Ikea ramps up UK property team as it eyes shopping centre acquisitions

Retail Week understands that Ikea has bolstered its UK property team by bringing staff in from the wider business and hopes to purchase the freehold of at least one shopping centre in Greater London and is eyeing others nationwide.

The retailer aims to take advantage of the falling valuations of many shopping centres which it sees as an opportunity to open in more central, convenient locations.

One source familiar with Ikea’s thinking suggested that it may be seeking to emulate the approach Primark took with its new Birmingham store, which opened to great fanfare earlier in the year.

Primark purchased the former Pavilions shopping centre in the city and transformed it into a flagship that launched in April.

Another property source believed that Ikea is considering purchasing multiple UK shopping centres to develop and lease to retailers or even create residential schemes, as well as to trade from itself. That would follow the model Ikea has adopted in Europe, capitalising on its popularity to attract and let space to adjacent retailers.  

A third source said that Ikea was expanding its UK property team by bringing in expertise from its Ingka Centres division, which has spearheaded its shopping centre acquisition programme in Europe.

‘Ambitious growth plans’

An Ikea spokeswoman said: “We’re in a fast-changing retail environment and we want to make sure we continue to be affordable and convenient. Our ambitious growth plans mean that we are focusing on creating a great customer experience, whenever and wherever people need us.

“This includes investing in our online offer and customer services, rebuilding and adapting existing Ikea stores, and evaluating different locations as part of a new city centre approach.”

An Ingka Centres spokeswoman said: ”We recently unveiled our new strategic vision that will see us investing €7.3bn to create new next generation people and planet positive meeting places in Europe, Russia, Asia, North America and Oceania. We are targeting cities with high populations in these regions where we see a need of meeting our customers closer to where they live, work and socialise.”

A move into property deals would also support Ikea’s global strategy of opening large stores in more central locations as well as new-model small branches as it adapts to changing shopping habits.

Late last year, the homewares and furniture giant opened its first smaller-format planning studio on London’s Tottenham Court Road. In February this year, it opened a Greenwich branch which it described as its “most sustainable store”.

In July 2018, the then Ikea UK and Ireland country retail manager Javier Quiñones said the retailer would focus more on city centres to capitalise on “urbanisation and inner-city living trends that continue to dominate the market”.

The retailer has also been working closely with several UK local authorities building flatpack, affordable housing through property development firm BoKlok, which Ikea jointly owns.