Ikea is coming to Fifth Avenue in NYC

Ingka Investments, the investments arm of Ingka Group, which owns the majority of IKEA stores worldwide, announced Monday a real estate investment on New York City’s iconic Fifth Avenue
Ingka Investments, the investments arm of Ingka Group, which owns the majority of IKEA stores worldwide, announced Monday a real estate investment on New York City’s iconic Fifth Avenue. Photo credit KPF

NEW YORK (BLOOMBERG) -- Ingka Investments, the investment arm of the largest Ikea retailer, is taking a stake in a new tower going up on Manhattan’s Fifth Avenue.

The business will own about 80,000 square feet (7,430 square meters) of retail space at 570 Fifth Ave., a tower being built by Extell Development, according to a statement Monday. The business will also hold a one-third stake in the remainder of the building, in addition to preferred equity.

Plans for some of the tower’s retail space at this stage include an “Ikea customer meeting point.” While the exact details for what that would entail are still in flux, one option being considered is a traditional store where customers could buy and carry out products, an Ingka spokesperson said.

"This next phase of our investment and expansion in the U.S. signals our commitment to bring IKEA closer to people in city centers," said Javier Quiñones, CEO and chief sustainability officer at IKEA U.S
"This next phase of our investment and expansion in the U.S. signals our commitment to bring IKEA closer to people in city centers," said Javier Quiñones, CEO and chief sustainability officer at IKEA U.S. Photo credit KPF

The company is among major firms including Gucci’s parent and Prada-tied entities snapping up spots on the famed shopping corridor in New York. Ingka has been seeking to build out its presence in city centers, agreeing to purchase a property in London and striking deals for spots in Paris.

For the New York stake, “the timing is just right because we see a great opportunity to be part of the exciting urban revitalization happening post-pandemic,” said Peter van der Poel, managing director at Ingka Investments. “This investment is perfectly in line with our long-term strategy to bring Ikea closer to our customers.”

Extell, a developer led by Gary Barnett, had been searching for an investment partner for its new tower, which is scheduled to be completed by 2028. The developer will retain a two-thirds stake in the building.

“We came up with Ikea, and they are very interested, of course, in getting a large retail space in the heart of the city,” said Barnett, who is the founder and chairman of Extell. “And we believe we’re getting a great investment into the overall project.”

— With assistance from Natalie Wong

This story originally appeared on Bloomberg.com.

Featured Image Photo Credit: KPF