Fairfax Media understands Kaufland,controlled by the giant Schwarz Group in Germany,has negotiated options over two other BWP-owned former Bunnings sites in Melbourne,one in Oakleigh South and the other in the northern suburbs of Epping.

BWP managing director Michael Wedgewood confirmed both properties were under option to sell,but would not comment on the buyer.

“They are subject to confidentiality agreements,” he said.

If the deals come through,they will give Kaufland a strong geographic spread across Melbourne’s growth suburbs and a springboard to grow along Australia’s populous east coast into Sydney and Brisbane.

Kaufland’s aggressive expansion will send shivers down the spines of the nation’s “cosy” Coles and Woolworths grocery duopoly,already under siege from the group’s arch German rival,Aldi,which has amassed large profits from its 500-odd stores.

German customers describe Kaufland’s “hypermarket” model as a cross between a supermarket and a Kmart,a popular one-stop shop with discount prices on both supermarket staples and extras like bikes or car maintenance supplies.

The group is tight-lipped about its property dealings,not shy of doing its own developments,and prefers to purchase target properties in key locations by negotiating directly with vendors. It avoids leasing stores.

Kaufland is likely to take several years before it opens its first store as it grapples with planning approvals across multiple state boundaries and a scarcity of available sites.

It has specific plot requirements between 10,000 and 20,000 square metres with the potential for 200 to 300 car spaces. A typical Bunnings is 15,000 sq m in size. Woolies and Coles stores are around 4500 sq m.

The price Kaufland agreed to pay BWP for its Dandenong site reflects a substantial rise on its $13.3 million book value. BWP is likely to make similar gains from its Epping and Oakleigh assets which have book values of $13.5 million and $18.3 million respectively.

Schwarz Group is led by German billionaire Dieter Schwarz and is one of the world's biggest retailers with $US94.5 billion in retail sales in the 2015/16 financial year.

Its sister company is discount supermarket chain Lidl,Aldi’s arch-rival.

“We are pleased about the high level of interest that Kaufland's property purchases in Australia have created. However,we are currently not in a position to comment,” Kaufland said. CBRE’s agents declined to comment.