The Mercato shopping centre in Byron Bay will be redeveloped into a leading hotel and entertainment centre, developers say.

Search efforts for an operator of a new 146-room eco-hotel and entertainment concept will soon get underway in Byron Bay as part of a project being developed jointly by the Mustaca and Pelligra investment and development families.

As part of a joint fund, the two families have acquired a 1.1-hectare site, part of which currently operates as the Mercato Shopping Centre on Johnson Street in Byron Bay. A development site for a hotel next door has already been approved by Byron Bay Council, with the Muscata and Pelligra joint venture set to redevelop the site.

The Pelligra family are no strangers to the hotel investment scene and already hold a number of assets in Melbourne and Adelaide, the majority of which operate under IHG Hotels and Resorts brands including Holiday Inn Melbourne Airport and Crowne Plaza Melbourne Carlton. Pelligra also owns two sites in Werribee and Richmond, both of which are in development and will become new locations for the Holiday Inn brand in the coming years.

Pelligra Group recently bought Rydges on Swanston and will soon rebrand it as Crowne Plaza Melbourne Carlton.

Speaking to HM, joint venture partner Sam Mustaca said following further consultation with the local council, stakeholders and the local community, efforts will be made to identify the right operating brand to manage the forthcoming hotel.

“Once we get a feel for what the community is after, and what the council and stakeholders in Byron Bay are after, we’ll look to tender out to the right brand that helps make Byron so special,” he said.

Muscata said Pelligra Group had identified some brands operating primarily overseas that they were eager to explore, adding that in his view, Byron Bay was crying out for a five-star offering right in the CBD.

“There’s no five-star quality offer within the Byron Bay CBD and the heart of Byron itself, so it’s crying out for it” Mustaca said.

The Mercato Shopping Centre in Byron Bay was recently acquired by the Mustaca/Pelligra joint-venture.

“The brand itself is yet to be seen. I think we’ll be looking for the market and the community to tell us what they’re after and see what comes from the market itself.

“Byron Bay, as you’ve seen throughout COVID, has become the place to be. Everyone who’s anyone is going there for a weekend or a week for a holiday. It has made its way onto the world stage.”

Mustaca added that he has fielded numerous calls from members of the community and local stakeholders urging him to incorporate a specialised wedding space as part of the new facility.

“People have been telling me ‘Whatever you’re doing with the hotel, make sure it’s beautiful and can cater for weddings. Make sure it can cater for people who want to come up here and have a destination wedding.’”

“We’re hoping that we can deliver to the community of Byron something that will be very special from a food and beverage, entertainment and leisure point of view. We want to bring some great brands from really great restaurant operators to great entertainment and really fulfil that piece of the market that’s missing in Byron Bay at the moment,” Mustaca said.