Ikea to build Shang­hai mall

$1.2b shop­ping pro­ject com­pany’s big­gest, ex­pected to open by the end of 2022

China Daily (Hong Kong) - - BUSINESS - By SHI JING in Shang­hai shi­[email protected]­nadaily.com.cn

Ikea, the Scan­di­na­vian-based fur­ni­ture re­tailer, an­nounced on Thurs­day its big­gest in­vest­ment yet: an 8 bil­lion yuan ($1.2 bil­lion) shop­ping mall to be built in Shang­hai.

The new pro­ject, to be lo­cated ad­ja­cent to Hongqiao In­ter­na­tional Air­port in the west­ern part of the city, will op­er­ate un­der the brand Li­vat, and is ex­pected to open at the end of 2022.

The com­plex will cover a to­tal area of 430,000 square me­ters when com­plete, among which 120,000 sq m will be devoted to over 300 re­tail­ers for cloth­ing, cater­ing, en­ter­tain­ment, ed­u­ca­tion and sports.

The Swedish com­pany’s fur­ni­ture store will nat­u­rally be in­cluded in the new pro­ject. How­ever, it will aim to take the com­pany in new di­rec­tion, fea­tur­ing less ware­hous­ing and in­stead re­ly­ing more on dig­i­tal tools.

Ac­cord­ing to Ding Hui, pres­i­dent of Ikea Cen­ters China, one rule for the Shang­hai pro­ject is that the shop­ping area should only take up less than 50 per­cent of the to­tal space. The rest will be devoted to other types of busi­ness, like zoos or small-sized race­track for horses.

The pro­ject will also fea­ture Ikea’s first Grade A of­fice, with a mod­ern of­fice cover­ing 60,000 square me­ters and styled us­ing fur­ni­ture of its own.

They will also be de­signed with co-work­ing in mind, in light of the sec­tor’s big growth in re­cent years. Ikea is still de­cid­ing whether to op­er­ate the of­fices on its own or co-op­er­ate with qual­i­fied third-party prop­erty man­age­ment com­pa­nies, said Ding, adding that the firm hoped the space will hope­fully at­tract more com­pa­nies from North Europe.

Upon com­ple­tion, the com­plex will sup­port about 3,000 jobs, mak­ing it Ikea’s big­gest lo­ca­tion ex­clud­ing its head­quar­ters in Swe­den.

Apart from Shang­hai, Ikea plans to build an­other two new Li­vat projects in Chang­sha, Hu­nan prov­ince, and Xi’an, Shaanxi prov­ince, which are sched­uled to open in 2020 and 2022.

The new pro­ject, the largest in Ikea’s 75-year his­tory, comes as the brand is un­der­go­ing a strate­gic trans­for­ma­tion. Ac­cord­ing to its CEO Jes­per Brodin, the com­pany will in­te­grate full dig­i­tal solutions in all coun­tries, and move away from the out-of-town stores to more in-city cen­ters.

Ding, who over­sees Ikea’s Chi­nese shop­ping cen­ters, said the firm is look­ing to bring small­er­sized cen­ters to the coun­try. For the Li­vat brand, Ikea will also in­tro­duce some smaller foot­print com­plexes to test the wa­ters in China.

Ikea first in­tro­duced re­tail brand Li­vat in China in 2009. So far, three Li­vat projects have been built — in Bei­jing; Wuxi, Jiangsu prov­ince; and Wuhan, Hubei prov­ince. The three have a com­bined leas­ing area of 530,000 sq m, and had a to­tal in­vest­ment of more than 10 bil­lion yuan.

PRO­VIDED TO CHINA DAILY

Pedes­tri­ans walk past an Ikea cen­ter in Shang­hai.

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