German supermarket giant Kaufland coming to Melbourne

The deal follows Kaufland’s first purchase in Australia, a $25 million property on the fringe of Adelaide’s CBD, and more acquisitions could be ahead as the group embarks on an aggressive local rollout.

The expansion could put pressure on Woolworths and Wesfarmers-owned Coles at the same time as consumers are feeling the pinch from weak wages growth and US online retail juggernaut Amazon sets up its full retail offer in Australia.

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Kaufland has bought a former Bunnings site at 1-5 Gladstone Rd in Dandenong for $16.4 million.

The deal was struck with BWP, a trust that owns Bunnings Warehouse sites around the country. Bunnings left the building in July and moved to a former Masters site in nearby Dandenong South after the failure of the Woolworths-owned hardware venture.

German supermarket chain Kaufland will now have two stores in Australia.

Kaufland is openly looking for more sites for its Australian rollout, with a minimum size requirement of 15,000sqm and a preferred size of between 20,000 and 25,000sqm.

The group also requires roughly 400-capacity car parks at each location.

“Kaufland has an ambitious Australian investment and development program,” the group says on its local website.

“Therefore we are always looking to purchase suitable and appropriate sites. We look forward to hearing from you or appreciate any information on prospective sellers.”

Kaufland’s Australian arm also appointed a new director this week, Spanish-born and Melbourne-based Jon Ruiz del Portal.

Kaufland did not respond to a request for comment from The Australian by deadline.

The warehouse-style 20,000sqm stores Kaufland operates are about five times the size of traditional Coles and Woolworths supermarkets.

This article originally appeared on www.theaustralian.com.au/property.