IKEA's malls arm buys retail property in the centre of Toronto

STOCKHOLM, March 25 (Reuters) - IKEA’s shopping malls business said on Thursday it had bought the Shops at Aura mall in the centre of Toronto in Canada as part of the furniture group’s strategy shift towards inner cities.

It bought the mall, which has been struggling to attract tenants and visitors, from private equity firm KingSett Capital.

Ingka Centres, which has 46 malls anchored by IKEA stores across Europe, Russia and China, said in a statement it would redevelop the ground and first floors of the building into an IKEA store that would open around the turn of the year.

It will be the first inner-city IKEA store in Canada. The building’s remaining mall space will mark Ingka Centres’ entry into Canada.

Located at the base of the Aura skyscraper, the property currently has around 12,000 square metres (14,350 square yards) of leasable area across three floors.

“The new downtown format IKEA store will comprise a large proportion of the redeveloped mall,” an Ingka Centres spokesman said.

Ingka Centres is scouting for inner-city property as part of IKEA’s shift in recent years towards the centres of large cities, away from out-of-town, in response to the shift to online shopping and other changing shopping behaviours. So far, such locations are leased.

It has earlier made two such acquisitions that it is in the process of developing: the King’s Mall in London and the 6x6 mall in San Francisco.

Ingka Centres is part of Ingka Group which owns most IKEA stores worldwide. It did not disclose the purchase price for the Toronto property. (Reporting by Anna Ringstrom; editing by Jonathan Oatis)