IKEA: Finally, On Its Way

Swedish Flatpacker confirms exploring New Zealand opportunities

In 2016 I wrote this: IKEA Finally on the Way?. Two and a half years later it seems that question has been answered:

IKEA to open in New Zealand

Thursday, 20 December 2018, 9:17 am
Press Release: IKEA

Inter IKEA Systems B.V. is today announcing its intentions to grant the Ingka Group exclusive rights to explore expansion opportunities in New Zealand.

The franchisee rights to a new country is given by Inter IKEA Systems through profound market studies. Today IKEA reaches 1.2 billion customers in more than 50 markets through a combination of IKEA stores, ecommerce and pick-up and order points. They are operated by 11 IKEA franchisees, who are authorised to market and sell the IKEA product range and operate IKEA stores and other sales channels.

“We are happy to meet the wish from many people for IKEA to open in New Zealand and we aim to make IKEA fully accessible, including stores and ecommerce. We see this as a long-term commitment and investment in New Zealand, building relationships with customers, suppliers and future co-workers”, says Tolga Öncü, Retail Operations Manager, Ingka Group.

Inter IKEA Systems, the world wide IKEA franchisor and owner of the IKEA Concept, is always exploring opportunities to reach more of the many people and through expansion be more accessible.

“Ingka Group has a lot of experience operating the IKEA business across the Asia Pacific and other markets and we are very excited to bring IKEA to New Zealand together with them. Together we’ll make IKEA a loved and meaningful brand for the people in New Zealand”, says Jon Abrahamsson Ring, CEO of Inter IKEA Systems.

Ingka Group currently operates the IKEA business in 30 markets around the world. This includes ecommerce, 367 stores and other sales channels.

In the beginning of 2019 Ingka Group will start sharing more information about their future operations in New Zealand.

About IKEA
IKEA offers well-designed, functional and affordable, high-quality home furnishing, produced with care for people and the environment. There are several companies with different owners, working under the IKEA Brand, all sharing the same vision: to create a better everyday life for the many people. IKEA was founded in Sweden in 1943.

Inter IKEA Systems
Inter IKEA Systems B.V. is the owner of the IKEA Concept and the worldwide IKEA franchisor. It develops and offers the IKEA Concept to IKEA franchisees worldwide, enabling the long-term fulfilment of the IKEA business idea.

Ingka Group
Ingka Group (Ingka Holding B.V. and its controlled entities) is one of 11 different groups of companies that own and operate IKEA sales channels under franchise agreements with Inter IKEA Systems B.V. Ingka Group has three business areas: IKEA Retail, Ingka Investments and Ingka Centres. It is the world’s largest home furnishing retailer operating 367 IKEA stores in 30 markets. These IKEA stores had 838 million visits during FY18 and 2.35 billion visits www.IKEA.com. Ingka Group operates business under the IKEA vision, to create a better everyday life for the many people by offering a wide range of well-designed, functional home furnishing products at prices so low that as many people as possible will be able to afford them.

Source: Scoop

Manukau; Perfect Location

Also in 2016 in the then anticipation I wrote where the perfect spot for an IKEA would be. Yes it was Manukau: IKEA, Apartments and a Park All-in-One? France Was Able to Do It

I will post that 2015 and 2016 posts again on why, how, and the path it should take as an integrated development:

IKEA, Apartments and a Park All-in-One? France Was Able to Do It

Written by Ben Ross – Talking Auckland

France and IKEA show how to do a mixed development

In October last year I floated the idea of IKEA in Manukau City Centre as part of redeveloping Manukau with Panuku Development Auckland’s Transform Manukau program.

I will repost the entire post further down but in the meantime IKEA in France show how to do a mixed use development Manukau needs:

As it does show what imagination can do to get big retail, apartments, green park space and even probably small retail on the ground floor of the surrounding apartments. Time for Panuku and our Auckland Design Champion to step up to the plate and start making this all happen quickly (please).

Meantime from Octoer 2015

IKEA, Auckland and Panuku @DevelopmentAKL. Where To Put an IKEA? #AKLPols

Written by Ben Ross – Talking Auckland

Unitary Plan Rules do restrict placement options

Debate about IKEA (amongst others) coming to New Zealand and especially Auckland has flared up again if this Stuff article was anything to go by:

Ikea, Aldi & Zara: Big brands keeping Kiwis waiting

TAO LIN. Last updated 11:07, October 13 2015

Topshop was certainly a popular addition to Auckland’s retail offering. So should more international brands be hitting our streets? 

Big brands like Tiffany & Co and H&M announced this year they would be joining a growing list of in-demand international companies setting up shop in New Zealand.

But what about those that seem to have turned a blind eye to their Kiwi fans?

……

IKEA

There have been rumours for years that Swedish company Ikea could be coming to New Zealand but it continues to disappoint Kiwi furniture lovers.

The Scandinavian furniture company is famous for its low cost trendy designs, do-it-yourself assembly and forever keeping Kiwis on their toes as to when they may be opening here.

Rumours about Ikea setting up a physical store in New Zealand have been floating around for years, with the latest being an announcement at the end of last year that the company may start taking internet orders and ship to New Zealand.

It was understood then that Ikea had looked at several locations for a store but were having trouble finding the right one as it needed to be both large and have good links to transport.

A Facebook fanpage dedicated to bringing Ikea to New Zealand expressed disappointment that the new NorthWest Shopping Centre in Auckland did not come with an Ikea.

Many of the page’s more than 17,700 followers took to their keyboards to lament “Why oh why” Ikea was not coming and telling the company to “hurry up and come to NZ!!”

It is a different story across the ditch, with Ikea Australia country manager David Hood unveiling a plan in July to increase store numbers from eight to about 22 over the next few years.

For now, Kiwi furniture lovers plagued with FOMO (fear of missing out) will just have to buy Ikea products from My Flat Pack, Zoomly and some other furniture retailers.

……..

Source: http://www.stuff.co.nz/business/industries/72911217/Ikea-Aldi-Zara-Big-brands-keeping-Kiwis-waiting

I believe not long ago IKEA were looking at a Mt Wellington site however, the traffic generation and management ran afoul of the current Auckland City Isthmus legacy rules and killed off any establish attempts.

That said the Unitary Plan rules which go live next year will also be technically restricting to where IKEA can as well given the Council is following a Centres=Plus policy with business and retail. Meaning the City Centre and Metropolitan Centres would be preferential for larger retailers (seeming I am talking IKEA) with the General Business Zone, and Identified Growth Corridors taking any overflow as a pressure relief situation. Light Industry zones would as currently proposed out of the question for IKEA to establish in as well given what Council wants the industrial zones for.

So where to establish an IKEA?

The Metropolitan Centres of which there are 10 would be the most logical place to comply with the Centres-Plus focus of the Unitary Plan. Now Westgate Metropolitan Centre has been touted given it is in the middle of no-where at the moment. I am going to leave Westgate alone for now but remember for an IKEA to establish in a Metropolitan Centre both roads AND public transport need to be adequate.

If IKEA are looking for Metropolitan Centre that has a very large catchment and served adequately by public transport and roads then only two come to mind straight off the bat. Albany and Manukau City Centre, both Metropolitan Centres and both as proposed Super Metropolitan Centres (per my submission to the Unitary Plan). Given Albany and Manukau (and the reason why I push for them to be Super Metros) have both good road and public transport access AND sub-regional, regional and inter-regional catchments establish IKEAs in both would seem as Mr Spock would put it ‘logical.’

However, Albany has issues of land ownership fragmentation that Development Auckland, IKEA and existing landowners at Albany would need to sort for an IKEA to establish. This is because IKEA need around 16,000 metres square of floor space minimum or 20,000m2 for optimum conditions. This is something Albany does not have without strong intervention yet. Intervention that will not be happening any time soon looking at this: Panuku Development Auckland’s Big Urban Renewal Development Program #BetterAuckland.

But if you look at that same report Manukau is at the top of the list for Development Auckland intervention (urban renewal) and Council owns still a lot of land in the Manukau City Centre – Super Metropolitan Centre area.

Manukau development sites Land owned by Auckland Council
Manukau development sites (including all of Lot 59)
Land owned by Auckland Council

That is Council owned land (managed by Development Auckland) inside the Manukau (Super) Metropolitan Centre.

So we are looking at a 20,000 square metre IKEA and IKEAs like going multi-level if they are in Centres rather than paddocks.

Okay time to zoom in on some of the larger land holdings in Manukau City Centre owned by Council:

Manukau Mall East Extensions Overview MK2
Manukau Mall East Extensions Overview MK2

And closer up

Manukau Mall East Extensions MK2
Manukau Mall East Extensions MK2

How it works is the following:

  • Car parks and land is owned by the Council and leased back to Scentre who own the mall to the left.
  • The two light Cyan parcels are there for two large format retailers
  • The smaller northern parcel is 5,800m2 and ideally Pak n Save would relocate here
  • The larger 8,700m2 piece is where a two or three storey IKEA would go giving a maximum floor space of 26,000m2
  • Car parking is multi-level under the stores
  • Blue is small retailers surrounding bigger retailers to avoid triggering Blank Wall provisions in the Unitary Plan
  • Red is where I had placed a Hotel or Office complex
  • Green is an arcade connecting the mall to the new retailers and Great South Road
  • Buses and Trains are at the Manukau Interchange about 700 metres to the west although further bus stops would be on Ronwood Avenue to the north and Manukau Station Road to the south (Also as of 2018 the Airport to Botany stage 1 will be operational from 2021)
  • The Motorway interchanges are the following:
    • Te Irirangi Drive
    • Manukau State Highway 1 Interchange
    • Manukau State Highway 20 – Lambie Drive Interchange
  • Wiri Heavy Industry Complex is about two kilometres to the west and south west and ideal for IKEA distribution plants.
  • If IKEA and Council are ambitious extra levels for more retailing, office or even apartments could be built over the IKEA store.
  • Manukau City Centre currently has an Auckland catchment servicing 545,000 people as of 2013. This does not include the northern Waikato.3
Manukau City Centre Area
Manukau City Centre Area

Panuku Development Auckland?

As noted here: Panuku Development Auckland’s Big Urban Renewal Development Program #BetterAuckland Development Auckland and the Auckland Development Committee are getting ready to whittle down from nine to three urban areas of Auckland for Type 1 intervention. Type 1 being like Waterfront Auckland overseeing Wynyard Quarter’s renewal (long-term, Council public works, and public-private partnerships with residential and commercial development).

Manukau is at the top of that list as seen below:

Panuku Development Auckland Type 1 short list Source: Auckland Council
Panuku Development Auckland Type 1 short list
Source: Auckland Council

The meaning of the score types can be seen in the respective blog post.

Note the following high individual score points for Manukau:

  • Community
    • Community Readiness
    • Community Facilities
    • Deprivation Index
    • Maori Wellbeing
  • Capital Complexity
    • Deliverablity
    • Investment
  • Land and Influence
    • Council Owned Opportunities
    • Site Fragmentation
    • Partnership
  • Scale
    • Capacity (redevelopment floor space)
    • Accessibility to cars or public transport

As far as I see it if Panuku Development Auckland, Otara-Papatoetoe Local Board, and the Auckland Development Committee were to engage in a Waterfront Auckland style development partnership that would also satisfy The Southern Initiative requirements on employment and Maori wellbeing through employment and economic output*, then a possible partnership with IKEA into Manukau City Centre might be the key to unlock Manukau even further.

*Economic output (in an area that has a high Maori population base) not only through direct training and employment with IKEA Manukau, but also wider effects such as employment through an IKEA distribution plant in Wiri, logistics movements of the freight for IKEA, and maybe manufacturing potential if IKEA are “encouraged” to also stock NZ manufactured goods.

And if IKEA were good they would do home delivery (for a fee) which means if I caught the train from Papakura to Manukau (hopefully via the South Link) then I could walk to IKEA, browse, purchase goods and then have it delivered to my home while I continue shopping elsewhere in Manukau before taking the train home and not giving two perverbal monkeys about traffic and parking ^_^ . Win for me, win for IKEA, win for Manukau, win for the well transit system.

Ikea: https://www.brandwatch.com/wp-content/uploads/2014/12/ikea3.jpg
Ikea: https://www.brandwatch.com/wp-content/uploads/2014/12/ikea3.jpg

……..

Source: https://voakl.net/2015/10/13/ikea-auckland-and-panuku-developmentakl-where-to-put-an-ikea-aklpols/

Thoughts?

Of course since those posts in 2015 and 2016 a lot has evolved in Manukau. Manukau is a Transform urban regeneration program under Panuku Development Auckland with several developments either done or under way. In regards to future development there is blocks of land on the Davis Avenue side of Manukau that are open to the market for development of residential, office and small retail that would boost the IKEA really well too.

First blocks of land to be developed via Panuku and the market.

And of course we now have Airport to Botany Stage 1 (Airport to Manukau) confirmed by Auckland Transport with that set to be operational by 2021. So you could catch a train to Puhinui then a bus (for now until Light Rail is built) to Manukau to do your IKEA shopping with no fuss looking for car parks.

The Southern Airport Line 2018 – Airport to Manukau via Puhinui Station
The Southern Airport Line (Yellow) with LRT stations (red), potential central Manukau detour, bus routes and Manukau Bus/Rail Station

But for now we wait on location(s)!

Ikea: https://www.brandwatch.com/wp-content/uploads/2014/12/ikea3.jpg

4 thoughts on “IKEA: Finally, On Its Way

  1. I completely agree regarding that site being the most ideal within Manukau. Would love to see a well integrated urban Ikea, but I’d force them to do free delivery as part of the resource consent to reduce driving to the site….

    I think we are going to end up with it in Drury, this isn’t necessarily a bad thing as long as it is close to one of the train stations and the building is integrated well.

  2. The comparison diagram weight Market to quite low. I questioned this weighting system.

    In fact market could be the most important factor as people living in far north and far west will miss out. Effectively cutting a big deal of sales potential.

    1. They do not have the population mass compared to the South, Waikato and Tauranga.
      565,000 living in South Auckland making it the largest sub region in Auckland (as well as the fastest at 30% over the next 30 years), plus Hamilton and its surrounds, then we have Tauranga as well. Both a decent size cities that would come north.

      Then we have the question of where the Distribution Centre would go. Given both Ports of Auckland and Tauranga the Metro Port site in Southdown or PoAL Wiri site are options.

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