The world's second-largest retailer has New Zealand clearance from an arm of the state to make its debut in this country with its first giant store.
The Overseas Investment Office has just announced it has given consent for Costco Wholesale New Zealand to buy land at Massey's Westgate in Auckland where the retailer will open its first store.
Costco, second only to Walmart globally, needed state consent here because the land it is buying is classified as sensitive. It applied to buy a freehold interest in 2.7ha of land at the corner of Maki St and Gunton Dr at Westgate near the Harvey Norman store.
It also needed consent because it plans to establish a business in this country where the expenditure involved exceeded $100m - the land purchase and the development of the giant new store with its fuel station, food court, pharmacy, hearing aid sales centre, etc.
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The Overseas Investment Office has just released the latest group of decisions which included the Costco approval.
Costco Wholesale New Zealand, 98 per cent owned by United States interests, made the application to buy the land from Westgate Town Centre (2017), wholly owned by New Zealand interests - New Zealand Retail Property Group chief Mark Gunton, who the street where Costco is buying the land is named after.
Gunton is the RichLister who founded Westgate and is now developing or selling big plots of land in the new greenfields site of around 58ha to the north of the existing town centre. He also owns the lease to a giant Southland farm.
That newly expanding area has Westgate's Mitre 10, Pak'nSave and new town centre with a library.
"The applicant is ultimately owned by Costco Wholesale Corporation, which operates the Costco global membership retail warehouse business that is one of the largest retailers in the world by total global revenue," the OIO said.
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"The applicant intends to acquire the land to develop, construct, and establish the first Costco membership retail warehouse in New Zealand. The applicant also intends to acquire other land in the vicinity [not subject to OIO consent] to develop a fuel site to complement the warehouse," the office said.
"The benefits to New Zealand include the creation of new jobs involved in the construction and ongoing operation of the warehouse, car park, and fuel station; additional investment involved in the development, added market competition with the introduction of a new retail format into New Zealand, and increased export receipts of New Zealand products to other Costco stores worldwide," the decision said.
Campbell Barbour, NZ Retail Property Group general manager, expects construction to start around October this year. He said the store would be a big drawcard throughout Auckland and beyond and was the equivalent of a very large supermarket or DIY store like Bunnings or Mitre 10.
Costco was now in the resource consent application process with Auckland Council, Barbour said.
The land Costco applied to buy was zoned as sensitive because it was adjacent to Kopupaka Reserve, Barbour said. Work at that parkland had won a major international architecture award.
Costco has opened a new outlet in Perth this month and lines of shoppers formed outside, although the pandemic resulted in the grand opening being scaled back.
Patrick Noone, Costco's Australian and New Zealand chief, came here last winter to announce the retailer opening in this country on the Westgate site. He said Costco already bought products from New Zealand for its Australian warehouse stores where it has 11 big outlets.
Costco is second only to Walmart and its net sales in the year to September 2, 2018 of US$138b ($212b) were bearing down on New Zealand's total national gross domestic product of $293b in the 2018 December year.
Noone said the New Zealand products Costco already sold included blueberries, apples and frozen croissants. But the operation plans to look at buying more New Zealand goods once it has established here, and selling those overseas at its many outlets.