Ikea Sees A Future For Its Malls In The USA
Retail giant Ikea is planning to expand its shopping mall business in the United States over the next few years, and is looking to buy sites in major American cities.
There are currently 45 Ikea mall properties in Europe and Asia. Ingka Centres is Ikea's mall development and ownership arm, distinct from its stand-alone retail stores, though all of the malls are anchored by Ikea stores. Ingka is in negotiation for urban U.S. sites, with New York, Los Angeles, San Francisco and Chicago prominent on the list, Reuters reports.
"I’d say it’s more a buyer's market than a seller's market currently in the U.S.,” Ingka Managing Director Gerald Groener told Reuters. The company is looking for as many as 45 U.S. properties, such as shuttered department stores or malls to convert.
“Ingka Centres plans to invest €7.3B [$8B] in the coming years, as we move into cities and expand into new markets, creating meeting places," Ingka Centres Expansion & Development Manager Jan Kristensson told Bisnow by email, adding that the growth will include U.S. locations.
"Opening in new markets will be a big part of the company’s plans, as well [as] continuing to grow in China, where we are developing mixed-use projects," Kristensson said.
"We will be targeting cities with high populations in these regions," Kristensson added. "We primarily focus on the acquisition of existing real estate assets and redevelop them into meeting places anchored by an Ikea store and tuned toward local needs."
The U.S. pickings might be good for the Swedish retailer, at least when it comes to former department stores. As many as half of all U.S. department stores will close by 2022, Green Street Advisors predicts, with many closed during the coronavirus pandemic and never to reopen because of department store obsolescence.
Existing Ingka malls vary in size and number of non-Ikea stores. At the 2M SF Livat Beijing, for instance, there are 402 shops. At the 570K SF Outlet Aubonne in France, there are 52 shops.
In January, Ingka acquired an existing mall for the first time, the 290K SF Kings Mall in London, which the company is redeveloping. It will be anchored by a smaller-format Ikea and include 33 shops all together, opening in 2021.
Ingka malls and Ikea stores have closed temporarily because of the pandemic, but now they are reopening. Those Ingka malls in Europe and Asia that have reopened are experiencing fairly strong foot traffic, Chain Store Age reports, as much as 87% of normal traffic in the case of properties in Poland.
Specifically, all Ingka properties in Croatia, the Czech Republic, France, Poland and Switzerland reopened in April, along with some in Germany and China.