Dive Brief:
- The investment arm of Ingka Group — the largest Ikea retailer — on Monday announced plans for a mixed-use commercial building in Manhattan, per a press release. The development company said the 1 million-square-foot office and retail tower is the first office tower to begin construction in New York City post pandemic. It will be part of Ingka Investments’ real estate portfolio.
- The corner entrance at 570 Fifth Avenue, will be used for a two-level Ikea customer meeting point. The customer space is 80,000 square feet.
- Ingka Group said it wants to focus its retail formats on city centers to adapt “to urban growth and changing consumer shopping preference.”
Dive Insight:
Since 2019, Ingka Group has opened stores in Tokyo, Madrid, Paris and London as well as planning studios in Vienna, Barcelona, Berlin and Prague. The company said its investment contributes to Ingka Group’s long-term strategy to enhance its retail presence in city centers.
“We are excited to share the news of this major investment that boosts our growth strategy across the U.S., a vital market for Ingka Group,” Peter van der Poel, managing director at Ingka Investments, said in a statement. “Investing in Fifth Avenue goes beyond just growing our footprint; it’s about changing the way we engage with consumers and playing a part in creating strong, sustainable economies and business communities.”
The tower project will target a minimum LEED Gold certification, part of Ingka Group’s commitment to sustainability and operating low-carbon, the company said. Ingka Investments holds a one-third stake in the investment, preferred equity components and full ownership of the customer retail space. Developed by Extell Development Company, the building is scheduled for tenant delivery in 2028. Extell holds a two-thirds stake.
Among other investments, Ingka Investments announced its participation in a Series B funding round for Waabi, a company that uses generative AI self-driving tech. The investment will allow Waabi to deploy fully driverless autonomous trucks in 2025.
The company has continued to expand beyond its familiar, large locations. In May, Chief Operating Officer and Global Head of Ikea Retail at Ingka Group Tolga Öncü said that eight out of 10 Ikea customers start their shopping experience through digital channels, such as its website or app, before coming in-store to purchase. Ikea is also working to grow its other formats as well. Earlier this year, Ikea announced plans for four more plan-and-order stores with pick-up U.S. locations.