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Grocery giant Kaufland buys second Australian site in Melbourne’s Dandenong

November 30, 2017

The German grocery giant Kaufland has purchased its second Australian site in Dandenong, Melbourne. Photo: Supplied

Ahead of joining Australia’s $90-billion grocery sector, German “hypermarket” Kaufland has bought its second Australian site in as many months, this time in Melbourne.

Backed by the wealthy Schwarz family – the fourth biggest retailer in the world – the supermarket giant is paying Bunnings Warehouse Property Trust (BWP) $16.4 million for an ex-hardware outlet at 1-5 Gladstone Road in Dandenong, about 27 kilometres south east of the CBD.

The sale price Kaufland has agreed to pay for the 12,313-square-metre Melbourne building on a 3.1 hectare holding reflects a substantial rise on the $13.3 million book value BWP attached to it on June 30, 2017.

Bunnings announced in March that it would vacate the premises and move to a former Masters outlet, in Dandenong South at 101 Princes Highway on the south-west corner of the South Gippsland Freeway.

The Dandenong acquisition comes seven weeks after Kaufland made its first Australian site purchase, outlaying $25 million for the ex-Le Cornu furniture depot, in the inner-city Adelaide suburb of Forestville, which is expected to be reconfigured into a store.

It is expected the supermarket will reconfigure the existing Dandenong building too, though this could not be confirmed with the group’s head of property development, Torsten Ohle, who was unavailable. It is as yet unknown exactly when Kaufland expects to open in Australia.

Kaufland hypermarkets can spread some 20,000 square metres – about four times the size of a small Coles or Woolworths supermarket.

The chain has more than 1000 stores outside of Australia, each with an enormous product range said to include more than 60,000 discount-type goods.

It is reported the group opts to buy rather than lease its sites.

Kaufland confirmed it was coming to Australia after another company controlled by the Schwarz family, Lidl, initially said it was interested in setting up, but changed its mind to focus on the US grocery sector.

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