Ikea, the Swedish self-assembly furniture retailer, has agreed to take over the former Topshop space at 214 Oxford Street, London W1.

But true to its affordable image, the firm’s investment division has negotiated a keener price than the market anticipated.

Amazon, Nike, JD Sports and Frasers had also expressed an initial interest in the prime location, as had a roll-call of retail-friendly investors including Asif Aziz’s Criterion Capital, Norges Bank Investment Management and Ramsbury Invest, the real estate investment arm of the founder of H&M.

But the deal, said to be agreed at a price of £378M, represents a fall on the £385M under consideration a month ago — and falls far short of repaying the £185M charge that the former Arcadia pension scheme has secured against the building.

Debts secured against the block total £495M, meaning the sale leaves a gap of £117M. Before the coronavirus pandemic in 2019, CBRE suggested a valuation of around £500M.

The deal agreed by new owner Ingka Group’s Ingka Investments shows confidence in the long-term prospects for central London’s prime retail floorspace, but also provides an opportunity to bring Ikea’s celebrated meatball cuisine to London W1.

Ikea is expected to occupy the 90K SF vacated by Topshop. The 238K SF block also houses a 70K SF Nike store and a 4,700 SF Vans store.

The store is unlikely to open before 2023, the Evening Standard reports.

Ikea has seen a surge in online sales, rising 73% in the last financial year, and surging from single figures to approaching a third of total sales. But the Swedish giant remains firmly wedded to bricks-and-mortar retail, lifting its UK portfolio to 23 outlets.