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Ingka Centres , part of the Ingka Group that includes Ikea retail and Ingka Investments, will invest close to €600 million (Rs 5500 crore) in developing a shopping destination with office space and a hotel in Noida, Sebastian Hylving, global expansion and development director at Ingka Centres, told ET. “India ticks all the boxes for most companies who want to expand. Indian market is full of potential and it is one of our top 3 priority markets,” said Hylving.
Anchored by an Ikea store, Lykli Noida will have 47,833 square metre of retail area while the center has the leasable area of 135,000 square meters. The executive said future of retail is both online and physical. “I don't believe that the physical retail is dead, otherwise we wouldn't have invested close to €1 billion in India,” said Hylving.
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Some items are more convenient to buy online. But if I want some inspiration then I will go to a meeting place and it's just to create sense of belonging,” the executive said. Spread over 1.
7 million sq ft, Gurugram’s retail destination will have the country’s first IngkaCentre, which the company aims to make operational by 2026, while Noida is expected to be operational by 2028. Ingka Group received the Indian government’s approval to invest Rs 10,500 crore in the country to open big-box stores in 2013. The proposed investment was part of that, but the company is open to increase the investment amount.
“Investments that is approved is up and running. We are scanning the market for opportunities and we have more appetite for India for sure,” said Hylving. On the plan for more Ingka centres in the country, Hylving said that Ikea sets the pace for expansion.
“We will only do a meeting place when Ikea joins,” said Hylving. The company has set internal revenue target for both the centres and low rentals is not an issue. “We have done our homework before we said yes to the investments.
We are well aware about the rental conditions in the market and as in any market, meeting places that are successful, are able to deliver more footfall and then that makes the tenants to be able to sell more. Then you have a better opportunity to share the profit together and with up to 25 million visitors that we envision for Noida, which I feel quite comfortable with,” said Hylving. The company is looking at an international brand for running the hotel.
The centre will follow sustainable construction techniques, using sustainably sourced materials with less carbon emissions. The company aims for 100 percent water recycling, and zero waste to landfill. “Direct connection to 2 metro stations and 4500 parking slots with more than 70 EV charging stations will encourage sustainable mobility.
We have a supplier code of conduct for contractors as well,” the executive said. Ingka centres are present in 13 markets, with 35 large scale meeting places and around 2000 brands operational in the center. The Swedish retailer had entered India in 2018 by opening a store in Hyderabad and has since seen revenue surge ahead of rivals.
The expected annual footfall at Gurugram centre is 20 million and 25 million at Noida. Ikea is present online in Mumbai, Pune, Hyderabad, Gujarat, Bengaluru, and 62 more markets around these regions. Three big format IKEA stores are operational in Hyderabad, Navi Mumbai, and Bengaluru, and one city store in Mumbai.
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