In the heart of a busy Melbourne laneway, just off Ridgway Place at the base of Monaco House, Palace Coffee occupies a modest 43 square metres. Yet from the moment it opened, it has handled crowds that would challenge much larger venues – up to 1,000 cups a day, with queues often spilling down the alley.

Kerry Kounnapis of Kerry Kounnapis Architecture Practice (KKAP) led the design, while Gordon Johnson and Huw Severn Smith from Tribeca Design + Severn Smith Design managed the build. Completed in 2024, the project transformed an empty shell into a finely tuned fitout.

The client’s brief was straightforward but demanding: deliver a high-volume espresso bar that slots naturally into Melbourne’s laneway tradition, while still feeling intimate and hospitable. Kerry drew on familiar references – Melbourne institution Pellegrini’s enduring warmth, the layered character of the Nicholas Building, even the functional elegance of European standing bars – to shape a space that acts as a quiet threshold between street noise and calm interior. The recessed frontage and projecting sculptural service window pull people in, making the architecture part of the daily exchange rather than just a backdrop.

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Materials do much of the heavy lifting here. Oxide-red steel defines the service window, serving double duty as facade and practical worktop. A back-lit fibreglass ceiling washes the space in soft, even light. A powder-blue wall provides a subtle, almost unexpected accent. But the real anchor is Big River Group’s spotted gum ArmourPanel, used generously on walls, in joinery, and as perforated screens that conceal services while maintaining openness and visual continuity throughout the space.

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Kounnapis explains the choice plainly: “We needed warmth to balance the steel’s boldness and the ceiling’s glow. The spotted gum delivers that in spades – its natural grain and tone add real tactility, it stands up to constant use in a hospitality setting, handles the fire requirements without fuss, and the sustainability side was a good fit. The perforated panels especially helped in such a tight plan; they let light move through and keep the detailing clean.”

That timber shifts the feel of the room. It softens the minimal lines, brings depth where things could have felt flat, and creates a calm counterpoint to the efficiency of the workflow. The overall narrative is about rhythm and small connections: the pause while waiting for your flat white becomes something shared, part of the laneway’s pulse rather than just another transaction.

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The project succeeded because of close collaboration between architect, client, builders, and fabricators, all working within a realistic budget and with an eye on minimising waste through durable, long-life choices. Since the doors opened, the response has been consistent: people comment on the warmth, how smoothly it runs, and how it encourages a bit of conversation even in the rush.

The project's success was recognised nationally when Palace Coffee received the Best Café Design award at the 2025 Eat Drink Design Awards. Judges praised the project for its confident simplicity, material warmth and thoughtful execution, demonstrating how a compact intervention can create a lasting impact when every design decision is carefully considered.

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Kounnapis reflects: “The most rewarding part has been seeing the space perform exactly as intended – efficient service, genuine warmth, and the materials still looking and feeling right under daily use. It’s become a natural part of the laneway.”

Palace Coffee embodies what makes Melbourne’s coffee scene special: thoughtful, understated, rooted in place. With natural materials such as timber providing essential warmth and tactility, it’s a small space that delivers a lasting, human impression.

Architecture & Design Team

Big River Group

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