IKEA to invest over $2bn in Russian expansion

By bne IntelliNews June 22, 2016

Despite Russia's slumping economy, its largest shopping centre operator, IKEA Centers Russia, is investing at least $2.1bn to upgrade and expand its current portfolio of 14 locations across the country, the Wall Street Journal reported on June 22.

In Russia, where the shopping centres of Sweden-based IKEA are known as MEGA malls, the vacancy rate of its portfolio is now around 1.4%.

MEGA centres have an average of 200 stores and bring in 275 million visitors a year, IKEA said.

"More retailers want larger space to showcase their products," Olga Shevtsova, head of sales and commercial development at IKEA Centres Russia, was quoted as saying by the newspaper.

IKEA has long-term expansion plans further east in Russia over the next ten years, but currently will focus on more modest expansion of existing premises, including two malls in Moscow. As a result, their leasable space is expected to increase by up to 20%. Tenants in the fashion, toys, electronics, entertainment and food sectors are expected to also grow in the expanded malls.

Two months ago, Russia's Deputy Minister of Industry and Trade Viktor Yevtukhov said IKEA was among foreign companies looking to start production in Russia.

"With regard to IKEA, they are planning to produce up to 40% of their products at our facilities in the near future," he said. "Moreover, IKEA managers told us that they have started to sell abroad flax goods that they purchase [here]."

Meanwhile, IKEA has apparently resolved a land conflict in Khimki outside Moscow, near its first flagship location in Russia. A city court confirmed IKEA's rights to a plot of land on which it built the Khimki Business Park offcice centre a few years ago, Vedomosti daily reported on June 22.

Related Articles

Russia’s central bank reduces key rate in surprise decision

The Central Bank of Russia (CBR) reduced the key lending rate by 0.25 percentage points to 9.75% on March 24, despite broad market expectations of no change this month. The ruble strengthened to a ... more

Ex-Trump aide Manafort reported to be long-term Putin lobbyist

Paul Manafort, US President Donald Trump's former election campaign manager, struck a covert deal with Kremlin-affiliated Russian oligarch Oleg Deripaska in 2006 to promote the interests of President ... more

Russian central bank governor Nabiullina to be nominated for further five-year term

The governor of the Central Bank of Russia (CBR), Elvira Nabiullina, will be nominated for another five-year term, President Vladimir Putin told the country’s top banker on March 22. The nomination ... more

Register here to continue reading this article and 2 more for free or purchase 12 months full website access including the bne Magazine for just $119/year.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

To continue viewing our content you need to complete the registration process.

Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

If you have any questions please contact us at sales@intellinews.com

Subscribe to bne IntelliNews website and magazine

Subscribe to bne IntelliNews website and monthly magazine, the leading source of business, economic and financial news and commentary in emerging markets.

Your subscription includes:
  • Full access to the bne content daily news and features on the website
  • Newsletters direct to your mailbox
  • Print and digital subscription to the monthly bne magazine
  • Digital subscription to the weekly bne newspaper

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

bne IntelliNews
$119 per year

All prices are in US dollars net of applicable taxes.

If you have any questions please contact us at sales@intellinews.com

Register for free to read bne IntelliNews Magazine. You'll receive a free digital subscription.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

IntelliNews Pro offers daily news updates delivered to your inbox and in-depth data reports.
Get the emerging markets newswire that financial professionals trust.

"No day starts for my team without IntelliNews Pro" — UBS

Thank-you for requesting an IntelliNews Pro trial. Our team will be in contact with you shortly.

Dismiss