Schroders has sold the Kings Mall in Hammersmith, London for £170m (€200m) to Ingka Centres, which will transform the shopping centre into an IKEA-achored mixed-use destination.

It is the first time that the parent company of IKEA has acquired a shopping centre and marks a shift to establishing more urban locations.

“These urban projects are designed to complement IKEA retail’s strategy of opening smaller format stores in inner city locations in response to global urbanisation trends, changing customer behaviour and the digitalisation of retail,” Ingka said.

In 2018, Ingka announced a new strategic vision and investment of €7.3bn to transform its business in response to the changing retail environment.

“We believe we can upgrade assets in good locations and Kings Mall is a great example of this,” said Gerard Groener, Ingka Centres’ managing director.

“Modern physical retail needs to be built around local community needs, a complementary mix of uses, digitalisation and sustainability. We simply have to stay relevant to our customers and understand how people want to spend their time.”

Peter Jelkeby, country retail manager and chief sustainability officer at IKEA UK & Ireland, said: “Our plan to open a new city centre store in Hammersmith is an exciting next-step, as we continue to respond to people’s evolving shopping habits, making IKEA more convenient than ever before.”

The 27,133sqm shopping centre was acquired from the £2.6bn Schroder UK Real Estate Fund, which acquired the mall in 2015 for €153m.

Fund manager Jessica Berney said the sale proceeds would be reinvested in “the other exciting development projects” held by the fund.

“The sale of Kings Mall marks the successful completion of our business plan since acquisition in 2015 and we look forward to seeing what the new ownership will bring to the scheme,” Berney said.