Where will IKEA go?

Okay the worst secret in history is out: IKEA is coming to Auckland AND Christchurch (as well as other locations). However, we do not know the location of their concept store (their famous iconic big blue stores that are over 25,000m2 (The Warehouse are often 5-7,000m2 as a comparison)) yet.

There is still lots going on with IKEA but here are some key facts and speculation (note: they can go out of date quickly as IKEA continue working on fine details):

• IKEA are looking at establishing their iconic blue stores in Auckland, then Christchurch followed by other cities and large towns
• IKEA have no land here in New Zealand as of yet. While IKEA typically owns the land they build on (like McDonalds and Wendys) given regulatory issues (mainly the Unitary Plan) the path of least resistance could be to lease from an existing retailer like NZ Retail Property Group (Westgate/NorWest (Kiwi own the older Westgate Centre as well as Sylvia Park)) or Scentre (Westfield) (Albany or Manukau). Remember IKEA have tried here before and got burnt in the Environment Court
• Speaking of IKEA and the Environment Court, IKEA have tried in New Zealand before and got burnt by the Resource Management Act and the Environment Court in 2008 (see: IKEA no closer despite Facebook fans). Since then the Super City and Auckland Council has formed with the Auckland Plan and Unitary Plan setting out very clear expectations on development. In theory the Unitary Plan is a tougher planning regime towards Big Box retail to the point of outright hostile
• This leads to speculation of where IKEA can go and so far there are three sites being worked through in Auckland. However, each has a limitation:
  • A move into a Metropolitan Centre (Albany, Westgate and Manukau) boxes the store size in. However, given help from Government and Panuku and issues with Plan Changes (see next point) again IKEA could go for path of least resistance and go with a Metro Centre
  • Big Box on a Future Urban Zone site like Drury. BUT and this is a massive BUT to do this any Future Urban Zone must become a live urban zone. To do this a Private or Public Plan Change is needed. Any Plan Changes MUST go to the Council Planning Committee for an approval to start the change process. The process can be rejected outright or once open the public can submit and the process is open to Environment and High Court appeals. Private Plan Changes (so private sector led) can be bogged down for years while Public Plan Changes (lead by Council) can be done faster although does Council want to be subsidising a multinational retailer?
  • Where is the Distribution Centre or DC Plan going? That one has pundits stating Wiri or State Highway 20B is the choice given large tracts of industrial land that is blank while being close to motorways and rail lines to distribute the goods to other stores
• IKEA have said they are getting help from the New Zealand Government to handle traffic and infrastructure issues. Given IKEA got burnt last time and our Unitary Plan is hostile to traffic inducing big box retail development I wonder what Ministers Twyford and Jones will be thinking about this
• A pop-up store will be established before the Big Box store is open
• SWEDISH MEATBALLS ARE COMING
• IKEA do have 5000m2 Metro Class stores like in Poland (There Could Be a Small IKEA Store Around the Corner in Your Future). Okay not the big 25,000-30,000m2 store but a Metro class IKEA would meet little resistance from our Planning Regime given it can be easily blended into an existing Mall site (Albany, Westgate or Manukau). Don’t worry you still get the meatballs
• As I noted above we are three years away from IKEA making its presence known so lots to happen yet.

As I said earlier, no location yet and a lot of work to do. We are going to have to wait a bit longer for the Big Blue Box and those Swedish Meatballs!