Kaufland asks for help to sell off Australian retail sites

Weeks after sending shockwaves through the Australian retail industry when it announced it would exit the market before it even got started, German hypermarket Kaufland is reportedly preparing to sell some of its prime Australian retail locations. 

According to The Australian, the retail chain is the process of seeking advice from real estate agencies about selling nine key sites located in Australia’s eastern states. 

Any potential sale of the large-format retail sites will no doubt affect other retailers in the surrounding areas, including small-to-medium businesses.

Kaufland revealed in January that it would withdraw from the Australian market without opening one store, despite investing in the vicinity of $523 million and hiring hundreds of workers. 

The retailer, which is owned by German-headquartered Schwarz Group, had spent years preparing to take a slice of Australia’s grocery market away from incumbents Coles, Woolworths and Aldi. 

Making the announcement in January, Kaufland said it would be focusing on its core European business. 

“In Europe, we see a great deal of growth potential. We will actively shape the consolidation of the European retail sector, thus further reinforcing our leading position,” said Kaufland’s acting chief executive Frank Schumann.

Since the shock announcement, speculation has been mounting as to which retailers, if any, would be interested in scooping up the large-format Kaufland sites. 

Kaufland has some 20 sites for mega 4000–7000 square-metre hypermarkets in its Australian portfolio, with planning permits confirmed in a range of locations, including Adelaide, numerous suburbs in Melbourne, Morayfield and Burleigh Heads in Queensland, and Newcastle in New South Wales. 

Meanwhile, the company said in 2019 it would invest $459 million to open a distribution centre and head office in Mickleham in Melbourne’s northern suburbs, and open stores in Epping, Dandenong and Chirnside Park. 

According to The Australian, the retailer will seek to first sell nine sites, which could either be sold as a group to one of the other supermarket chains, or shared among smaller developers, which may then look to bring in multiple tenants. 

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