Tuesday, April 07, 2009

Brand New Ikea store in Ampang or Cheras?

By Biz Times

Swedish home furnishing company Ikea has set its sights on densely populated Cheras and Ampang in Kuala Lumpur for a new store.

The 13-year old Ikea Malaysia runs an outlet in Mutiara Damansara, Selangor, and has confirmed the opening of a second in Johor.

General manager Joseph Lau told Business Times that it was scouting for suitable land that will offer ample parking space.

"We need a second store in the Klang Valley. We are looking at the Cheras and Ampang corridor," Lau said.

It is looking at land not less than 6ha - roughly the size of eight and a half football fields - next to a highway.
Since it sells bulky items and thrives on the do-it-yourself model to keep prices low, size does matter for this retailer. It has to provide ample parking for customers to take their purchases home.

"Our Ikea now is on 5.3ha, and that is too small. We will need a larger piece of land. The minimum we want is 6ha. Our bottleneck now is the carpark. There is insufficient parking," Lau said of its existing store.

Lau, who said that the company was eyeing land with room for future expansion, added that it was too premature to say how much it would invest.

One property consultant said that land in Cheras and Ampang could cost about RM150 per sq ft if located next to the main road. This means that Ikea may spend some RM100 million for a 6ha site.

On the size of the land it hopes to acquire, Lau said: "The bigger the better. We do this everywhere in the world."

Lau said that he had received numerous proposals from landowners, many of which were not appealing. While Ikea was looking at a standalone store, the proposals were for it to occupy a portion of a mall as a tenant.

"If we have the land, it should be ready in three years," Lau said of the earliest possible date to open the store.

The second outlet in the Klang Valley is expected to equal the existing store's 360,000 sq ft, or a third of the retail space in Suria KLCC.

On its outlet in Desa Tebrau, Johor, Lau said the Ikano Group is yet to obtain possession of the land it bought from Plenitude for RM64 million.

Various issues on the project have to be resolved, including the design, before a likely operational date can be given.

It is buying 14.97ha to set up an Ikea outlet slightly smaller than that in Mutiara Damasara.

Ikea first opened at the 1Utama shopping mall, but moved to its own site in Mutiara Damansara in 2003.

It was reported that it invested RM180 million in the store and land. An additional RM120 million was pumped into the adjoining building of 45,000 sq ft where the Ikano Power Centre was set up.

Lau said that Ikea's next likely location was Penang, after Johor and a second one in the Klang Valley.

* So felles, its time to predict where is Ikea goin to open the new store in Ampang/Cheras? Property should shoot well ard them! hehe..