Where will Ikea open in Auckland? Costco's arrival sparks speculation on 3 possibilities

Three strong possibilities have emerged for Ikea's opening site in Auckland following Costco's announcement it will launch at Westgate.

The field has been narrowed due to a theory the two multinational retailers feed off each other and therefore like to be positioned reasonably close by.

Yesterday, executives from a number of businesses at Costco's announcement on the corner of Gunton Dr and Maki St, Westgate, speculated about Ikea's location.

"Where there's a Costco, there's often an Ikea right beside it or very nearby," said one executive who did not want to be named. "Have you noticed?"

That hinted at Westgate owner NZ Retail Property Group wanting Ikea to locate on its green fields site of around 53ha, named the Westgate Town Centre, as opposed to the existing longer-established Westgate on the city side of Fred Taylor Dr.

NZ Retail Property Group has made no announcement that it is negotiating with Ikea, however chief executive Campbell Barbour has certainly strongly hinted at the possibility he wants Ikea. He said in December last year that Westgate was ideal for a big store such as Ikea. The green fields site was more than 50ha of which about 20ha is yet to be developed.

"The site is a great location because it's got motorway connections and it's a new metropolitan town centre for Auckland so getting large-scale international activities here like that is an important part of what we're doing, rather than putting them in more stand-alone locations where they are not supported by public transport, infrastructure, other retail activities and services," Barbour said just before Christmas when Ikea's arrival was the subject of speculation.

However, Chris Wilkinson, managing director at First Retail Group, said South Auckland was just as likely.

"We think Ikea will be at Drury to give Kiwi Property the anchor to differentiate it and because of the connections to the Waikato and Bay of Plenty. But there could be a pop-up at Sylvia Park so we think that means Kiwi is close to Ikea and that would put them at Drury."

Asked if his business was talking to Ikea, Clive Mackenzie, Kiwi Property chief executive, said: "We talk to everyone in the market all the time."

Kiwi owns Sylvia Park where it is spending $258m upgrading its offering. It originally planned a $223 million investment, but the business announced last month it would now spend $258m on the Mt Wellington property.

That will give it 19,000sq m and an extra 900 car parks and the extra $35m was due to additional demand, adding more than 1000sq m extra space as well as some design changes.

"The design changes are from an aesthetic point of view in terms of how we provide the finished product, integrating the old and the new," Mackenzie told the Herald on May 21.

READ MORE
• Ikea coming to NZ: Homeware giant's hunt for large site

On January 13 this year, Ikea confirmed that it is coming but its executives would not say exactly when or where it plans to fly the distinctive retail flag.

A $90m investment in a full-service store has been mentioned, so the financial stake Ikea contemplates is significant. It suggests 200 or so jobs could be available in its new store, a fraction of the 200,000 people employed in the broad retail industry.

The brand is hardly rushing to open its doors. The first store, somewhere in Auckland, will be up in running "within a few years". That could be nearly 10 years away.

NZX-listed Kiwi Property Group is planning to build at Drury because the region is expected to grow from about 193,000 people to 353,000 in 20 years' time.

Kiwi owns a national property portfolio valued at $3.2 billion, making it this country's largest commercial landlord.

Homestead Park is its Drury project, developing a green fields site which will incorporate an old farmhouse on a 51h plot where it plans shops, offices, bars and restaurants.

The site is certainly big enough for an Ikea, which could be more than 14,000sq m.

Mackenzie said Kiwi was engaging with the local community on its plans for its site beside the Southern Motorway between Papakura and Pukekohe.