NZX-listed multibillion-dollar landlord sold Sylvia Park land for Ikea to establish here and now plans to sell land at Drury for Costco Wholesale’s second NZ store.
On December 4, Ikea plans to open its debut New Zealand store beside Sylvia Park.
Today, Kiwi Property Group has struck a second banger of a deal to sell land to Costco at Drury.
Unlike Costco Wholesale Westgate, the new South Auckland Costco will be able to offer alcohol – a key part of its appeal globally.
While we witness the demise of department stores, these big-box single-brand global retailers are increasingly drawn here.
Finance Minister Nicola Willis said today that Costco Wholesale Westgate has 250,000 members and employs hundreds of staff.
News that Costco was planning to open a second New Zealand store in South Auckland was great news for Kiwi shoppers, she said.
Costco’s West Auckland store had already improved competitive dynamics in that local area and created a new export pathway for several New Zealand food suppliers.
Kiwi’s land pitches have great appeal. Land at Sylvia Park and Drury are ideal for Ikea and Costco: Flat, close to motorways, ample parking able to be provided – and in Auckland.
And Drury is like Westgate – a greenfields site, never built on, ex-farmland, little chance of land contamination from previous uses and no demolition of existing buildings needed.
Naylor Love built Ikea at Sylvia Park, while Haydn & Rollett built Costco Wholesale Westgate.
Who wins the contract to build what could be a 1.4ha store and neighbouring fuel station at Drury will be of great interest to the construction sector.
Westgate was somewhat unusual for Costco in that the fuel station is across the road, not beside the store.
Car parking isn’t on the flat, but above the shop.
Overseas, Costco sells alcohol from its huge stores but not out west.
The Trusts license alcohol sales in that area.
But Costco Wholesale will be able to sell alcohol at Drury because it is not a trust area.
Precisely when the Drury store will open is yet to be announced.
Christchurch was tipped to get New Zealand’s second Costco, potentially at Rolleston.
Patrick Noone, former Costco Wholesale Australia and New Zealand country manager, said before he left that the business wouldn’t stop in New Zealand at one store.
Christchurch was possibly next on the list for a Costco “but it depends on how it works out here”, he said in April 2022.
Selwyn District Council granted resource consent to an associate of Philip and Tim Carter’s business on 6.3ha for a Costco on a Rolleston site.
Tim Harris, the council’s environmental services group manager, said the consent was granted to Rolleston Industrial Holdings to allow the construction and operation of a Costco.
“For clarity, the consent was sought by and granted to the landowner and not Costco,” Harris told the Herald three years ago.
Little has been said lately about Christchurch getting Costco.
Costco’s latest accounts showed it has come close to breaking even in its second full financial year in New Zealand after boosting revenue by $20 million.
For the 52 weeks ended September 1, 2024, Costco made total sales revenue of $361.5m, up by 6% compared to 2023’s $341m in revenue. It had a gross profit margin of 9.06%.
Net profit before tax was $833,000, a turnaround from its net loss before tax in 2023 of $20.5m.
Income tax expenses of $1.76m meant it reported a total comprehensive loss of $929,000.
It paid salary and benefit costs of $20.6m in 2023 but that fell to $16.5m in 2024.
The site Costco plans to buy will be beside the Auckland motorway and is in an area getting a new train station.
This area is due to get about 60,000 people, a new town centre, possibly three schools and a hospital.
Snaring Costco is Kiwi’s second big announcement this week. On Monday, it said it had struck a $90m deal to sell its Sylvia Park Lifestyle to a new large-format retail fund to be established by Mackersy Property.
Kiwi has already bought half of Mackersy last November.
The company has further sold 1.2ha of Drury land to Foodstuffs, which a spokeswoman said today “reflects growing momentum there”.
The commitment of two major brands underscores the strategic value of Auckland’s newest metropolitan town centre, she said.
Additional land designated for sale for large-format retail is also at an advanced state, with future announcements to come.
“While key sites have been allocated for large-format retail sales, Kiwi Property intends to retain much of its 53ha landholding to deliver a vibrant mixed-use precinct featuring retail, entertainment, hospitality, residential, office, medical, and community spaces,” she said.
And in yet further good news, stage one and stage two of Kiwi Property’s Drury development won fast-track approval on Friday.
Anne Gibson has been the Herald‘s property editor for 25 years, written books and covered property extensively here and overseas.
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