THE developer of the Churchill Centre retail precinct at Kilburn's Islington rail yards says Costco's arrival on the site will set it apart from retail centres across the state.

After the US retail giant's announcement last week that it would spend $25 million on a new 14,000sq m warehouse at the northern end of the 24ha precinct, Axiom Properties general manager Paul Rouvray said the new store would attract shoppers from across the city.

"Costco is one of the biggest and one of the best retailers in the world and it will introduce a new way of retail into Adelaide," he said. "Seventy-five per cent of people in metropolitan Adelaide are within 30 minutes of the centre and I think everyone in Adelaide will visit it at some time next year."

The northern component of the Churchill Centre development is being developed by Axiom and its joint venture partner Southern Cross Equity, which last year paid $11.25 million for a 50 per cent stake in the project.

Costco will build its store on 5ha of land leased under a 50-year deal with the joint venture.

The retail coup comes hot on the heels of rival discount retailer Aldi's announcement it would invest about $300 million in up to 50 stores across the state.

However Costco Australia managing director Patrick Noone said the two retailers catered to different markets. "Aldi coming to Adelaide is great for competition and choice and we think it's a great market for Costco to work side by side with Coles and Woolworths," he said.

"But we have brand name products in our buildings. We don't have many no-name brands while Aldi has many of its own brands so that forms a bit of a difference between the two stores."

Construction of the stand-alone Costco store will kick off mid-year, on a site it will share with a $65 million shopping centre comprising a Coles supermarket, Kmart, Coles Petrol outlet, McDonald's restaurant, more than 50 specialty tenancies and 1800 carparks. An opening is planned for April next year.

While there are no firm plans for additional Costco stores in Adelaide, Mr Noone said it was likely any second investment would be made south of the CBD. "Let's get the first one built and see how it goes," he said.

"If it goes really well, we'll build another one and that (southern suburbs) would be the next port of call."

Costco has launched three sites in Australia since 2009 - in Melbourne, Sydney and Canberra. It has recently been given approval for further sites north of Brisbane and in Sydney's south-west, while a second Melbourne store is currently under construction.

Trading on the southern section of Churchill Centre kicked off in 2011 with the opening of a 12,600sq m Bunnings hardware. Axiom later sold the hardware property to Stonebridge Property for $18.8 million - one of four major bulky goods transactions last year. Axiom and Southern Cross are in negotiations with tenants for two additional stages at their development - the only major bulky goods project likely to proceed this year, according to CBRE's latest bulky goods report.

"The likely profile of new construction is likely to be design and construct activity for a single tenant or a small group of four or less tenants," the CBRE report says.

"This is due to the limited number of well-located sites for bulky goods developments. Also developers are finding it very difficult to obtain funding for speculative developments."