IKEA Group Considers $1 Billion Investment in Russia's Biggest Shopping Complex

Commercial News » Commercial Real Estate Edition | By Michael Gerrity | April 27, 2010 2:36 PM ET

Swedish IKEA Group, one of the world's largest home products retailer, is planning to invest up to $1 billion in the construction of a giant shopping complex in Moscow region "Mega-4", sources in the local authorities have recently told.

A source close to the project said the shopping complex will be the biggest in the whole Europe. According to Russian business daily Vedomosti, IKEA has already got 50 hectares of land in the Mytishchi district of the Moscow region and is currently preparing all the needed design documentation.

The construction works will start next year and is scheduled to be completed in 2013. According to him, the total area of the complex will exceed 400 000 square meters.

Meanwhile sources in IKEA have confirmed the existence of this project, but do not consider it as a done deal.

Last year, Anders Dalvig, IKEA's president announced the suspension of all investments in Russia due to "unpredictability of the country's administrative procedures in some of its regions."

At the same time a major owner of IKEA, Ingvar Kamprad has accused Russian power engineer companies in cheating the company at 135 million euros by presenting inflated bills for electricity and gas.

"Our view has not changed, the preparation of documentation for the "Mega-4 project is currently suspended," - Irina Johanssons, Manager of Public Relations of "Mega" a new concept for shopping of IKEA Group.

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