Report: Sweden’s IKEA to spend $2.1 bln on expansion in Russia

MOSCOW, Jun 22 (PRIME) -- Swedish furniture retailer IKEA is investing at least $2.1 billion to upgrade and expand its current portfolio of 14 locations across Russia, the Wall Street Journal reported Wednesday.

Russia’s economy may be slumping, but there appears to be a bright spot in the retail sector.

Sweden-based privately-held IKEA Centers Group has built and operates more than 50 shopping centers with furniture retailer IKEA as its anchor tenant in other countries in Europe, Russia and China.

In Russia, they are known as MEGA malls and the vacancy rate of its portfolio is now around 1.4%. The company says its MEGA centers have an average of 200 stores and bring in 275 million visitors a year.

“More retailers want larger space to showcase their products,” said Olga Shevtsova, head of sales and commercial development at IKEA Centers Russia.

IKEA Centers has long-term plans to develop more malls further east in Russia in the next 10 years, but for now the focus is on more modest expansion of its existing premises. The firm plans to first redevelop two malls in Moscow increasing the leasable space for both properties by 15% to 20%.

The new space is targeted at tenants in the fashion, toys, electronics, entertainment and food sectors.

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