Property developers have been left "gobsmacked" after a shock announcement from German hypermarket Kaufland that it would leave the Australian market, despite never opening a store and investing over half a billion dollars on property, staff and distribution.

The company, which is owned by $170 billion retailer Schwarz Group, announced on Wednesday it would make an "orderly withdrawal" from Australia, giving no reason other than to say it would focus on its European operations.

German supermarket giant Kaufland has announced it will depart the Australian market.

The company had been set to open as many as 30 stores in Australia and had bought a number of warehouse and retail locations around the country, including a new $255 million distribution centre in Melbourne's north which began construction in June last year.

The state-of-the-art 117,000 square metre facility was expected to generate 600 jobs in the area and was being built by Vaughan constructions on land purchased from private developer MAB Corporation.