The Australian retailer moved out of its premises in the Meridian Mall early last year citing concerns about required seismic strengthening.
Otago Land Group Limited was granted consent by the Dunedin City Council in September last year allowing Kmart to operate at the former Smiths City site in Andersons Bay Rd.
It was planned Kmart would be there for four years, while it searched for a permanent site.
But it has not moved in, as yet.
Rumours have been swirling that the Andersons Bay site could be redeveloped into something similar to Kmart’s premises in Invercargill — a two-storey complex with car parking and other retail and hospitality outlets.
The site is owned by Otago Land Group Ltd.
When contacted recently, group owner Martin Dippie said he had no news on developments, but assured there were plans under way.
Dunedin City Council chief executive Sandy Graham told a public meeting in South Dunedin in August that "something exciting" was going into the site.
Asked afterwards to expand on her comments, she declined.
A source told the Otago Daily Times the new owners of the Meridian Mall, The Icon Group, had been trying to get Kmart to return to the centre after seismic strengthening work had been completed.
Smiths City moved into Kmart’s former site in the mall in September last year but would not say how long its lease agreement was.
When contacted yesterday, Smiths City managing director Tony Allison said the retailer only had a short-term agreement with the Meridian Mall but was looking to make it a longer-term lease.
The Icon Group head of asset management Paul Tanday said, in a recent email to the ODT, it would "love to welcome" Kmart back into the centre.
"However we are happy to report that as a result of this work we are currently in negotiations with another major New Zealand retailer for the space vacated by Kmart which would also be a great result for the centre," he said.
The group was also talking to multiple international and national retailers who previously were unable to engage with it due to the seismic issue, Mr Tanday said.
Kmart has not responded to several requests for comments.
