The retail store chain may be Dutch in origin, but it is serving as a magnet for other retailers across Australia.

The IKEA (Ingvar Kamprad Elmtaryd Agunnaryd) International Group has drawn in large crowds of shoppers from long distances. According to Deutsche Bank’s Alexi Baker-McLennan, “Retailers located in the vicinity of an IKEA store will see a significant uplift in sales given the significant amount of foot traffic the store draws.”

“In this respect an IKEA can be a 'honey pot' for local retailers although landlords charge for the privilege of co-location,” the bank analyst said. The Swedish furniture retailer will be investing more than $600 million to open six more stores in Australia over the next decade.

Two of these stores, a 37,000sq m store in Sydney's Tempe and a 34,000sq m store in Melbourne's Springvale, will open in 2011. Based on IKEA's 2008 economic impact statement, sales at IKEA’s Tempe store are expected to reach $103.5 million in its first year-- the equivalent of $3000/sq m of retail space.

Baker-McLennan claims the IKEA stores are currently spreading the 'honey pot effect' at Rhodes in Sydney. IKEA country manager David Hood said the chain’s three stores had about seven million visitors in 2009. About half of the visits, he said, resulted in purchases within the store.