The IKEA store operator Ingka Group has come in terms to buy a commercial property on Paris' Rue de Rivoli and is looking for more such acquisitions in other big European cities, the head of the investment arm mentioned.
The earth's biggest furniture brand, known for the giant out-of-town stores, is in a strategy shift towards the inner-city locations and has till now leased such locations.
But Ingka Investments Managing Director Krister Mattsson told Reuters that IKEA, which historically has always owned its store locations, prefers to avoid the hassle of being dependent on other owners. "It is an uncertain market for the time being for retail space but we have a policy that we should own," he said in an interview.
IKEA to Buy Paris Site
"We think that in good locations, in good cities, it's a good long term investment anyway in the long run," he said. Ingka Investments expects to close the 130 million euro ($146 million) Rue de Rivoli deal later this year. Mattsson said the IKEA store due to open in spring 2021 will test a slightly new format showcasing more accessories and decorative items, and less furniture than the store that opened in 2019 in the nearby la Madeleine area.
Other prime locations in main cities in Europe are on the cards. "We are reviewing some cities in Europe for the time being where we could consider to invest," he said. "We are looking at a lot of countries, Germany is one of them." Ingka Investments is part of Ingka Group which owns most IKEA stores worldwide. Ingka Group's shopping malls arm, Ingka Centres, is also on hunting for inner-city properties and inked its such first such deal this year in London.
(With agency inputs)