2026-10-10 10:55

Kaufland as a Tenant: A Strong Covenant in a Box Few Others Can Fill

When Mein Real closed its last 49 hypermarkets in March 2024, Kaufland sought up to 23: even the most natural successor, which had taken over more than 100 former Real stores, wanted fewer than half. Kaufland itself is a strong tenant — €36.7 billion of store sales in the year to February 2026, 790 German stores — and wants at least 2,500 m² of sales area on any new site (2026). An investor in a Kaufland store therefore buys the lease term and the strength of the location as much as the covenant.

Key takeaways
• Kaufland runs 790 of its more than 1,600 stores in Germany (2026); with Lidl, the Schwarz Group holds about 25% of German food retail (Bundeskartellamt, 2025 data) and publishes no profit figures.
• Kaufland favours owning its sites: Lebensmittel Zeitung put its property at a book value of about €4.1 billion (2020). Its leases are renewed case by case — early in Seelow in 2026, but not in Fellbach in 2025, where talks with the owner failed.
• Kaufland is a landlord as well as a tenant: it lets 13,700 units totalling more than 1.4 million m² at its sites in eight countries (2026). Where Kaufland itself rents, those lettings can end with its lease.
• Re-letting is the risk to price: Germany has 689 hypermarkets (BNP Paribas Real Estate, 2025). The Bundeskartellamt reviews takeovers store by store; in 2020 Kaufland dropped nine of the 101 Real stores it sought.

Kaufland shares Lidl's owners, scale and silence on profits

Kaufland is the Schwarz Group's hypermarket and large-supermarket chain. The group's companies turned over €185.6 billion in the year to February 2026, recycling and production included, from about 14,500 stores in 33 countries; Kaufland's store sales rose 4.3%. The group is owned through the Dieter Schwarz Foundation and traditionally publishes no profit figures (Börsen-Zeitung, 2019).

Exhibit 1. Kaufland combines group strength with large-format risk: stores from 2,500 m²

Item	Detail
Ownership	Schwarz Group, Neckarsulm, owned through the Dieter Schwarz Foundation; not listed; no public credit rating found
Group revenue	Schwarz Group €185.6 bn; Kaufland store sales €36.7 bn (worldwide, year to February 2026)
German revenue	€24.4 bn incl. VAT (2025, NIQ Trade Dimensions estimate)
Stores	790 in Germany (February 2026); more than 1,600 in 8 countries (2026)
Market share	Schwarz Group (Lidl and Kaufland) about 25% (Bundeskartellamt, 2025 data)
Typical lease signatory	A Kaufland group partnership (GmbH & Co. KG), not the group (our experience)
Formats	Hypermarkets and large supermarkets from 2,500 m² of sales area, from ground-level stores to mixed-use buildings (2026)

The tenant is a group partnership — and often a landlord itself

The commercial register lists numerous numbered partnerships called Kaufland Vertrieb … GmbH & Co. KG, seated in Neckarsulm and some since deleted, alongside separate property companies (2026). In our experience, the tenant named in a Kaufland lease is one of these group companies rather than the group — and that company, not the brand, is the covenant.

Kaufland also lets space: 13,700 units totalling more than 1.4 million m² at its more than 1,600 store sites in eight countries (2026). Where Kaufland is itself a tenant, those lettings depend on its lease. In February 2025 Kaufland announced that its Fellbach store would close in May, after talks with the owner on extending the lease had produced no agreement. A bakery subletting from Kaufland said its own contract would end too (Stuttgarter Zeitung).

Kaufland wants 2,500 m² and prefers to own the ground beneath it

Kaufland publishes its requirements for Germany (2026): a central or peripheral location in towns from about 10,000 residents, and plots from 6,000 m², built or vacant. It looks for planned or existing hypermarket or large-supermarket buildings with sales areas from 2,500 m² and, where possible, planning rights for large-scale food retail. It buys, rents and signs heritable building rights (Erbbaurecht).

Lebensmittel Zeitung has reported a preference for ownership. In 2017 Kaufland was ready to buy sites from landlords to speed up store modernisation, and in 2020 its property had a book value of about €4.1 billion. Kaufland does not publish the share of stores it owns, and it also rents: at the former Real sites it sought in 2024, it would move in as a new tenant (dpa).

In our experience, Kaufland leases are long and indexed

Kaufland does not publish lease terms; the following is Gordon Real Estate Group's experience and is general. Leases follow Kaufland's template, usually for 15 years with tenant options; BNP Paribas Real Estate reports mostly 15-year leases for enlarged food stores (2025). Indexation typically applies only once inflation passes a threshold, and often passes on only part of it. Roof and structure stay with the landlord (Part 10). The tenant's right to sublet matters more than usual, because Kaufland lets space to others at its sites.

Renewal is decided site by site. In September 2026 a Dr. Peters fund reported that Kaufland had extended its lease on about 5,100 m² in Seelow early, to at least March 2033.

Re-letting a hypermarket is the risk to price

The Real break-up showed how narrow the market for large boxes is. Of 276 Real stores, the Bundeskartellamt cleared Kaufland on 22 December 2020 to take up to 92 and Globus 24, after testing each against the area where 90% of its customers live. Kaufland dropped nine of the 101 it had notified.

Successors are scarce. BNP Paribas Real Estate counts 689 hypermarkets in Germany, averaging 7,892 m² of rental area, and 1,300 large supermarkets averaging 3,869 m² (2025). A successor may come from outside food: in Aalen, where Kaufland's lease on 4,000 m² was ended by mutual agreement in 2025, the owner was considering a fashion retailer (Schwäbische, January 2025). Whether the development plan limits a site to food retail decides how wide the field of successors is.

Implications for investors

1. Price the box, not only the covenant. Value the store on what the site would earn with another operator or use, not only on Kaufland's rent.

2. Treat each renewal as a negotiation, not a formality. Some Kaufland leases are extended early, as in Seelow; others end, as in Fellbach and Aalen. The remaining term is the core of the value.

3. Map the income that depends on Kaufland's lease. A subtenant's contract can end with Kaufland's, as the Fellbach bakery expected in 2025; value those shops accordingly.

Before you buy a Kaufland store:
• Which Kaufland company signed — register number, successor if merged — and does a group company stand behind it?
• What do the remaining term, options, indexation, maintenance and special termination clauses say?
• Which shop units depend on Kaufland's head lease, and what happens to them if it ends?
• Who else could run 2,500 m² or more on this site, and would the Bundeskartellamt allow it?
• Does the development plan restrict the site to food retail, and could the building be divided?
• Does Kaufland hold a pre-emption or purchase right over the property?

Sources: Schwarz Group, press release of 11 June 2026; LEBENSMITTEL PRAXIS, 4 May 2026 (NIQ Trade Dimensions estimates) and 28 March 2024; Kaufland, real-estate website, accessed 10 October 2026; Bundeskartellamt, press releases of 22 December 2020 and 28 September 2026; Börsen-Zeitung, 14 May 2019; Lebensmittel Zeitung, 2 June 2017 and 15 May 2020; dpa via FashionUnited, 27 March 2024; Stuttgarter Zeitung, 14 February 2025; Schwäbische, 14 January 2025; Dr. Peters Group, 21 September 2026; commercial register via North Data; BNP Paribas Real Estate, Grocery-Investmentmarkt Deutschland Q4 2025; Gordon Real Estate Group experience.

Photo: Erim Berk Benli / Unsplash

This profile is general information and not investment advice. Company figures are as published by the company or reported in the trade press on the dates stated.

Ilya Gordon