IKEA has announced that it will be investing a projected $407 million to establish and commence business in New Zealand, including the set up of local supply chain services.
The projected $407 million is made up of the cost of the physical IKEA store land acquisition, site development, construction and fit out. The figure includes the cost of creating the digital capabilities required to offer a seamless online shopping experience to New Zealanders. Also included are costs to set up a local supply chain with customs, freight, transport and warehousing.
The investment also includes the cost of recruiting and establishing a strong team of IKEA co-workers to run the retail business. This follows the announcement that the search has begun for the first local hire for IKEA in New Zealand, a People & Culture Manager, which will be the first of approximately 400 jobs which will be created by IKEA in New Zealand.
Mirja Viinanen, CEO and Chief Sustainability Officer IKEA Australia and New Zealand says, “Entering a new market is a significant undertaking. Our investment is a key part of our desire to enter the market in the best way possible and establish our omnichannel retail business in New Zealand for the long term.
“Wherever IKEA operates in the world, we engage local suppliers and people in our business where possible. Already in New Zealand we have forged relationships with a number of exceptional partners, such as Naylor Love, who are involved in the construction of our store at Sylvia Park ahead of its opening in late 2025.”
Work on the 34,000m2 store on the 3.24-hectare site at Sylvia Park, purchased from Kiwi Property for $41.4 million NZD, began in June 2023, led by New Zealand construction company Naylor Love. Construction is progressing well and on track for the IKEA store opening in late 2025, with the store’s steel framing erected in February and the pouring of concrete slabs due to start soon.
The first ever shipment of IKEA product is expected to arrive in New Zealand in May 2025. A key step in supply chain preparations, IKEA leased a 20,000sqm warehouse from Auckland Airport at The Landing Business Park, Mangere in August 2023. This site is being transformed into a purpose-built warehouse, fitted out with innovative technology enabling logistics excellence, vital for the IKEA store and online shopping for the many New Zealanders.
IKEA is also investing heavily in sustainable operations. Upon completion of the Auckland store’s design, IKEA was awarded a 5 Green Star Design & As Built NZv1.0 Design Review Certified Rating by the New Zealand Green Building Council. IKEA Sylvia Park will run on 40% less energy than an operating IKEA store in a similar climate. Initiatives being currently planned for IKEA Sylvia Park include a solar PV rooftop system, sophisticated building insulation, rainwater harvesting, 100% LED lighting and electric vehicle charging for both customers and delivery vehicles.
