Saturday, November 27

Amancio Ortega, from Zara to the brick

Hotel Senator Playaballena (Rota, Cádiz).

Hotel Senator Playaballena (Rota, Cádiz).

The richest businessman in Spain – and eleventh in the world according to the Forbes List 2021 – not only fattens his fortune with the success of his textile emporium. Based invest the millionaire profits that each year brings Inditex, Amancio Ortega has acquired a real estate portfolio valued at more than 14.00 million euros, which surpasses the two listed real estate investment companies (socimis) of the Ibex (Merlin and Colonial). Ortega has buildings in practically all the listed streets of Monopoly and in the main financial and commercial capitals of the planet. In addition to being the home of numerous Inditex stores, it is also home to the competition (Primark, Mango, H&M …) and online giants like Amazon, Apple or Spotify.

The Post Building (London). London is one of Ortega’s preferred locations to invest in brick. In December 2019, it bought the headquarters of the consulting firm McKinsey, a large office building in the vicinity of Oxford Street, for € 700 million. EP / Alba Suárez

Pontegadea is the group of companies that channels all investments of Amancio Ortega and the vast majority are in the brick sector. This holding controls almost 60% of Inditex (Pontegadea Inversiones has 50.01% and the subsidiary Partler, 9.28%), which is equivalent to 1,848 million shares. At the current price (29.98 euros) it is 55,223 million euros. That amount fluctuates depending on the price and it is not in the plans to use it, but to maintain the legacy. What does allow Ortega to obtain liquidity to invest through Pontegadea are the dividends it receives each year (once or twice per year) out of the profits of Zara and the rest of the company’s clothing chains. 2020 was a poor year due to the impact of pandemic, but still Inditex managed to earn money and Ortega pocketed 650 million euros. This year the sum will rise to almost 1,294 million thanks to the distribution of an extraordinary payout. These transfers from the Inditex account to the Pontegadea account grease the investment arm of the Galician businessman, who in turn already enters large amounts as rent for the buildings he owns in half the world.

Haughwout Building (New York). The legendary EV Haughwout building is a historic building located in New York’s Soho. Ortega bought it for 133 million euros in 2015. The US capital is another of his favorite locations to invest. LO / Alba Suárez

Profitability in the pandemic

According to the data provided by the Ortega family ofice a few days ago, Pontagea earned 666 million euros in 2020, a considerable figure considering that the year was weak due to the pandemic. Profit in 2019 was 62% higher. The fall is mainly due to the lower dividend received from Inditex. In contrast, rental income was hardly affected: the real estate business reported the group 613 million last year, only 1.3% less than in 2019.

Cepsa Tower (Madrid). Pontegadea took over Torre Cepsa in 2016 for 490 million. The purchase came to fruition after Bankia formalized the sale of the 49-story building to Muscari, a firm owned by Khadem al Qubaisi (at the time president of the oil company), which resold it to Ortega. LO / Alba Suárez

On the other hand, in 2020 the value of the real estate portfolio was reduced, by lowering its appraisal from 15,163 million to 14,075 million euros, 7% less. But eliminated the currency effect, the decrease in the value of the portfolio is less than 5%, given that, according to the group, the high quality of the assets that compose it has reduced the impact of the covid crisis. In any case, the figure consolidates Ortega as the largest operator in the Spanish real estate market and places it above its direct European competitors.

Torre Picasso (Madrid). Another of the most emblematic skyscrapers in Madrid, the Torre Picasso, passed into the hands of the founder of Inditex in 2011, when he bought it from the construction company FCC for 400 million euros. Its 43 floors are dedicated to offices. LO / Alba Suárez

Properties in nine countries

Pontegadea owns buildings in the United States, United Kingdom, Spain, France, Canada, Italy, Portugal, South Korea and Mexico. Within these nine countries, properties are concentrated in large cities. The most recent real estate investment has been the purchase in London of the headquarters of the private equity manager Cinven, for 220 million euros. The operation transcended last month, although it was closed in December. With it, Ortega reinforces his real estate portfolio in the British capital. There he also sealed the largest purchase of all those Pontegadea has made so far: 680 million euros, what he paid for the Adelphy building in 2018. This monumental office building houses tenants like The Economist, Spotify, Shiseido or Conde Nast. In the same city, he has properties in the main financial and commercial areas, such as the central Oxford Street, where he bought the flagship of his competitor Primark for 550 million and is now his landlord.

Murray Hill (New York). The Murray Hill building, at 70 Park Avenue, is not among Ortega’s most expensive purchases, but it is among the most charismatic. Built in 1928, the building houses an Iberostar hotel in the heart of Manhattan. He paid 61 million in 2016. Iberostar / Alba Suárez

The giant Amazon also pays the rent to Amancio Ortega for its headquarters in Seattle, which the Galician tycoon acquired for 655 million euros three years ago, his second largest purchase after Adelphy. In Spain, Pontegadea also has large office and commercial buildings: such as Apple’s flagship store in Barcelona (between Paseo de Gracia and Plaza Cataluña) or number 32 of the Gran Vía in Madrid, which houses Mango, H&M and Primark stores. Of Ortega are also the Torre Picasso or the Torre Cepsa, which stand out on the skyline of the capital. Commercial premises, offices and also some hotels in New York, Washington, Toronto, Miami, Seoul, Paris … The real estate empire is in full expansion and although Ortega invests in some companies (it has 9.9% of Telxius, 5 % of Enagás, 5% of REE and 12% of the Portuguese REN) the bulk of its profits go to brick.

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