It’s an extravagantly lit, six metre-tall cocktail bar. It’s a modern Japanese restaurant. It’s a golden orb suspended from the ceiling that seats nine, and it’s a milimetre-perfect omakase: Yugen is a subterranean masterpiece told in several parts.

Yugen opened to instant acclaim in late 2022, its omakase experience bagging two hats in the Age Good Food Guide just weeks after its first service, both of which were retained in the 2024 Guide. Here’s culinary director Stephen Nairn, one year since Yugen hung its orb, with the lowdown on Chapel Street’s most dazzling Japanese address.  

Yugen is best known for being an amazing venue deep underground, with big flavours, cracking beats and delicious drinks. A few months after opening, we also launched Yugen Omakase, a six-seat dining experience on the mezzanine level of the restaurant with Alex Yu.  

How did Yugen first come to be? It started with the site, and then we workshopped ideas that would best suit it; I am very happy with the results.  

How has Yugen as a business grown since then?
The team has expanded due to demand. We’ve also opened another omakase experience called Nidaime: a more concise journey and a space for our young stars to shine.   

I celebrated Yugen’s one-year anniversary by having a sashimi platter with Alex Yu, head chef of Yugen Omakase. 

My favourite dish is the chawanmushi because it’s delicate but interesting.   

Some challenges we’ve faced have been soaring ingredient costs, the cost-of-living crisis and running a venue over three levels.  

My greatest supporters have been our loyal guests, who keep returning.  

An unexpected new skill I’ve learnt is drinking sake. I was always a fan, but some key members of the team have started me on a journey I will continue for life.  

The piece of equipment I never knew I would need is my open-hearth grill from Sam Fracaccio. It’s versatile and a great piece of equipment to show chefs what’s happening during the cooking process – teaching them to use their eyes, ears and touch, and be guided by aroma and taste.  

If someone asked me for advice on opening their new venue, I would tell them if you have prepared to the best of your ability, don’t sweat the small stuff. Enjoy the journey; it’s a marathon not a sprint. Refine daily. Get a wide range of feedback from multiple types of guests before making changes, from the sophisticated diner to the newbie. Don’t make knee-jerk reactions because a guest doesn’t like one particular thing. Accept that you won’t please every guest, or food critic, that you may receive harsh comments or reviews, but that you can’t allow that to overshadow the unbelievable feat that is opening a restaurant. It’s a physical and mental challenge. At the end of the day, you need to keep moving forward because you have a team and business to motivate.  

I’m most proud of our team. It’s been one hell of a journey. We have many people from many different backgrounds coming together with a shared vision to give our guests a great experience.   

I’m excited about the future because every cloud has a silver lining. The industry is going through a challenging time in a post-Covid world with rising prices and cost-of-living issues, but I am an optimist and I know that it’ll come back stronger than ever. We’re all in a very fortunate position to be living and working in Australia; sometimes we forget that but there are many places far less fortunate than here.   

This final question comes from last month’s featured business owner, Charley Snadden-Wilson of Clover Wine: What is something that has surprised you about the dining public, good, bad or otherwise? 
Key topics such as sustainability, ethical sourcing, always using local produce, and work-life balance are very popular conversations, nearly always gaining popular support. But when the impacts, whether financial or conditional, are presented, the reaction can be very different. That can be confusing when trying to do the right thing for your team and the environment.

Yugen, inside the Capitol Grand, 605 Chapel St, South Yarra, (03) 8080 8080, open 6pm-late Wed-Sun,, @yugendining