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A 400-seat hospitality venue has been stopped in its tracks after an international property developer allegedly thwarted tenant plans.
In mid-2021, hopes were high as Melbourne entertainment venue Paddle Battle got set to launch in Aurora Melbourne Central, one of the city’s newest skyscrapers.
The innovative retail and hospitality concept – which aimed to combine ping pong with a licensed restaurant and bar – was expected by investors to attract 200,000 patrons a year and create over 150 jobs.
However, over the following years the venue’s promising plans were dashed when the landlord, Malaysian property developer UEM Sunrise, suddenly terminated the lease.
UEM Sunrise, which has been described by investors as a “billion-dollar juggernaut”, allegedly gave the tenant Eatertainment incorrect information prior to the signing of the lease, which later prevented the tenant from obtaining their liquor licence and completing fit-out.
The landlord also reportedly required Eatertainment to spend $500,000 out of pocket in air conditioning upgrades after UEM Sunrise provided incorrect engineering drawings.
Eatertainment stated that it engaged in several mediation attempts, but UEM Sunrise instead terminated the lease, leaving the tenant “facing a potential loss of $3.3 million already invested and an additional $4 million needed to finalise construction and open Paddle Battle”.
Eleanor Barratt, co-founder of Eatertainment subsidiary Home of Hospitality, expressed disappointment about UEM Sunrise’s conduct in what the tenant described as “a quagmire of broken assurances and representations”.
She stated that UEM Sunrise was a development giant “whose only interest is to lock us out of a lease through long-running, expensive legal action”.
“I fear for the flow-on effect it could have for other projects, where investors will be scared off by the David and Goliath battle we find ourselves in,” Ms Barratt said.
“They build apartments and have no experience in nor understanding of the hospitality sector. We’ve been able to stave them off so far, but if it continues this way, they’ll be putting a stop to an exciting venture for the city at a time when investment in Melbourne’s retail precinct has never been more critical,” the investor stated.
In November 2023, the Victorian Civil and Administrative Tribunal (VCAT) found itself in support of Eatertainment’s rights under the 2021 lease.
However, the tenant stated that it is pessimistic about the landlord’s willingness to adopt “a reasonable, commercially-minded approach”.
“We’re calling on UEM Sunrise to cooperate and collaborate, rather than actively impeding what would be an exciting addition to Melbourne’s hospitality and entertainment landscape,” said Ms Barratt.
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