Ikea owner buys Brighton shopping mall, its second in the UK

Ikea owner buys Brighton shopping mall, its second in the UK

13 Nov    Finance News, In Business

Ikea’s parent company has bought its second UK shopping mall, in Brighton, for an estimated £145m as part of efforts to bring its furniture stores into city centres.

The world’s largest furniture retailer plans to convert an empty Debenhams site in the south coast city’s Churchill Square centre, about a third of which sits empty, into a new Ikea store which is expected to open within two years.

The acquisition comes almost three years after Ingka Group’s Ingka Centres division bought the Kings Mall in Hammersmith, west London, where it installed an Ikea in a former Debenhams and brought in new tenants including the Library of Things and Lidl to help fill the site, which it renamed Livat.

Ikea is also converting the former Topshop flagship store on London’s Oxford Circus into an outlet. The opening date was recently delayed by a year until autumn 2024.

Hammersmith was the first of Ikea’s latest city store concept globally, after several attempts at developing small local outlets more convenient for those without a car.

It has tested but then closed smaller high street outlets, including one on Tottenham Court Road in central London, as well as large warehouse stores in Tottenham in north London and Coventry in 2020.

Ingka has begun buying up moribund shopping malls to develop city centre destinations as the value of those sites has fallen amid hefty competition from online shopping, which has driven many retailers to slim down the size of their chains. The post-Covid shift to working from home has also hit city centres.

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Churchill Square’s owner, the fund manager Abrdn, had hoped to sell the centre for £250m when it was put on the market last year, but it agreed a deal with Ingka Centres for £145m, according to the property trade journal React News. Ingka did not comment on the price.

This summer Ikea reopened in San Francisco’s former 6X6 “ghost mall” which had lain empty since its completion in 2016. The group is also redeveloping Toronto’s Aura Podium, which formerly housed a branch of Bed, Bath & Beyond, and a complex of shopping centres and offices in Place d’Italie, Paris.

The Brighton site, which will continue trading while the department store is being revamped, includes the Chartwell Court residential tower block and three car parks, two of which are freeholds.

Other retailers already at the site include Apple, Next, H&M and Urban Outfitters.

Cindy Andersen, the managing director of Ingka Centres, said Churchill Square “fits perfectly into our global expansion strategy, allowing us to transform a traditional retail space to a meeting place that is much more than just a place to shop.

“We’ve proven in Hammersmith that traditional shopping centres have a strong future when they are adapted and constantly evolving to match the real needs of local communities.”

She said the group intended to bring together a range of “affordable and sustainable” outlets including retail, restaurants, services and amenities at the site.

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