Ikea offers 19.21cr/acre

` State upbeat even as eyebrows are raised at the offer

Ikea, the Sweden-based world’s largest furniture retailer, has offered to purchase land in Raidurg, on the city’s outskirts, for a record price of `19.21 crore per acre, to set up its retail outlet in Hyderabad, the first in the country.

At a time when companies are seeking land from the government at subsidised rates, Ikea’s decision to purchase land at market rates has surprised the Telangana state government and its officials.

The government is upbeat about this development and says that this is proof of the demand for Hyderabad and its realty sector from across the globe.

Ikea India, a subsidiary of Swedish furniture retailers Ikea AB, had signed a memorandum of understanding with the Telangana government in September last year to set up its first store in India in Hyderabad with an investment of `500 crore.

Chief Minister K. Chandrasekhar Rao had appointed the commissioner of industries as a single contact point to ensure a speedy, transparent process for all applications, permissions and licences, which encouraged Ikea to speed up its operations.

The company had sought 50,000 sq. metres of land for the purpose and the government had directed the Telangana State Industrial Infrastructure Corporation (TSIIC) to identify suitable land.

The company selected land in Hyderabad Knowledge City, which falls under Raidurg limits.

The Telangana government on Thursday said that Ikea store in Hyderabad will give a major boost to the city.

“The decision by Ikea to set up its first store in Hyderabad will place the city on the international map of Ikea stores. Ikea retail outlets have a standard design and each location entails an investment of `500 crore to `600 crore. In addition, the backward integration of supplier linkages will have tremendous economic impact on the state,” a release from the CMO said.

Ikea India CEO Juvencio Maeztu and CFO Preet Dhupar had written to the government offering to purchase land at market rate, which the government has agreed to and appreciated.

Ikea was one of the first companies in India to be allowed 100 per cent FDI in retail under the government’s liberalised policy. In May 2013, the government cleared the proposal of the Swedish furniture major to invest `10,500 crore for setting up single brand retail stores in India.

The store is expected to provide direct employment to 500 people and indirect employment to several hundred others.

The CM has suggested that Ikea to tie up with artisans in Telangana.