination ”. The development is a significant attempt to revitalise Chapel Street, with Stonnington Council long maintaining that the area’s revival hinges on the Jam Factory's redevelopment. “This project is about more than just development—it’s about restoring the heart of Chapel Street and reimagining the Jam Factory as a place the entire city can be proud of,” Cox said.
