German supermarket chain Kaufland has put its multi-million dollar Australian property empire on sale just weeks after announcing their exit from the market.
Kaufland had been expected to compete with Coles and Woolworths – undercutting the established giants by as much as 20 per cent – before announcing their ‘orderly withdrawal’ from Australia last month.
Commercial estate agent Colliers International has been appointed to find a buyer for nine mixed-use development sites in Queensland, South Australia and Victoria.
German supermarket giant Kaufland – which last month announced its shock withdrawal from the Australian market – has put its multi-million dollar property empire Down Under on sale. Pictured is one of the chain’s stores in Poland
Pictured: The Kaufland building site in Prospect in September 2019. The portfolio of properties up for sale in the three states could fetch up to $250million
Kaufland is estimated to have already spent $500million on its Australian business since declaring it was targeting the market in 2017.
The total portfolio of properties in the three states could fetch up to $250million, the Australian Financial Review reported.
‘This is an unprecedented opportunity to secure a national pipeline of prime development sites,’ Colliers International managing director of capital markets John Marasco said.
Of the sites up for sale, there are four are in Melbourne, two in Adelaide and three in Queensland in Brisbane and on the Gold Coast.
Kaufland, whose launch date was pushed back to 2021 from 2019, has announced 200 Australian employees will be affected by the withdrawal.
2,400 jobs were forecast to be created by the launch of nine new stores in Victoria and Queensland this year.
Kaufland Australia Managing Director Julia Kern (pictured left with South Australian premier Steven Marshall at a sod turning ceremony at a Kaufland site in Prospect, northern Adelaide in September) was appointed by the company in May 2018
The chain was expected to be a cross between a supermarket and stores like Target and Kmart, selling groceries as well as hardware such as toys, bikes, sports equipment, electronics and household goods.
Julia Kern, who was appointed as managing director of Kaufland Australia in May 2018, was the driving force behind the supermarket’s launch.
The retailer had bared a striking resemblance to German supermarket Aldi with almost 39,000 more products, evoking fears it would destroy the low-cost store.
Retail consultant Brian Walker previously told Daily Mail Australia they were expecting to see a price war, with Kaufland entering the market with aggressive price cuts.
However, experts are now saying food inflation will likely to continue as a result of Kaufland’s departure.
‘Kaufland’s departure has removed a key risk to this stable market,’ Citi retail analyst Bryan Raymond told the Herald Sun.
Kaufland, which is the fourth largest retailer in the world, was expected to prompt price competition between nation-wide industry leaders Coles and Woolworths
‘We now see no near-term impediment to the constructive pricing environment remaining in place over the medium term.’
And while Kaufland’s may not be good news for consumers looking for cheaper deals, it would be pleasing for competitors Coles and Woolworths.
Coles’ profit margin looks likely to rise from 3.8 per cent this financial year to 4.1 per cent by the year to June 2025, experts are predicting.
Frank Schumann, acting CEO of Kaufland International, apologised to employees for the ‘disruption this decision will cause’.
Construction of the $24million South Australian store in September which was set to create 150 jobs
‘This was not an easy decision for us. We always felt welcome in Australia,’ he said, according to Brisbane Times.
‘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.’
The decision to leave Australia comes after the launch of Kaufland’s $255million distribution centre in Mickleham, in Melbourne’s north, last June.
The 117,000 square metre warehouse was expected to create 600 jobs.
Pictured: Kaufland Australia managing director Julia Kern
Additional Victorian sites included Dandenong, Epping, Chirnside Park, Braybrook, Lyndhurst, Geelong, South Morang, Bendigo, Narre Warren, Warrnambool, Coburg and Pakenham.
The German business celebrated the launch of a $24million South Australian store in September which was set to create 150 jobs.
Kaufland said its investments would be ‘discussed with the relevant parties in coming days’.
The chain’s decision to leave the country could prompt concerns over the state of Australian retail after more than 20 major business went into administration within in the last year.
Analysts have also reported low consumer spending after the bushfire crisis.