Green Light for $2bn Second City Plan at Dandenong

Developer Capital Alliance has been given the green light to revamp the Dandenong city centre and create a second capital city. 

The $2-billion masterplan to create a high-rise urban centre and hub in the suburb 35km south-east of Melbourne was approved by Victorian planning minister Sonya Kilkenny. 

Capital Alliance and Development Victoria will team to create a mixed-use precinct on a 2ha site opposite the Dandenong Train Station. 

The plan includes a new Little India precinct on Foster Street to replace the existing on Mason Street.

That part of the plan has raised concern from traders and others about gentrification, high rents and authenticity. 

Apartments, offices, a hotel, healthcare facilities, education facilities and shops are part of the Dandenong plan that covers five blocks, known as Sites 11 to 15, from Settlers Square to Thomas Street along Fosters Street.

It includes more than 480 homes, with at least 10 per cent affordable housing, over 37,000sq m.  Around 12,000sq m of retail space, more than 117,000sq m of precinct space for commercial, healthcare, aged care and educational uses, 11,000sq m for a new hotel and 4000sq m for a dedicated educational facility are included. 

Early works will begin next year and construction is scheduled to start in 2026 after detailed designs are finalised. 

Development Victoria owns the land for Sites 11 to 15 and will transfer ownership to Capital Alliance a few months before construction work begins.

▲ A render of Halpin Way within the Revitalising Central Dandenong project.

Capital Alliance and Development Victoria have estimated that the revamp will generate $1.5 billion in revenue annually when completed. 

More than $600 million in private investment has gone into the project. 

The plan is part of a larger effort to revamp Dandenong first proposed almost two decades ago under the-then premier Steve Bracks. 

Several developers have attempted to realise the revitalisation of the hub incluidng Grocon that built new state government offices in 2012. 

The Australian Tax Office had a new building delivered in 2015 with a Quest hotel following in 2016 next to a civic square and municipal building in 2014. 

The Dandenong New Art Centre is due to be completed this year. 

▲ A map of Sites 11-15 in the heart of the City of Dandenong in Melbourne's south-eastern suburbs.

Capital Alliance has previously worked on hotels including the AC by Marriot in South Melbourne and the Peppers Hotel and Marriott Hotel in Docklands.

It won the tender to take on the Revitalising Central Dandenong project in 2020.

Dandenong moved from a town to part of Greater Melbourne when it was incorporated as a satellite city. 

It is one of the Melbourne’s most diverse suburbs with a large South Asian population.