Zara founder, billionaire Amancio Ortega, is using the downturn in the commercial real estate market as an opportunity to buy assets cheaply and expand his real estate portfolio.
Ortega's Pontigadia Group, his personal investment group, is expanding its real estate holdings through a “buy low” strategy.
Pontigadia Group, Ortega's personal investment group with more than €90 billion in capital, is expanding its real estate holdings through a “buy low” strategy, according to the Financial Times.
10 acquisitions for €1.1 billion
The Spanish fund, which owns 59% of Zara's parent company Inditex, also announced 10 acquisitions worth €1.1 billion last year, spanning logistics, offices and residential real estate.
<Inditex's real estate portfolio is concentrated in Western Europe and North America, with notable assets including the Adelphi Building and Devonshire House in London, and Amazon's headquarters in Seattle. <While Pontigadia enjoys the profits from its stake in Inditex and does not need to take on debt, it is unaffected by the high interest rates that drove transaction volumes down by more than 50% in the US and Europe last year. <Roberto Sibera, CEO of Pontigadia, told the Financial Times that the group has noticed a “price adjustment in Europe across asset classes” in the past few months.
The right time to buy
He explained: “We believe this is a good time for low-debt investors as credit conditions tighten, reducing competition for reasonably sized potential acquisitions.”
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We believe this is a good time for low-debt investors as credit conditions tighten, reducing competition for reasonably sized potential acquisitions,” he said. <"In the case of Pontigadia, we are being offered assets in bilateral transactions, and in many cases off-market (prior to public announcement) - specifically in logistics, retail, office and infrastructure," he added. According to the Financial Times, in the past month alone, Pontigadia spent $113 million on a cold storage warehouse in the Miami area and €100 million on a distribution center in the Netherlands used by Primark.
According to the Financial Times, Pontigadia spent $113 million on a cold storage warehouse in the Miami area and €100 million on a distribution center in the Netherlands used by Primark.
The deals boosted its real estate portfolio to about €20 billion across 11 countries, and the group said it remains optimistic about the future of offices, which make up 40 to 50% of its real estate portfolio.
The group also noted that it remains bullish on the future of offices, which make up 40 to 50% of its real estate portfolio. The group also did not subscribe to the view that the rise of work-from-home has made offices a bad investment, adding that some tenants have adjusted their office space but none have sought to make reductions.
The group also said it remains optimistic about the future of offices, which account for 40 to 40% in its real estate portfolio. This year, Pontigadia is set to receive about 2.2 billion euros in dividends from its shares in Inditex, as well as Massimo Dutti and Bershka.
Pontigadia is set to receive about 2.2 billion euros in dividends from its shares in Inditex. It also annually generates €800 million to €900 million in income, including rent, investments, and renewable energy plants.
<Most of this money is reinvested by Pontigadia, with only a portion going to Ortega and his family, including Marta Ortega, Inditex's non-executive chairman since 2022 and Ortega's only daughter.
