On October 1, 2025, IKEA announced the acquisition of an office building in Manhattan for $213 million, as part of its broader strategy to expand its presence in the United States. The property will be converted into a new urban-format store located in the heart of New York City. 

The building, covering approximately 20,000 square meters, is situated in Midtown Manhattan and was previously used for office and retail purposes. Following a planned renovation, it will be transformed into a multi-level IKEA “city store”, designed with a smaller showroom area and a dedicated order pickup zone. 

According to Reuters, the transaction was carried out through Ingka Group’s U.S. division, which operates IKEA stores across the country. The purchase was fully financed with internal funds, without external borrowing. 

The Manhattan acquisition is part of IKEA’s $2.2 billion investment program to expand its North American infrastructure over the past two years. This initiative includes the opening of new stores, order pickup centers, and warehouses across the United States and Canada. 

In 2024, IKEA purchased several other properties in Chicago, San Francisco, and Toronto, all aligned with its strategy to strengthen the brand’s presence in densely populated urban centers where large retail spaces are limited. 

According to the company’s statement, renovation work on the Manhattan property will begin in 2026, with store opening planned for 2027. The location is expected to become a flagship element of IKEA’s U.S. urban retail expansion. 

Comment from M24 SunShine Investment Division:

The $213 million acquisition in Manhattan demonstrates IKEA’s determination to strengthen its U.S. market position but also entails significant cost and execution risks. Converting an office building in a densely populated area requires substantial capital and time, while the “city store” format may not deliver rapid returns. High operational expenses and ongoing competition from online retailers could limit profitability in the short term.