Australia’s Richest 250: Larry Kestelman’s towering ambition

Melbourne property developer Larry Kestelman is unveiling his biggest project yet.

Larry Kestelman with his partner Anita Pahor atop the Capitol Grand building. Picture: Nic Walker.

It is Larry Kestelman’s big moment. Turn right out of the lifts, which are exclusively reserved for just 38 apartment owners, on the 32nd floor of his $800 million Capitol Grand building in Melbourne’s South Yarra, and it hits you. Directly ahead is a large pool that extends right to the window’s edge, beyond which is a stunning view of Melbourne’s bayside and south-east suburbs. Chapel Street unfolds below. Turn right again and there’s a direct line of sight to Melbourne’s CBD through the floor-to-ceiling windows in a luxury dining private room. Turn the other way and the view extends all the way to the Dandenong Ranges in the east, viewed through a private gym.

“It is a bit of a ‘wow’ moment,” Kestelman explains to The List – Australia’s Richest 250 during a tour of Capitol Grand, which opened the doors to its exclusive Azure Club in mid-March. The Club consists of the owners of those 38 apartments, which range in price from $4 million to about $25 million and sit on floors 32 to 49 in Capitol Grand. They come with a separate street entrance and full concierge service, and that luxurious private amenities floor.

Kestelman says he has spared no expense. “I think we’ve chiselled half a mountainside and brought it here,” he jokes when pointing out the marble in the kitchens and bathrooms in the Azure Club apartments. The doors on every apartment, he explains, weigh 140kg and cost $4000 each. “We had to winch them up specially. You can’t lift them by hand.”

One $25 million, 520sq m apartment The List is shown on the higher floors has a 220sq m balcony with views to Melbourne’s northern suburbs, the Melbourne Cricket Ground and surrounding sports precinct, and the city’s CBD. Then there is the $50 million penthouse Kestelman and fiancee Anita Pahor will move into by the end of the year. He has moved the beams holding the roof up towards the windows, giving the full-floor apartment a feeling of wider space, accentuated by the 4.2m high ceilings.

Kestelman says the view from the amenities level and the luxury apartments above helps bring home what he has been trying to achieve with Capitol Grand, which he dubs the “tower of power”.

“The vision here has been to create something absolutely unique for successful people who want to live a particular lifestyle. This place is not necessarily for everyone, and I don’t think we intended it to be, but I believe the right people will appreciate it.

“It is really set up as a vision for how a certain community can live. And part of that vision is, without a doubt, luxury. We really want to set the standard here, and have a very vibrant community in the building as well.”

It is also the biggest project yet for the long-time Melbourne property developer and one-time owner of the Dodo internet and phone company, who has probably become best known for his ownership of the National Basketball League – he’s the only individual in Australia to own a sports league, and one of only a few around the world.

Kestelman was born in Odessa on the Black Sea in what is now Ukraine, and arrived in Australia at the age of 12 in 1978 with his parents. He studied business at TAFE, majoring in accounting, and then worked as an auditor – he jokes that property development is more fun, “because at least I’m not put in the darkest office in the corner, like I was in auditing”.

While his career progressed, Kestelman remembered the advice of a friend of his parents who told him the main money he could make in life would be in property. He bought a block of land in South Caulfield, planning to subdivide it, only to later discover it had a single-dwelling covenant on it. It took some time and plenty of wrangling with the local council to get that changed, and with the land then subdivided, Kestelman was on his way.

His big break came just after the first dotcom boom, when he and a cousin started the Dodo telecommunications business. Dodo was a success in a highly competitive but fledgling market, until it and Eftel were sold to M2 Telecommunications in 2013 for about $250 million.

Kestelman has since formed his LK Group, which includes a property development arm; a string of technology companies, including a stake in an extremely profitable Philippines call centre business; a private equity arm; and the NBL. He first became involved in basketball via Dodo, which took a stake in the then Melbourne Tigers as part of a sponsorship deal. He took control of the NBL itself in a $7 million deal in 2015.

Capitol Grand is by far his biggest deal, though, one that he says was born out of looking for an upscale place to live and love when he sold a home in Melbourne’s most prestigious suburb, Toorak, a few years ago.

“Look at all these fittings in our apartments – these are probably pretty standard in a good Toorak house,” he says. “But when I sold I wanted to find something similar in an apartment, but couldn’t. It wasn’t just a matter of downsizing, it was also downgrading.

“So I thought we could create something unique, and when this site came up, that is what we decided to do. I was inspired by the very best of private clubs and apartments that you would find in New York. That is what we want to do here.”

Most of the residents have already moved into the building, with all 90 apartments in the smaller 10-storey tower sold, as are those in the adjacent 50-storey tower up to level 31.

An amenities floor spanning both buildings on level two includes plush dining areas, billiards tables, libraries, a steam and sauna room, a private massage room, a yoga class space and a giant pool for the residents.

Another unique selling point is the involvement of artist-in-residence David Bromley, who has moved into a lower-level apartment with his family (Bromley is scared of heights). He is best known for a distinctive style of painting that includes female nude portraits and his children and butterflies and birds series, and an eclectic mix of his floor-to-ceiling prints, sculptures and furniture are scattered throughout Capitol Grand.

A Bromley studio will also open later this year and function as a working gallery that can also be used as a creative space for fashion, film, music, design and food joint ventures and events. It is part of Kestelman’s plan to bring the development’s community together.

“Luxury apartments are one thing, but I really want a sense of community throughout the building,” he says. “People don’t have to hang out with each other, of course, but there will be like-minded people there, and if a bit of business can be done here and friends can be made it will be good.”

At street level, a David Jones food hall is already operating as is the adjacent Omnia Bar and Bistro (Kestelman’s scarcely understated aim for the latter is that it be “the best bistro in the world”). A large HBSC bank outlet will wrap around the building’s outer corner, and sit between a 1Rebel gym and a high-end real estate agency next to upscale eyewear business OnePointSevenFour.

The building’s mezzanine level will feature Bromley’s studio, a Luxury Living Group furniture outlet, high-end sneaker store and a women’s hair salon, as well as a private members club fashioned on the exclusive Battery Club in San Francisco that counts tech billionaires and venture capitalists among its members.

Kestelman says he needs to sell the last half of the Azure Club apartments at the building’s top to complete his six-year mission at Capitol Grand, and to make a decent profit from the project. Next will come a smaller-scale luxury project in Toorak, and a planned $200 million mixed-use project around a refurbished basketball stadium in Hobart, which will have a new NBL team.

While he admits that Capitol Grand is his hardest project yet, when asked if he will ever do anything similar, Kestelman replies: “You never know. I’m the sort of person who when he hears something can’t be done, goes right ahead and tries to do it anyway.”