Developer Pelligra has acquired the Dandenong Plaza retail complex in Melbourne’s southeast for $145 million, following its hotel purchase in the same area last year.
The property had 53,768 sqm of gross lettable area on a 7.7-hectare site in the Dandenong CBD, about 35 kilometres southeast of the Melbourne CBD.
Dandenong Plaza was home to more than 160 retailers, including Coles, Woolworths and Aldi supermarkets, Kmart and Reading Cinemas, with parking for 3,157 cars.
The deal comes after Pelligra acquired the former Ramada Encore Hotel in Dandenong – one of Melbourne largest suburban accommodation assets – mid last year.
The Victorian Government’s Revitalising Central Dandenong urban renewal initiative has targeted the asset, as part of its long-term plan to restore central Dandenong as the capital of Melbourne’s southeast.
The initiative is expected to attract more than $1.2 billion in private sector investment.
Dandenong Plaza will play a central role, with a five-stage plan for the centre set to deliver an estimated 209,000 sqm of gross floor area for residential, retail, commercial and hotel uses.
In addition to the five-stage plan, there is also potential to deliver a further 125,000 sqm of GFA across future stages.
Dandenong Plaza’s existing main trade area population of 254,000 residents is forecast to grow by 0.9% per annum to 292,000 by 2036.
CBRE’s Head of Retail Capital Markets – Pacific, Simon Rooney managed the off-market sale of the sub-regional centre, which has a developed masterplan to expand and activate the site to accommodate a mix of uses.
The deal comes after Growthpoint Properties bought a government-leased office building in Dandenong for $165 million in May, reflecting a 5.3% initial income yield.
Recent Melbourne retail deals include the sale of a Dan Murphy’s store in Melbourne’s south-eastern suburb of Malvern for $21.1 million a week ago.
HomeCo sold a large format retail centre in Knoxfield in the city’s east to Troon Group for $45 million in May, while HomeCo Daily Needs REIT bought a Dan Murphy’s-anchored retail property in the Victorian city of Geelong from Wel.Co for $21.5 million in March.