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Major Overhaul Of Central Dandenong Set To Deliver New Homes, Jobs, Retail And Childcare

12th May 2026
Written by: Kiera Eardley

A significant new development has just been approved for central Dandenong, marking the latest milestone in one of Victoria's most ambitious urban renewal projects, which has been ongoing since 2006. 

Led by Melbourne-based developer Capital Alliance, stage one of the new development at 139–157 Thomas Street has been given the green light, with the aim of bringing new homes, retail, childcare, and employment to Melbourne's south-east.

The approval forms part of the broader Revitalising Central Dandenong initiative—a long-running project backed by $290 million from the Victorian Government, with around $700 million invested to date. 

Here's what's on the cards.

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How Many New Homes Are Planned For Central Dandenong? 

Housing is a central pillar in the first stage of the new development, with 470 new dwellings approved to address the demand for homes closer to public transport, jobs, and services in Melbourne’s south-east corridor. 

To ensure families and workers in these new households and the area are supported, a new childcare centre is also included in stage one.

New Jobs, Retail, And The Little India Precinct

An injection of an estimated $600 million into the Dandenong economy during development is anticipated to create around 2,600 construction jobs.

Once in operation, the wider project will support approximately 5,000 ongoing jobs across new commercial and retail spaces. The streetscape will be activated by a supermarket, food market hall, cafes, and dining spots, with several venues designed to complement the existing Little India precinct. 

The Vision For Dandenong’s New City Centre

The masterplan for central Dandenong carries an ambition beyond just bricks and mortar. At the heart of the project is a shared vision to restore the area to a lively, walkable city centre that reflects its multicultural community. This includes: 

  • Safer and more inviting pedestrian connections

  • Improved public transport connections between the station and city centre

  • Welcoming public spaces 

  • Buildings designed with strong environmental sustainability standards 

The long-term goal of the overhaul is to attract more people to live and work in the centre. In many ways, the groundwork is already laid; successfully completed projects like the City of Greater Dandenong’s civic building and regional library and the Quest Apartments hotel have all helped rebuild confidence in the precinct ahead of the next phase. 

What Does The Bigger Picture Look Like For Central Dandenong

Stage one of the Revitalising Central Dandenong project sits within a much broader 19-site masterplan. This spans seven hectares of central Dandenong, and upon final completion is projected to attract more than $1 billion in private sector investment. 

Already, Melbourne’s south-east produces almost half of Victoria’s manufacturing output and is home to more than one million people. This project aims to firmly re-establish Dandenong as the economic capital of the region. 

Demolition works on stage one are expected to begin soon. Nearby businesses and residents will be notified ahead of the project commencing.

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Main image credit: Development Victoria | Website