Despite rumors and high market expectations, IKEA has made an announcement that quiets speculation. It states it does not have an opening date for a new store at the mixed-use Canada City Center complex in Monterrey, Nuevo Leon. However, the Swedish home furnishings company confirmed in February that while Monterrey is not necessarily the location of its next store, this market is part of its near-future expansion strategy.

IKEA's investments in Mexico are extremely important for the home products retail subsector. Currently, IKEA operates two stores, one in Puebla and another in Mexico City, which cover about 33,700 square meters together. Additionally, by mid-2024, the company will open its third store in Guadalajara, which is projected to be the largest in the country at nearly 23,500 square meters.

IKEA's expansion in Mexico not only enhances its retail presence but also stimulates the industrial sector. Since 2021, the Swedish furniture giant has invested at least $350 million in opening stores across the country. This investment has increased IKEA's gross leasable area (GLA) to nearly 57,200 square meters, up from just 11,500 square meters two years ago. According to data from SiiLA, the growth of IKEA's physical stores—with two operating locations and one under development in Guadalajara—is complemented by its logistical capabilities. The company supports its retail operations with significant industrial infrastructure, including a 24,300-square-meter warehouse at the CPA Logistics Center Estado de Mexico in the Zumpango-Nextlalpan submarket. This dual approach is essential to meet the increasing consumer demand and drives significant development in the industrial real estate sector, indicating a strategy for sustained growth in the Mexican market.

The expansion of home goods stores like IKEA in Mexico clearly indicates growing consumption and demand in the retail market. In 2023 alone, IKEA's sales in Mexico generated economic activity of 88 million euros (about 95 million dollars), equivalent to 4% of the estimated value of Mexico's furniture sector market, according to data from the American magazine Woodworking Network.

As per SiiLA, the home goods sector in shopping centers grew by 4% last year in Mexico, mainly occupying small and medium-sized spaces. Notably, only 12% of the stores dedicated to this sector are large stores, megastores, and anchor stores, like those typically occupied by IKEA.

While the home goods sector demonstrates steady growth, the presence of large stores like IKEA remains relatively limited compared to smaller outlets. This indicates that there is significant potential for expansion in the Mexican market. The strategy of major companies like IKEA, focusing on the development of large establishments, diversifies product offerings and drives the development and vitality of shopping centers and adjacent industrial areas.

For more information on the performance and tenants of the retail market in Mexico, explore SiiLA REsource or contact us at contacto@siila.com.mx.