ngka Investments will own one-third of 570 Fifth Ave., a 1 million-square-foot building that Extell plans to develop.
Ingka Investments, the investment arm of Ingka Group, which owns most of the world’s Ikea stores, said in a statement that in addition to the preferred stock, it would acquire a one-third stake in a Class A retail and office building being developed by Extell Development Co. on Fifth Avenue. Financial Times. Extell will own the remaining two-thirds.
Extell has been planning for decades and has been looking for an investment partner for the new tower. Bloomberg “We’ve partnered with Ikea and of course they’re very interested in having a big retail space in the city centre,” founder and chairman Gary Barnett told the paper.
The building, the first development on Fifth Avenue in over 60 years, is scheduled to deliver tenants in 2028, but construction has not yet begun. Located at the intersection of the Plaza and Grand Central districts, 570 Fifth Avenue will be a 1 million square foot mixed-use commercial building. IKEA’s new customer meeting point will be located in 80,000 square feet of retail space across two large basement levels with an entrance on the corner of Fifth Avenue. IKEA will have full ownership of the space.
IKEA opened more than 70 meeting points around the world last year to improve “access” for customers in big cities and metropolitan areas, according to the Financial Times, which describes the meeting points as small stores, pop-up stores and planning studios where customers can meet with consultants and order delivery to their homes.
Financial details of the transaction were not disclosed.
The investment marks a new growth strategy for Ingka in the United States and is part of the company’s decision to locate stores closer to residents in urban centers. Earlier this year, IKEA Eight new stores open in the US The investment also underscores a recent trend of retailers such as Prada, Kering and LVMH buying real estate on the iconic Manhattan street over the next three years.
