The tallest apartment tower outside of Melbourne’s CBD has won planning, despite controversy over the plans.

The Bates Smart-designed, 38-storey building will be developed on the site of an old hamburger diner in South Yarra.

The 1933 Capitol Bakeries building, with its art deco design on the corner facade, Moorish- and Byzantine-inspired large door motifs and early modern tower, will be razed to make way for the new mixed-use village.

The $150 million project includes 4,000sqm shopping centre and a six-storey, 7,500sqm office building.

The Victorian Civil and Administrative Tribunal (VCAT) has approved the Capitol South Yarra, which is being developed by a consortium of APN Property Group’s Development Fund Number 1 and the Palan and Tertini families.

“The design creates a distinctive and landmark built form outcome that distinguishes the site as a gateway while respecting the relationships with buildings on the other corners of Chapel Street/ Toorak Road intersection,” VCAT said.

The location’s famous boutique shopping, gourmet coffee houses, restaurants and buzzing entertainment scene will create “a unique and enviable blend of lifestyle and luxury”, Roger Poole, chairman of Bates Smart, said.

Michael Hodgson, a spokesperson for the developer, said it is in discussions with a number of “high quality” tenants to occupy space. He expects formal marketing for the remaining Capitol space to start within months.

Another proposal of a similar height is being considered in Box Hill. The City of Whitehorse is also evaluating an application to build an apartment tower and office building on a car park behind the Box Hill shopping centre.

VCAT approved demolition of the landmark art deco building in 2002 for the development of a 27storey mixed-use building. However the application stalled and several subsequent proposals including a Nonda Katsalidis designed tower have also faltered, previously giving the old building a temporary reprieve.

Gemma Battenbough

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