The shopping centre arm of furniture giant IKEA is putting up for sale 23 outdoor retail parks across Europe, timing the sale to coincide with a commercial property market boom driven by low-interest rates. 

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Chief Executive Gerard Groener, who took over as head of IKEA Centres in March, declined to estimate the value of the properties but said he was confident IKEA would not lose money on the divestments.

"The market is strong," he told Reuters in an interview. "I expect to finalise the deals in less than two years." 

IKEA Centres, a little-known subsidiary of the Swedish furniture retailer, owns 41 indoor shopping malls in Europe, Russia and China and 25 outdoor retail spaces in Europe.

They help attract customers to the IKEA stores placed at the heart of the centres, as well as yield rent from tenants. 

Groener said IKEA Group was inviting potential buyers for 23 outdoor retail parks which could include listed and private mall operators and institutional buyers such as pension funds.

Years of low global interest rates have meant favourable borrowing conditions for firms looking to expand and have pushed institutional investors to look beyond bonds for assets with better yields such as commercial real estate.

IKEA Centres says its total property portfolio is worth 9 to 10 billion euros, making it a top 10 shopping centre operator behind France's Klepierre and Unibail-Rodamco, Australia's Westfield, the US group Simon Property and Dalian Wanda in China.

Groener, a former executive at Dutch shopping centre operator Corio which was bought last year by Klepierre, said gains from divestments would be invested in new malls across Europe, Russia and China. 

IKEA Centres has plans for 20 new centres. 

New Consumer Patterns

Groener said the decision to sell the retail parks was not down to cash shortage, but rather to a strategic decision to focus mainly on indoor malls, betting they will attract more visitors long term as they increasingly act as meeting places. 

The space allocated to entertainment and restaurants has grown to 15-20% in IKEA's new centres, he said.

Demand from food caterers for rental space was growing, and IKEA was also actively choosing such tenants in its push for malls to become more social hangouts. 

"We need to cater for the needs that consumers have, and they are rapidly changing," Groener said, pointing to growing e-commerce and the need for social spaces. "So we need to create a place that people like to go to, where they like to meet each other, where they do much more than shopping." 

Last year, IKEA Centres' then-boss told Reuters that malls, especially in China and its biggest market Russia, were a place not only for shopping but also for eating and socialising. In China, many of the tenants with the biggest turnover per square metre are restaurants, he said.

IKEA Centres has been fully owned by IKEA Group, which owns most IKEA stores and e-commerce worldwide, since 2015.

IKEA Group is a franchisee to Inter IKEA Group which owns the brand. The group opened its first shopping centre in 2001.