New regulations pave the way for second Ikea store

Swedish retailer Ikea can open its second Singapore store by 2007 thanks to a move by Singapore’s Economic Development Board, EDB.
     Ikea’s plans were revealed after a pilot program called the Warehouse Retail Scheme (WRS) was launched by the EDB late April.
     WRS allows businesses operating on a regional scale to reap significant savings and productivity gains from the co-location of various operations, such as headquarters, logistics and retail functions in one centralised location, claims the EDB.
     For the first time, retail activities which were previously disallowed within industrial or warehouse developments can now take place on industrial land under the WRS.
     EDB has earmarked 15 hectares of industrial land in selected outlying areas for WRS’ pilot phase.
     To ensure that only businesses with a genuine need for the land is eligible, companies applying for the WRS must own at least 60 percent of industrial activities like assembly, manufacturing and storage.
     There are also minimum requirements on turnover and number of staff which companies must meet to qualify for the WRS scheme.
     Ikea does that and is very thrilled by the new conditions in Singapore.
     “We are very excited by this positive development and are encouraged to hear that the government is opening up more options for land use, in this case, for retail use. The criteria and conditions set are very challenging, but it opens up a lot of possibilities for commercial activities on industrial sites,” says John H Petersen, managing director, IKANO Pte Ltd, the local Ikea operator, in a comment to the EDB’s move.
     What plans do you have for an expansion, or a new Ikea outlet in Singapore, and how does this change by the EDB affect your plans?
     ”We have for a long time had the ambition to establish a second Ikea in Singapore,” says John H Petersen to scandasia. “But due to strict zoning/use of industrial land, it has not been possible. With the new WRS in place, we have filed a letter of interest to EDB, and are currently evaluating possible suitable sites.”
     How large would this outlet be and where do you want to locate it?
     ”Our ambitions are to establish the second Ikea store in the north east / eastern part of Singapore, which will be our flagship store in Singapore with a size around 270,000 square feet. We are at this moment doing a market survey for the north east / eastern, catchment area, and if the result is positive, we can expect to have the new Ikea store ready in middle of year 2007,” says John H Petersen.
     It should also be noted that the change by EDB came after lobbying from, among others, the Swedish embassy in Singapore.
     “That is something we are not shy to tell and take some credit for,” says Mr Henrik Persson, Counsellor at the embassy’s trade section.

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