IKEA Brothers Expansion In China

In recent days, the IKEA shopping center group, which was founded by IKEA group, confirmed to reporters that its first Super Regional Shopping Center in China has been put into operation, located in Wuxi, Jiangsu. Unlike the well known IKEA home market, the shopping center has 335 flagship stores or main stores.

The IKEA shopping center group that develops the above shopping center project, and IKEA home, which is well known to Chinese consumers for household goods, is actually a "brother" enterprise. In 2001, IKEA home group IKEA group and Intel IKEA Group invested 49% and 51% respectively, and set up a joint venture IKEA group, which is headquartered in Copenhagen, Denmark. IKEA is its long-term strategic partner. The IKEA Shopping Center Group has built 30 shopping centers in 14 countries and has 24 projects under construction and planning.

Although the number of shopping centers in the Chinese market is growing rapidly and homogenization is serious, Qiao Ying, director of public relations of IKEA IKEA China, told reporters that "Intel IKEA is not worried about the current downturn and is ready to further expand its shopping mall development in China. There will be more plans to announce in the future".

At present, IKEA has identified 3 projects in China. Apart from the above Wuxi projects, shopping centers in Beijing and Wuhan will be released in the next two to two years. In the meantime, IKEA has also said that it will build shopping centers in Shanghai.

　　 The biggest "foreign landlords"

IKEA's first shopping center in China, located at No. 3 Tuan Jie Road, Xishan District, Wuxi, belongs to the urban fringe area rather than the urban center. Today, the shopping mall, called "Yunlin," looks like a "big box" shopping center, has opened.

According to the information provided by IKEA official, the shopping mall occupies an area of about 230 thousand square meters, with four main businesses: IKEA home, Auchan supermarket, Suning Appliance and Jinyi cinema, and 335 flagship stores or main stores.

An interesting detail is that the total amount of money invested and the way of selling it are now a mystery is the total investment of about 3 billion yuan in IKEA.

The reporter consulted all parties' data and failed to find any information about the time of the project's grant, the way of giving or the amount of money, and at the same time, the head of public relations of IKEA China company refused to disclose it on the grounds that the question was not easy to answer.

In 2012, the Southern Metropolis Daily quoted a IKEA insider as saying that IKEA could use land at low price or free of charge with its foreign investment status.

"IKEA requires land to be provided free of charge, IKEA gives money to build a house and has the right to use it for 30 years, or if IKEA is working with the local government, the local government is responsible for land requisition and construction of housing (generally local city investment companies), and shares in shares. IKEA is only responsible for operating, distributing profits in proportion, or local governments sell land to IKEA for the price of industrial storage land, and land ownership for 50 years." The source said.

These people also pointed out that in fact, the Wuxi project is not the earliest item in the true sense of IKEA's shopping center in China. "The negotiation of Suzhou IKEA project is earlier than Wuxi, but the progress is slow, mainly on the policy".

However, Ding Hui, managing director of Intel IKEA shopping center, once denied the Suzhou project. However, when Ding Hui responded to the Wuxi project, he said, "it's too long to remember."

The reporter noted that the IKEA Wuxi project had applied for changes in the design plan in July 2011. According to the "change of design plan" of the planning office of the Wuxi City Planning Bureau, the main content of the plan changes is that the commercial area along the Dongan road will be increased from four stories to five floors, and the entrance hall should be adjusted appropriately. The area of the basement will be adjusted from 1000 square meters to 3080 square meters.

And IKEA in Beijing Daxing, Wuhan, through the auction to get the land, but are all the bottom price transaction.

In July 23, 2009, Intel IKEA won the two phase project site of Xihongmen commercial complex in Daxing District, Beijing, with a bid price of 790 million yuan. At present, the planning and construction area of the site is 304 thousand square meters, which is equivalent to 2599 yuan / square meter of floor price.

By contrast, in July of the same year, after the intense auction, Shanghai Greenland Group won 3 billion 25 million yuan to win the commercial and financial mixed land of Daxing Huangcun 19 and the 20 residential project site. According to the final transaction price, the floor price of the plot was about 6605 yuan / square meter, which became Daxing's new "land king". Subsequently, Daxing Huangcun New Town North District 2 was Baoli real estate to 1 billion 630 million yuan to win, converted to the floor price of about 7248 yuan / square meter, once again refreshed the floor price record of Daxing District.

In July 2010, IKEA spent more than 600 million yuan to acquire 450 acres (300 thousand square meters) of commercial and financial land in Wuhan. It is used to build a shopping mall with a total investment of 3 billion yuan and a total lease area of 170 thousand square meters. At present, the main business of IKEA shopping center in Wuhan has already opened, and the overall shopping center is planned to open in 2015.

The Wuhan morning post, the local media, described the plot as an auction, saying it was "the least suspense" in the 19 plots of the auction, and was "competing for IKEA in the case of no competition". The floor price of the project was 1060 yuan per square meter.

It is worth mentioning that after 16 years of insistence on buying, not leasing, IKEA has become one of the largest foreign landlords in China.

According to the data in 2013, IKEA had 14 stores in China at that time, 13 of which were built for land purchase, and only Guangzhou IKEA was leasing. In addition, IKEA has bought a piece of land in three cities of Chongqing, Wuhan and Hangzhou. So IKEA has 16 pieces in China.

According to the data given by IKEA people, the average area of these 16 lands is about 40 thousand square meters, with a total area of 640 thousand square meters.

And its brother enterprise, IKEA, has just announced the three places in Wuxi, Beijing, Daxing District and Wuhan, which have exceeded the total land area accumulated by IKEA group in the past more than 10 years.

　　 IKEA The future is not yet clear.

However, over the past few years, IKEA brothers have been involved in commercial real estate in China, and China is in the midst of an astonishing shopping center construction.

The commercial real estate service company, CB Richard Ellis, surveyed and analyzed the construction of shopping centers in 180 cities around the world. The report shows that the construction scale of China's shopping centers is the highest in the world. Of the 180 cities surveyed, half of them are shopping centers in China. While the number of shopping centers has increased rapidly, there has been a decline in the volume of shopping centers and the reduction of flat income.

The research report also shows that by the end of 2013, the stock of China's shopping centers had reached 3450, and the growth interval of China's shopping centers increased from 200-300 to 200-300 now. By 2015, the total number of shopping centers in China will reach more than 4000. China has become the most attractive area of Asian and global commercial real estate.

After the development of "great leap forward", China's shopping center has triggered worries about oversupply in the real estate industry. Whether IKEA can truly play the IKEA brand effect is different in the industry.

Yin Xufei, a real estate researcher at CIC, looks at the "oversupply" of shopping centres in some parts of China. Some shopping centers with accurate location, experiential consumption function and reasonable layout still have good development space and profitability.

"Foreign retailers" construction Shopping Mall On the one hand, it meets the consumption and entertainment needs of the emerging middle class in China; on the other hand, it is also a diversified investment, and further deeply participates in the performance of China's market economy. Yin Xufei said.

Yan Yuejin, a researcher at Shanghai Yi Ju Real Estate Research Institute, pointed out that the construction of shopping centers by foreign retailers like Intel and IKEA is a distinctive feature. "Parking spaces for such commercial projects are quite adequate, so they can also make shoppers willing to shop, which is contrasted with the lack of parking spaces in many domestic projects and the matching environment."

"Of course, the advantage is itself. Brand power Relatively large, the benefits of attracting customers will be better than domestic shopping malls. In addition, its excellent store management experience is also a key factor in promoting performance improvement. Yan Yuejin said.

Song Yanqing, President of lander consulting, believes that the development strategy of "bundled" shopping center projects will be restricted by IKEA's expansion decision in China. This development mode will restrict the number of opening projects in the future. And leaving Wanda, Yintai and other competitors, IKEA's Chinese colleague Hongmei Kai Long has already taken the lead in the layout of the major cities in the country, and its expansion speed is speeding up.

It is worth mentioning that, with the IKEA shopping center as the main business of IKEA home, WAL-MART announced shortly at the Huajian shopping center, which will also be a main store with hypermarkets and Sam member stores.