for-phone-onlyfor-tablet-portrait-upfor-tablet-landscape-upfor-desktop-upfor-wide-desktop-up

IKEA agrees to buy Paris site as part of inner-city push

STOCKHOLM (Reuters) - IKEA store operator Ingka Group has agreed to buy a commercial property on Paris’ Rue de Rivoli and is looking for more such acquisitions in other large European cities, the head of its investment arm said.

FILE PHOTO: People queue outside the Swedish furniture giant IKEA store before its opening, the company's first store in the heart of Paris, France, May 6, 2019. REUTERS/Charles Platiau/File Photo

The world’s biggest furniture brand, known for its giant out-of-town stores, is in a strategy shift towards inner-city locations and has so far 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.

“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.

($1 = 0.8928 euros)

Reporting by Anna Ringstrom; editing by Jason Neely

for-phone-onlyfor-tablet-portrait-upfor-tablet-landscape-upfor-desktop-upfor-wide-desktop-up