IKEA unpacks regional schemes
The investor behind flatpack giant IKEA is in talks to unpack 65 acres of regional development schemes.
LandProp, the property development arm of the retailer, is in advanced negotiations with Birmingham city council, British Waterways and the Homes & Communities Agency about unlocking the 52-acre Icknield Port Loop development project.
The £900m scheme proposes more than 11,000 homes and 75,000 sq ft of commercial space. The development was first mooted in 2008 but has had to be severely scaled back as a result of the credit crunch.
A source said that the council was also in talks with LandProp about potentially partnering on the Greater Icknield Port area, which is a longer-term regeneration of more than 150 acres that is expected to be more commercially-focused.
LandProp is also in talks with ITV in Manchester to buy its Quay Street site – home to the Coronation Street set. The broadcaster is selling the land ahead of its move to Peel's MediaCityUK in Salford later this year.
A development framework for the 13-acre site, which is being sold through Jones Lang LaSalle, outlines as much as 1.2m sq ft of offices and prime residential development.
LandProp has ambitious expansion plans for the UK and has set aside at least £500m for investment in the country.
"These two sites fit perfectly with the company's plan, but it is just the beginning of the expansion in the UK. Sites are being looked at all over the country," said a source close to LandProp. "The group has money to spend and that is putting it in a strong position when it comes to finding opportunities."
The firm announced its arrival in the UK in June 2010, when it bought 13 acres at Sugar House Lane to the south of the Olympic Park in Stratford, E15, for around £20m. A further 13 acres was later acquired from the Olympic Park Legacy Company and plans have now been lodged for Strand East, a 1.9m sq ft mixed-use scheme, roughly half of which will be housing.
LandProp is part of the Interogo Foundation, a vehicle controlled by the Kamprad family, which owns the rights to the IKEA franchise and receives 3% royalties on all IKEA products sold – equating to hundreds of millions of pounds a year.
GL Hearn advises LandProp.
Additional reporting by Lisa Pilkington.