An Aldi supermarket site is set to be leased to Dandenong Market for a peppercorn rate, as part of a Greater Dandenong Council proposal.
At a meeting on 13 September, councillors agreed to advertise a proposed 10-year lease of the King Street site to the council-owned subsidiary Dandenong Market Pty Ltd (DMPL) for a $1 annual fee.
The lease would come into effect on 1 November, two weeks after Aldi vacates the council-owned premises.
It would run to 30 June 2031 with an option of being extended by 30 one-year terms.
The site would be effectively managed as part of the adjoining market, a council report stated.
“DMPL has been successfully managing Dandenong Market operations since 2012 and are in the best position to maximise the trading potential from the vacated premises.”
Income from the King Street site would be shared 50-50 by the council and DMPL, reflecting a revised profit-sharing agreement struck in August.
Under the agreement, DMPL keeps “retained earnings” for capital improvements, equipment and repairs at Dandenong Market.
It is expected to self-fund capital projects up to $500,000.
The changed agreement was expected to cost the council $197,000 in 2021-’22, according to a council report on 23 August.
Cr Tim Dark said the King Street tenancy’s management was being transferred to DMPL because its directors had a “significant amount of experience” in retail and leasing management.
While it looked like a “very long term lease at a very low rent”, the rent from any new tenant would eventually be collected for the benefit of ratepayers, he said.
When Aldi’s departure was announced in June, Greater Dandenong Council and Dandenong Market were confident in finding a suitable replacement tenant.
“We anticipate there will be strong demand for such a prominent location within the vibrant market precinct,” the council stated at the time.
The proposed DMPL lease is required to first undergo community consultation.
Public submissions are open for 28 days.
