IKEA set to buy Perth site
Swedish furniture giant Ikea is poised to pay $132 million for the freehold of its property in the northwestern Perth suburb of Innaloo as it looks to cement control over its Australian empire.
The group will buy the complex from the unlisted Lex Property Fund, which backed the development of the complex more than a decade ago.
A meeting of Lex unitholders will vote on the proposed sale on Friday, with Perth businessman Alan Tribe likely to reap a further payout from Ikea as a result of the deal.
Tribe, who has a fortune estimated at more than $400 million, earlier this month struck a deal to sell his private Cebas, which holds the franchise for Swedish furniture and homeware retailer Ikea in Adelaide and Perth, to parent company Ikea Group.
Ikea was already franchisee for Queensland, NSW, ACT, Victoria and Tasmania, and is seeking to merge all Ikea operations in Australia under single ownership.
Cebas bought the Ikea franchise on the west coast in 1999 and operated separately from Ikea’s eastern states unit. Bringing them together could give Ikea sales of about $1.4 billion annually.
Ikea’s purchase of Cebas, due to be completed on Tuesday, will bring all 10 Ikea stores in Australia under a single ownership, and was reported to be worth more than $170 million.
Tribe also owns the property on which the Adelaide franchise, on Sir Donald Bradman Drive, sits. The future of this asset is unclear but Ikea may pursue it. Lex says advice from independent property experts, including Knight Frank, Opteon and JLL, supports a sale of the Innaloo asset.
The firms say the highest and best use of the property remains its current configuration as an Ikea store. However, Lex warns there are risks to the property’s value if the Ikea store lease is not extended beyond its expiry in 2023 or it is extended on less favourable terms.
Lex has held two previous meetings, in June 2012 and June 2014, at which unitholders voted against pursuing a sale but the latest deal has renewed impetus as Ikea has bought out Tribe’s Cebas operation.
Cebas held the first right of refusal to purchase the property.
This article originally appeared on www.theaustralian.com.au/property.
