The parent company of furniture retailer IKEA is buying a property at 214 Oxford Street in London for £378m (€446m).

Ingka Investments has agreed to buy the former Topshop flagship Oxford Circus store, a  239,000sqft property spread over seven floors, with retail space on six floors.

Ingka said part of the vacant retail space will be used by IKEA UK & Ireland. The new store is planned to open in autumn 2023. 

The Oxford Circus store will host IKEA UK’s second smaller store format and will follow the opening of IKEA Hammersmith later this winter.

Ingka said the investment supports the ”transformation of Ingka Group’s retail business, bringing IKEA closer to customers by opening new IKEA store formats in city locations, in response to increasing urbanisation and new shopping behaviours”.

Krister Mattsson, managing director of Ingka Investments, said: “This property offers great potential for retail space, and we firmly believe in the long-term value of the real estate market in London.”

Mattsson said Ingka Investments continues to target acquisitions of commercial real estate in other major cities where Ingka Group operates, adding that securing ownership of properties in prime locations instead of leasing will preserve value on a long-term basis.

“This investment also represents our continued commitment to invest in the UK following our recent investments in location technology company what3words and Winnow, a company that works to reduce commercial food waste.”

Peter Jelkeby, country retail manager and chief sustainability officer, IKEA UK & Ireland, said: “Even though online shopping continues to accelerate at a rapid pace, our physical stores (large and small), will always be an essential part of the IKEA experience – as places for inspiration and expertise, community and engagement.”

To read the digital edition of the latest IPE Real Assets magazine click here.