Aldi is expected to build a large supermarket at the prominent 1 – 19 Dundas Street site, on the north-east corner of Plenty Road, near the High Street junction.
The property was previously a manufacturing facility for smallgoods manufacturer Otto Wurth. Most recently, it’s been used as an open air car dealership, sources say.
An Aldi spokeswoman did not return calls but well placed industry sources say the off-market transaction is well advanced.
Any Aldi development poses a direct threat to rival Safeway, the major tenant at South Preston Shopping Centre, which was until recently owned by Macquarie Countrywide.
Aldi already trades from Preston Market, Heidelberg West, Northcote Central and Brunswick, within five kilometres of its new South Preston site.
Elsewhere in the area, the Preston Bowls Club sold its bowling green and club room at the junction of Murray Road, St Georges Road and Spring street last month, for a price believed to be more than $3 million. That site is earmarked for apartments, with some form of ground floor retail.