Swedish furniture giant Ikea has bought the Churchill Square shopping centre in Brighton from Abrdn's Aberdeen Standard Property Unit Trust for a price understood to be around £145 million, in a deal first tipped by CoStar News in May.
Completion of the sale is a lift for the shopping centre market, and underlines longer timelines to get deals over the line in the uncertain climate this year.
Knight Frank came to market with the mall at the beginning of the year. The shopping centre was developed by Standard Life Investments at a cost of £90 million in October 1998 and is in the heart of Brighton.
The mall is a rare 100%-owned freehold top 20 UK shopping centre to come to market. There is around 520,000 square feet of retail and leisure and on-site parking for 1,600 cars. The company has also bought Chartwell Court, a residential tower block on the site, two attached car parks and a leasehold on a third car park.
Occupiers include Zara, Urban Outfitters, Apple, Pandora, Next, Bershka and Victoria's Secret.
Ikea City will redevelop traditional retail space into a meeting place “that is much more than just a shop”, the group said. It will sell around 6,000 of the brand’s products partly in the redeveloped former Debenhams store and will include a deli including its famous meatballs.
Ingka Centres, which is part of the Ikea retail and Ingka Investments family, has been buying shopping centres to create urban meeting places in recent years, including smaller Ikea stores as well as local start-ups, pop-ups and food outlets run by local entrepreneurs. The developments are seen by the Swedish flatpack furniture giant as a global template for its response to dramatic shifts in retail trends.
Two years ago it announced an £170 million investment buying and developing the Kings Mall shopping centre on Hammersmith's main high street in its first so-called "urban meeting place", with a second downtown development then underway in San Francisco.
The mall was rebranded as Livat, which means "a lively gathering" in Swedish. Ingka says this reflects its aspiration to offer fresh ways for communities to meet and find "new ways to shop, to eat, to work and have fun exploring everything a vibrant local area has to offer". The interior design is inspired by Ingka Centres’ Scandinavian roots and there are additional spaces for relaxing and socialising, with a new atrium.
Ingka Centres’ proposed €5 billion global expansion has included the opening of four new meeting places in China, as well as plans for India. Last year it bought the former Topshop block on London's Oxford Street for a flagship redevelopment, which is close to opening.
Cindy Andersen, the managing director of Ingka Centres, said in a statement that Churchill Square “fits perfectly into our global expansion strategy, allowing us to transform a traditional retail space to a meeting place that is much more than just a place to shop.
“We’ve proven in Hammersmith that traditional shopping centres have a strong future when they are adapted and constantly evolving to match the real needs of local communities.”
She added that the group intended to bring together a range of “affordable and sustainable” outlets including retail, restaurants, services and amenities at the site.
Peter Jelkeby, country retail manager and chief sustainability officer at Ikea UK and Ireland, said: “Sussex has long been an area of interest to us, and we really look forward to bringing Ikea closer to where our customers live, work and socialise and becoming a part of this vibrant community.”
Abrdn said in a statement: “We can confirm that the abrdn UK Shopping Centre Trust has sold Churchill Square, Brighton’s main shopping centre to Ingka Centres, part of the Ingka Group which also includes Ikea Retail. Having held the asset since the Trust was launched in 2005, it was felt the time had come to sell the centre and use the proceeds for other purposes. Knight Frank advised through the sale process."
JLL advised Ikea.