IKEA’s Ingka Investments to buy city-centre retail property in European cities

IKEA’s Ingka Investments is in talks to buy commercial property in prime locations in several big European cities after it finalised its first-ever such acquisition last month. The investment arm of Ingka Group, which owns most IKEA stores, is pushing into the real estate market as part of IKEA’s shift towards big city-centres from out-of-town. So far, such locations are leased.  Scouting for city-centre retail property more or less ready to house IKEA stores across Europe’s main cities, Ingka Investments’ first deal was in Paris’ Rue de Rivoli. Inkga Investments is pushing ahead with the new strategy despite the wider retail market uncertainty caused by the pandemic. Despite the exodus from high streets prompted by the coronavirus, price tags for the kind of properties that Ingka Investments is hunting for have not tumbled. Besides good space for the IKEA store, buildings could also include other retail, office and even residential space, and Ingka Group would take over as landlord. The decision to build up a real estate portfolio stems from privately held IKEA’s long-standing strategy not to rent. Acquisitions, as IKEA’s other investments, are self-financed. Separately, Ingka Group’s malls arm Ingka Centres is also shopping for inner-city property, albeit targeting bigger developments aimed at housing IKEA-store anchored malls. Scouting Europe, Asia and the United States, it has so far made two such acquisitions.