IKEA’s parent company Ingka Group’s investment arm Ingka Investments on Tuesday said it had signed a conditional purchase agreement to acquire a property at 214 Oxford Street (Oxford Circus) in London for £378 million (€446 million).
The investment supports the transformation of Ingka Group’s retail business, bringing IKEA closer to customers by opening new IKEA store formats in city locations, in response to increasing urbanisation and new shopping behaviors, the company said.
The property comprises a total of 22,200 sqm / 239,000 sqft over seven floors, with retail space on six floors. It will host IKEA UK’s second smaller store format and will follow the opening of IKEA Hammersmith later this winter.
Since 2019 Ingka Group has opened stores and shops in major cities such as Tokyo, Madrid, Moscow, Paris and New York as well as planning studios in Vienna, Barcelona, Berlin and Prague.
Krister Mattsson, Managing Director of Ingka Investments, said:
“We are delighted to have signed this agreement for a property on one of Europe’s busiest shopping streets and it represents another opportunity to create a more accessible, affordable and sustainable IKEA for our customers.
“This property offers great potential for retail space, and we firmly believe in the long-term value of the real estate market in London. Ingka Investments continues to target acquisitions of commercial real estate in other major cities where Ingka Group operates to find out how and where we can best meet customer needs. Securing ownership of properties in prime locations instead of leasing will preserve value on a long-term basis.
“This investment also represents our continued commitment to invest in the UK following our recent investments in location technology company what3words and Winnow, a company that works to reduce commercial food waste,” he says.
Peter Jelkeby, Country Retail Manager and Chief Sustainability Officer, IKEA UK & Ireland, said:
“Today we are seeing societal changes that have evolved customer behaviours and the retail industry as a whole. Big global movements in technology, demographics, urbanisation and environmental awareness have caused significant waves of change in the way we live and shop.
“Even though online shopping continues to accelerate at a rapid pace, our physical stores (large and small!), will always be an essential part of the IKEA experience – as places for inspiration and expertise, community and engagement.
“Bringing IKEA to the heart of Oxford Street – one of the most innovative, dynamic and exciting retail destinations in the world – is a direct response to these societal shifts and an exciting step forward in our journey to becoming a more accessible IKEA”, he says.
The new store is planned to open in autumn 2023 and will have a focus on home-furnishing accessories, with the full range available to buy for home delivery.
A conditional purchase contract for the property is now signed and the closing of the acquisition is expected in January.