Ikea eyes South Auckland site

Giant Swedish homewares firm Ikea is bidding to buy 10 hectares of land in south Auckland to build and develop a store, according to sources.

It's understood the business, known for its cheap, design flatpack furniture, has been searching for sites in New Zealand for the past two years.

The Environment Court banned Ikea from being a tenant in Redwood's Albany shopping centre in February because its stores are so popular it feared it would cause traffic problems.

The site Ikea is targeting in Manukau has a market value of $40 million and is next to the TelstraClear Pacific Events Centre.

The centre's managing director Richard Jefferies confirmed there was a potential buyer for the land, but declined to comment whether it was Ikea.

"It is an extremely attractive piece of land, right at the gateway to Auckland, and just off the main motorway."

Ikea in Australia did not respond to questions by the time the Independent went to press.

The company's bid is not without problems. The land the global homewares business wants to buy is the subject of legal action between Manukau City Council and the Counties Manukau Pacific Trust.

The council leases the land to the trust, which manages the events centre. The parties are heading to the High Court next month to seek a declaratory judgement on which party is eligible for the proceeds of any sale.

The legal battle centres on an "umbrella agreement" between the council and trust.

According to the trust's statement of claim to the High Court, it agreed with the council the net proceeds from the land would be granted to the trust to develop the events centre.

The council sold the land to Eldamos, the property arm of The Warehouse for $10.9m in 2003.

Eldamos did not develop the land in the time stipulated under the agreement. At the trust's request the council bought the land back for the original sale price, according to the events centre annual report.

Since 2003, the value of the land has jumped to $40m.

Howick community board member Hamish Stevens said the proceeds would be better spent sorting out crime in the area, basic infrastructure and town centres.

"It's a long drive from Howick to the events centre as well. I don't know many people who do it."

Jefferies said the trust would use any sale proceeds to develop a whitewater kayak stadium, cultural tourism and heritage tours.

An express trust had been formed to hold any sale proceeds, which the Counties Manukau Trust could not profit from.

"You can't give something once, then take it back," said Jefferies.

- © Fairfax NZ News