This article is from the Australian Property Journal archive
DEVELOPER Pelligra has acquired the Dandenong Plaza retail complex in Melbourne’s south-east for $145 million, with an eye to its substantial development upside.
The sub-regional centre, which was sold with a developed masterplan to expand and activate the site for a mix of uses, has a gross lettable area of 53,768 sqm on a 7.7-hectare site in the Dandenong CBD, around 35 kilometres out from the Melbourne CBD. It was acquired from a fund whose backers include the Abu Dhabi Investment Corporation and managed by MA Financial, and previously managed byArmada which picked up the mall seven years ago for $197 million from GPT.
Simon Rooney, head of retail capital markets at CBRE, Pacific managed the off-market sale which sees Pelligra add to its landholdings in the area, after it last year purchased the former Ramada Encore Hotel – one of the city’s largest suburban accommodation assets.
Dandenong Plaza’s five-stage masterplan paves the way for delivery of a further 209,000 sqm of floor space for residential, retail, commercial and hotel use, with potential for a further 125,000 sqm across future stages.
Currently, Dandenong Place includes more than 160 retailers, including major players such as Coles, Woolworths and Aldi supermarkets, in addition to Kmart and Reading Cinemas and parking for 3,157 cars.
Sitting just off the Princes Highway, the property offers good access to road and rail connections.
The centre will also no doubt benefit from the Victorian government’s Revitalising Central Dandenong urban renewal initiative, which plans to restore central Dandenong as the capital of Melbourne’s south east over 15 to 20 years, with over $1.2 billion in private sector investment expected.
The plaza’s existing main trade area population is currently at 254,000 residents, and is predicted to grow by 0.9% each year to 292,000 in 2036, while retail spending is anticipated to grow from $3.0 billion to $4.8 billion in tandem.
Retail sector deals across the country tallied $6 billion in the first half of 2022, according to MSCI Real Assets. Melbourne retail transactions were down 46% year-on-year to $775 million over the period.
Pelligra is fresh from its $130 million acquisition of the 85 Spring Street office building in the Melbourne CBD, where it plans a $300 million refurbishment of the 10,700 sqm building. It had previously been subject to redevelopment plans from Grocon and Golden Age Group, and was bought from Anton Real Estate Partners.
