Pelligra Group plans mixed use precinct for $145m Dandenong Plaza buy

Pelligra has bought the Dandenong Plaza retail complex in Melbourne for $145m.

Developer Ross Pelligra is buying a shopping centre in the Melbourne suburb of Dandenong with plans to redevelop the $145m property into a major mixed use precinct.

The developer’s Pelligra Group is picking up Dandenong Plaza from an unlisted fund run by the listed MA Financial Group, which owned it for about seven years after buying it from GPT.

Mr Pelligra is poised to undertake a broader mixed use play on the site in keeping with the trend towards revamping older shopping centres.

The Dandenong centre spins off a hefty income but came under pressure from Melbourne’s extended lockdowns and, more recently, high interest rates.

But the suburb is benefiting from efforts to make the area a regional centre.

The Andrews government and the City of Greater Dandenong are pouring close to $300m into the Revitalising Central Dandenong urban renewal project over the next two decades, with overall plans to draw more than $1.2bn in private sector investment.

While the centre is anchored by Coles, Woolworths, ALDI, Kmart, and cinemas, the real drawcard was the 7.7ha site, which can support a multistage masterplan allowing the incoming owner to develop about 200,000sq m of residential, retail, commercial and hotel property.

Developer Ross Pelligra. Picture: Dean Martin

Mr Pelligra is likely to consider undertaking a project that would include a hotel.

The transaction was brokered off market by Simon Rooney of CBRE with Nick Willis of JLL advising the buyer but they were unavailable for comment.

The centre last traded in 2015 when property group Armada Funds Management, with the backing of the Middle Eastern fund Abu Dhabi Investment Council, bought the mid-sized shopping from GPT for $197m.

ADIC has been active and last year it sold a 50 per cent interest in Roselands Shopping Centre in Sydney’s southwest to investor JY Group for $167m.

The purchase of the centre was Armada’s largest single asset play and the firm later was bought by Moelis, which became the MA Financial Group.

The most recent sale of the 53,957sq m shopping centre is also a sign of the pick up in activity in demand for subregional centres.

Mr Pelligra is best known as a sports owner and his empire may be expanded into new football clubs in addition to his purchase of Italian side Calcio Catania. But he has a long record in property.

In June, Mr Pelligra swooped on a long empty office block in the heart of the Melbourne CBD for about $130m and plans to refurbish the complex as workers return to cities.

That move to buy 85 Spring St from Anton Real Estate Partners was one of a series of plays around the country by the developer, showing its faith in both cities and the hospitality market.

His Pelligra Group and partner Giannarelli Group are also forging ahead with a $480m hotel and superyacht marina at Main Beach on the Gold Coast.

It is also working across Australia on hotels with hospitality giant IHG Hotels & Resorts and the pair last month unveiled the Holiday Inn & Suites Mawson Lakes.