Swedish furniture retailing giant IKEA is in talks with Oberoi Realty to buy a built-to-suit retail space for over Rs 900 crore in the Mumbai-based developer’s upcoming project in Borivali suburb of Mumbai, said two persons familiar with the development.
The company is buying retail space spread over 3.5 lakh sq ft and this will be the largest space to be occupied by any single furniture brand anywhere across the country.
The proposed built-to-suit retail space that IKEA India is buying will be part of Oberoi Realty’s 25-acre project. The developer had bought the land parcel for Rs 1,155 crore after emerging as the highest bidder for the land parcel auctioned by Tata Steel in 2014. Last year, the builder launched a residential project on the same plot with ten 60-storey towers with 300 apartments each.
Last month, Tata Group company Rallis India announced on Bombay Stock Exchange that the company has signed an agreement with IKEA India for assignment of its leasehold rights for 26-acre land at MIDC Industrial Area in Navi Mumbai’s Turbhe locality for Rs 214 crore.
Rallis India added that the transaction is subject to the company/IKEA receiving all required approvals from regulatory authorities, including approval from Maharashtra Industrial Development Corporation (MIDC) for the assignment of leasehold rights, as well as payment of such charges as may be applicable for obtaining the approvals.
IKEA, the world’s largest furniture maker, was one of the first to enter into India following approval for 100% foreign direct investments in single brand retailing. The company is planning to invest Rs 10,500 crore to open 25 stores in the country, with focus on Mumbai, Delhi, Hyderabad and Bengaluru.
Last year, the chain had bought a 13-acre plot in Hyderabad for its maiden outlet in the country.