Inter IKEA, the investment arm of the Swedish furniture giant, has made a major investment in east London’s Olympics zone as part of plans to build its burgeoning residential development business in the UK, EGi News can reveal.
The group has bought the 13-acre Sugar House Lane residential development opportunity opposite the Olympic Park in east London, E15 through CB Richard Ellis acting as LPA receiver to the Royal Bank of Scotland.
It has paid an undisclosed sum for the site which comprises a series of redundant industrial warehouses that will be redeveloped as 1,500 houses, plus offices and warehousing aimed at the creative and film industries.
The key gateway site lies between the VIP entrance to the 500-acre Olympic Park on Pudding Mill Lane and Stratford High Street, and the Olympic Park Legacy Company’s 3 Mills Lane Film Studios.
Inter IKEA, advised by Catella Sweden, is looking at a string of opportunities across the UK. The group’s development arm, called Landprop, will build out the schemes.
Inter IKEA has steadfastly ignored the UK as a location for the IIKEA furniture store anchored mixed-use developments that have sprung up across Europe in the past decade, considering the UK shopping centre market too mature.
However, the business has also focused on building housing-led regeneration schemes that do not include IKEA stores but retain the IKEA vision of modern and simple design.
The investment in Sugar House Lane is understood to represent the largest private sector investment in the Olympics area since Wesfield’s acquisition of the Stratford City development site two years ago.
Sugar House Lane and Three Mills are currently the focus of a masterplan exercise by the London Thames Gateway Development Corporation with Newham Council aimed at creating a “Covent Garden of the East” in the area. Existing planning policy for the area as a whole designates a “sympathy for local heritage, maintaining industrial capacity and the potential for family housing as key factors”.
Peter Andrews LTGDC chief executive said: “This is a highly significant moment for east London. With a major global investment fund putting east London in poll position against other destinations it shows that our vision for the area’s future is as exciting as it is enticing for international investors.
“Our vision is for a mixed-use district of the highest quality, set within an unrivalled landscape of parkland and waterways anchored by the Olympic Park. Connecting local communities to major drivers of east London’s economy it will combine leisure and recreational opportunities and together make a very special place.”
The site was bought by private developer Cleveland in 2004 via a series of RBS-backed acquisitions.
Cleveland had been working up a masterplan for the site with housing associations East Thames Group and Southern Housing.
However, those plans failed to come to fruition, and the site was designated a conservation area in 2008.
paul.norman@estatesgazette.com
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