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LONDON: Ikea, best known for its cut-price furniture, is planning a huge development around the Olympic park in east London that will help regenerate the rundown area with hundreds of homes and new office space.
The 26-acre Strand East scheme, which will be the first major UK investment by Inter Ikea Group's LandProp arm, will contain 1,200 new homes, 480,000 square feet of offices and a 350-bedroom hotel.
"Not only does it create a new high quality, waterside destination which provides new homes, jobs and leisure facilities; it is a demonstration... of investor confidence in the area's future in a difficult market," Olympic Legacy Minister Bob Neill said.
Politicians hope the Games will spark a wider regeneration of the area.
"East London is at the top of our shopping list in the UK," LandProp managing director Harald Mueller told Reuters. "We arrived in the country in 2009 but we want to become a premier league developer there and we love east London because it has huge potential."
London would be the focus of its UK activities as "the machine that will always work" but Mueller said the company was already assembling sites in undisclosed locations in the UK.
"We have some really serious big money behind us. We don't use debt and don't have the financing problems of many of our competitors. The timing for us is perfect as there are more and more opportunities in the market," he said, declining to reveal numbers.
The company reportedly paid about £25 million (RM123.49 million) to buy the Strand East site out of receivership and the company's firepower means it is a "serious partner" for banks looking to offload property assets that have fallen in value since the credit crisis, he said.
LandProp is talking to UK banks Royal Bank of Scotland, Lloyds Banking Group and Ireland's state-run bad bank NAMA about taking property off their hands but is not interested in acquiring loan portfolios, Mueller said.
Inter Ikea owns the intellectual assets of the more famous flat-pack furniture store chain of the same name though they are separate companies.
The development company already operates in Latvia, Lithuania, Poland and Holland among other countries.
London's Olympic village was sold in August to a joint venture between developer Delancey and the property arm of Qatar's sovereign wealth fund for £557 million. — Reuters
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