But the deal would set up A&B to redevelop the prime site earlier if the financially troubled parent company of Daiei in Japan decided to exit the Hawai'i market before the Kaheka store lease expires.

A spokeswoman for Honolulu-based real estate, transportation and agriculture conglomerate A&B cited company policy to not comment on acquisitions until they are completed.

According to more than one person familiar with the deal, A&B has a preliminary agreement to buy the 4-acre site from Japan-based C.E.C. (Hawaii) Inc., though details still need to be negotiated.

Peter Kashiwa, a local attorney representing C.E.C., confirmed that a sale is being negotiated, but said he could not disclose more for confidentiality reasons.

Theresa Chang, a spokeswoman for The Daiei (USA) Inc., the Hawai'i-based subsidiary of Kobe-based chain The Daiei Inc., said local company executives are unaware of a sale and unfamiliar with the store's landlord.

Kashiwa said he could not say what, if any, connections exist between C.E.C. and Daiei in Japan. One person familiar with C.E.C. said it is an investment entity of Daiei founder Isao Nakauchi, who was pressured to resign as Daiei chairman in 2000 but still owns a stake in the retail giant.

According to property records, C.E.C. bought the land a few months after Daiei launched a major expansion in Hawai'i by acquiring three Holiday Mart stores in 1980. The retailer of Japanese-oriented general merchandise and groceries opened its first Hawai'i Daiei store in 1972.

Daiei (USA) officials have said that executives in Japan are committed to maintaining Hawai'i operations, which they say are profitable.

Local real estate experts also note that not much value would be gained by selling Daiei's four Hawai'i stores in Honolulu, Pearl City, Kailua and Waipahu because they are all on leased land.

Still, some retail analysts believe that new competition from Wal-Mart and Palama Super Market, both of which in recent months opened stores near the Kaheka Daiei, may affect Daiei's resolve to keep the flagship store.

The Kaheka store is Daiei's most valuable local outlet, accounting for more than 40 percent of Hawai'i sales.

For A&B, the land under the store is an attractive asset because it would provide land rent revenue as long as the retailer remains. According to terms of Daiei's lease, the rent is scheduled to increase in 2008.

If Daiei were to depart early, A&B could redevelop the site sooner. Real estate experts said the Kaheka Street property, which is ringed by mostly residential high-rises, would be perfect for a condominium complex incorporating retail or other commercial uses.

Any redevelopment options could be expanded if A&B were able to purchase adjacent land leased by Daiei for its parking structure, which is on six parcels totaling roughly 1.5 acres owned by several family trusts.

According to one person familiar with the parking lot property, A&B is exploring a purchase of that site.

The Daiei store site is valued by the city for property tax purposes at $20 million. The adjacent parking lot land has a city-assessed value of about $6 million.