Amancio Ortega’s RE Business is Worth Almost €9bn

23 July 2018 – El Mundo

Amancio Ortega is continuing to expand the perimeter of his real estate empire. Pontegadea, the investment arm of the Inditex creator, grew by 2.8% at the end of 2017, to reach almost €9 billion (€8.759 billion) and that, despite the fact that its profits decreased by 13%, to €1.475 billion due to donations made to his foundation.

Pontegadea groups together both Amancio Ortega’s stake in Inditex as well as his real estate investments. According to the accounts filed with the Mercantile Registry of La Coruña, the company closed 2017 with a net profit attributed to the parent company of €1.475 billion, 13% less than a year earlier, due to donations amounting to €350 million made to the Amancio Ortega Foundation, a large proportion of which are devoted to the fight against cancer.

Specifically, the Foundation donated €320 million to the purchase of state-of-the-art cancer equipment, which is going to be installed in public hospitals across all of the autonomous regions.

At the end of last year, the assets of the Pontegadea group were worth €29.028 billion, its net equity amounted to €21.006 billion and its business volume reached €25.721 billion.

In addition to Torre Cepsa, which it purchased for €490 million and the building at Gran Vía 32, Ortega owns several other office buildings in Madrid such as Torre Picasso and the Castellana 79 building, which houses the largest Zara store in the world.

The Zara property portfolio

Meanwhile, Pontegadea Inmobiliaria recorded revenues (primarily due to rental income) of €385 million, up by 13.6% compared to a year earlier, and the fair value of its portfolio of assets, set by an appraiser, was €8.759 billion, up by 2.8% compared to a year earlier.

51% of the real estate revenues come from European markets, 46% from America and the remaining 3% from Asia, according to the annual accounts, which reflect that Pontegadea’s real estate investments amounted to €629 million in 2017 and at the end of the year, they amounted to €6.913 billion: €1.688 billion in Spain and the remaining €5.225 billion overseas.

Of the investments outside of Spain, €2.681 billion correspond to investments in America, €2.191 billion to Europe (excluding Spain) and €353 million to Asia.

Pontegadea Inversiones, the parent company of the Pontegadea group is chaired by Amancio Ortega and its first Vice-President is his wife, Flora Pérez.

In addition, the company’s directors include José Arnau, who is also a director of Inditex, and Roberto Cibeira, in turn, the CEO of Pontegadea Inmobiliaria.

The Inditex group, owner of fashion chains such as Zara and Massimo Dutti, recorded a net profit of €3.368 billion in the last financial year (which closed in January), up by 6.7% compared to a year earlier, and its sales amounted to €25.336 billion, up by 8.7%.

Original story: El Mundo 

Translation: Carmel Drake

Pontegadea Segregates its RE Rental Activity in Spain

2 January 2017 – Eje Prime

Pontegadea, the real estate investment vehicle owned by Amancio Ortega (pictured below) is starting the year by reorganising its business. The company has segregated its property rental activity in Spain into the company Torre Norte España, now Pontegadea España, which has also increased its share capital by €100 million.

According to a statement published in the Official Gazette of the Mercantile Registry (Borme) on Tuesday, the new real estate subsidiary will group together most of Ortega’s assets in Spain, worth more than €1.6 billion. The portfolio includes Torre Cepsa, designed by the architect Norman Foster.

Specifically, Pontegadea will own Pontegadea España as a subsidiary. The founder of Inditex will unify almost all of his real estate business in the Spanish market into that company.

In parallel to this asset reorganisation, the company Partler 2006, which sits under the umbrella of the Pontegadea group and which owns 9.284% of Inditex, has merged by absorption with RL30 Inversiones, owner of the building on Gran Vía, 32, which is home to one of the largest Primark stores in Europe.

The reorganisation of the Inditex founder’s real estate assets is a formal matter from a legal point of view with the aim of simplifying its structure that has been based on rapid growth, according to Europa Press.

Pontegadea Inmobiliaria already owns specific companies in the other countries in which it has a presence, such as in the USA, France, the UK and Korea, which group together the real estate activities of the founder of the textile giant in each case.

Original story: Eje Prime

Translation: Carmel Drake

Amancio Ortega Creates RE Subsidiary In Spain With Assets Worth €1,600M+

13 November 2017 – El Confidencial

Pontegadea, the investment vehicle owned by the founder of Inditex, Amancio Ortega (pictured below), has created a real estate subsidiary in Spain to group together its local assets, which have a combined value of more than €1,600 million. The assets include Torre Cepsa, designed by the architect Norman Foster and acquired at the end of 2016 for €490 million and the building at Gran Vía, 32, which is home to one of the largest Primark stores in Europe, and which was purchased at the beginning of 2015 for €400 million.

Specifically, Pontegadea Inmobiliaria, which closed 2016 with real estate assets worth more than €6,700 million, will have a new subsidiary, in the form of Pontegadea España, a company in which Ortega will group together his real estate business in the Spanish market.

Sources close to the deal have explained to Europa Press that Pontegadea Inmobiliaria already has specific companies in many of the countries in which it operates, such as in the USA, France, United Kingdom and Korea, to hold the real estate activity of the textile giant’s founder in each respective territory.

It is about having a “more homogenous” structure in all of the markets in which Pontegadea Inmobiliaria operates (…). In fact, according to the same sources, there was no need to constitute a company for this activity in the Spanish market, given that Pontegadea already had one, Torre Norte Castellana, owner of Torre Cepsa, acquired at the end of last year. As such, it has only had to change the name of that entity to Pontegadea España, and add the leasing of real estate assets in Spain to its activity, according to the Official Gazette of the Mercantile Registry (Borme).

Torre Cepsa, Gran Vía 32 and Torre Picasso

In addition to Torre Cepsa (…) and Gran Vía, 32, Ortega owns several other buildings in Madrid, such as Torre Picasso and the Castella 79 building, which houses the largest Zara store in the world.

The founder and largest shareholder of Inditex has received revenues of €1,256 million this year in the form of dividends from Pontegadea, through the companies Pontegadea Inversiones and Partler (through which he controls a 59.294% stake in Inditex), compared with €1,108 million in 2016.

Ortega closed 2016 with real estate assets worth €6,719 million, which represents €661 million more than a year before, grouped together into his company Pontegadea Inmobiliaira, which has net assets worth €6,485 million, up from the €5,460 million that it held a year earlier. Ortega, who invests some of the dividends he receives from Inditex in the real estate sector, owns the largest real estate company in Spain, focusing on the sale, purchase and rental of large buildings. The firm owns a portfolio of real estate assets, fundamentally comprising non-residential, office buildings located in the centre of large cities in Spain, the United Kingdom, the USA and Asia.

Original story: El Confidencial

Translation: Carmel Drake

Drago Capital To Convert Banco De Andalucía’s HQ Into A Hotel

23 February 2016 – Expansión

The historical headquarters of Banco de Andalucía has new owners and a different future. Drago Capital, which has purchased the building from Popular, together with a Spanish family office whose identity has not been disclosed, will convert the property into a hotel.

Expansión revealed on Thursday that the investors have paid €25 million for the property, which is located right in the centre of Sevilla. The building has a constructed surface area of 8,300 m2 and includes a basement, ground floor with mezzanine and six other floors.

The hotel will occupy the upper floors of the building, whilst the lower floors will contain a spacious area of commercial premises covering approximately 2,000 m2 of gross leasable area (GLA). McPherson Consultores has been engaged to market the premises.

According to sources at Drago, the firm will take responsibility for managing the building work itself. Recently, it led a consortium to undertake the complete renovation of the iconic building at Gran Vía, 32 in Madrid, which was acquired by Pontegadea a year ago.

Original story: Expansión (by Lidia Velasco)

Translation: Carmel Drake

CBRE: Non-Residential RE Inv’t Exceeds €13,000M In 2015

28 December 2015 – Expansión

The Torre Espacio skyscraper, Gran Vía 32 retail store, the Plenilunio shopping centre and the Hotel Ritz in Madrid are just a few examples of the real estate assets that have changed hands in the last year and which have placed the level of real estate investment in Spain at levels never seen before.

Between January and December, investment in non-residential properties (in other words, in offices, shopping centres, retail premises, hotels, warehouses and logistics centres) amounted to €12,250 million, according to the consultancy CBRE; and 2015 is expected to close with a total volume of €13,000 million, an unprecedented figure in the sector in Spain.

Even though the volume of real estate investment was strong in 2014, with a total of €10,000 million – returning to the pre-crisis figure of 2007 – that amount was surpassed within the first nine months of 2015: between January and September, purchases involving assets worth €10,800 million were closed, up by 57% compared with 2014 and by €600 million compared with 2014 as a whole.

This record figure is explained by the return of international funds to the Spanish market, following their exit when the bubble burst (they have been returning slowly since the end of 2013), as well as the rise in a new type of company: the Socimis.

This type of company emerged in 2009 when legislation was created for the launch of these vehicles, inspired by the American REITs. Nevertheless, it was not until the reform (of that legislation) in 2012, that the first Socimis, which were primary managing family wealth, started to flourish. Two years later, the first large real estate companies debuted on Madrid’s stock exchange and there are now four such listed companies: Merlin Properties, Hispania, Lar España and Axiare. (…).

Indeed, one of these, Merlin Properties, has starred in the largest operation in the sector this year, which, despite being a corporate purchase, is included because of its real estate component: the purchase of Testa, formerly a subsidiary of the construction group Sacyr.

Excluding this acquisition, the sector recorded total investment of €7,621 million during the 9 months to September, after a very active summer (traditionally a period when very few operations are closed).

The largest operations included acquisitions of single assets, such as the Megapark shopping centre in Bilbao, which the Socimi Lar España purchased for €170 million, as well as the purchase of batches of properties, such as the Thunder portfolio, comprising two office complexes in Madrid and Barcelona, acquired by Axa Real Estate; and the purchase of 16 supermarkets leased to Dia and Carrefour by the fund Kennedy Wilson, which paid more than €85 million.

Hotels

Hotels have also experienced a significant boost in terms of investment this year. “In 2014, hotel investment amounted to €1,100 million; this year, we have already exceeded €1,900 million and we expect to close the year with a volume of €2,000 million”, said Mikel Marco-Gardoqui, from CBRE. (…).

The experts at the consultancy firm expect interest from the funds to continue into next year. “We think that investment will amount to around €10,000 million in 2016, although we expect to see fewer operations, because prices are going to increase (…)”, says Heriberto Terual, Director of Corporate Finance at CBRE.

Original story: Expansión (by R. Ruiz)

Translation: Carmel Drake

Inv’t In Commercial Assets Doubles To €920M In 2015

11 December 2015 – Expansión

From €32 million to €920 million in just five years. Those are the figures from the market for investment in commercial premises in Spain. According to the consultancy firm JLL, so far this year, investors and family offices, for the most part, have invested €920 million purchasing commercial premises, almost double the figure recorded in 2014, when they spent €452 million on these types of assets and 29 times the figure recorded in 2010, when investment in this segment amounted to just €32 million.

The almost €1,000 million invested this year has involved the purchase of around 400 properties, including the acquisition of the commercial building Gran Vía 32, which now houses the Irish textile group, Primark’s, largest store in Spain. For this building, Pontegadea, the investment arm of Amancio Ortega, paid €400 million. Another key purchase featured Sfera’s premises on Calle Preciados, 4 (Madrid), for which the fund IVG Inmobilien AG paid €70 million.

The purchase of high street premises has accounted for 23% of all real estate investment in commercial assets (including shopping centres) say the experts at JLL. “If 2014 was characterised by the recovery of the commercial investment market, then 2015 has really consolidated that trend, with total investment of €2,669 million during the first nine months of the year, up by 46% compared with the previous year. We expect that 2015 will finish with a figure of almost €3,000 million”, explain the experts at JLL in their report. By nationality, Spaniards account for 40% of commercial investments (including the purchase of shopping centres), due to the significant investments made by the Socimis.

The intense competition for the purchase of commercial premises has forced many investors to start analysing operations beyond the main shopping streets in Madrid and Barcelona, according to the experts at the consultancy firm. “Although Madrid and Barcelona continue to be the main point of entry for international firms, the low yields (which now amount to around 4%), have caused many investors to show interest in other locations, where investment returns are higher”, they explain. One example of this, is the German fund Patrizia’s first foray into Spain, which acquired a commercial establishment in Málaga leased to H&M.

Rental prices

In the case of rental prices, the market for commercial premises is also showing strong results. Portal de L’Àngel in Barcelona is still the most expensive shopping street in Spain, with an average rent of €250/m2/month, followed by Preciados in Madrid, where rents have increased by more than 6% with respect to the same quarter in 2014, to reach €245/m2/month. “Moreover, the current availability rate is very low in areas such as the Puerta del Sol and Preciados, which are now at full occupancy again”, says JLL.

Following the grand opening of Primark in 2015, we can expect to see the inauguration of Adidas, Tous and Parfois on Madrid’s Gran Vía next year, as well as Céline and Massimo Dutti on the Paseo de Gracia in Barcelona. Moreover, the Japanese fashion house Uniqlo is going to open its first store in Spain, also on the Paseo de Gracia, at number 11, in premises measuring almost 5,000 m2.

Original story: Expansión (by R. R.)

Translation: Carmel Drake

Testa & International Funds Have Driven RE Inv’t In 2015

3 December 2015 – Expansión

According to the consultancy firm CBRE, investment in offices, commercial assets, hotels and logistics warehouses will amount to €13,000 million by the end of this year.

Real estate investment will close 2015 at record breaking levels. The arrival of international funds and the launch of the Socimis have driven the purchase of assets to levels exceeding even those seen at the height of the boom in 2007, and are expected to close the year with a total volume of €13,000 million. “2015 has not only seen a strengthening of the recovery that started in 2014, it has also seen growth of 25%, resulting in record levels (of investment)”, explains Mikel Marco-Gardoqui, Head of Investment at the real estate consultancy firm CBRE.

By type of asset, offices continue to be the preferred asset, but all of the sectors have experienced growth in 2015, according to the experts at CBRE. “All of the sectors, including offices and shopping centres, as well as hotels, have grown significantly this year and are now at record levels”, says Lola Martínez, Director of Market Analysis at CBRE.

By type of investor, 70% of the investment volumes have come from overseas investors, including those who have entered Spain by acquiring shares in Socimis.

Some the operations that have most boosted volumes include: the purchase of Testa by the Socimi Merlin Properties for €1,800 million, the acquisition of Torre Espacio by the Philippine businessman Andrew Tan for €558 million and the purchase of Gran Vía 32 by Amancio Ortega for €400 million.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

Savills: Bumper Crop Of RE Mega-Transactions In 2015

27 May 2015 – Cinco Días

Sales amounted to €1,340 million during the first three months of 2015.

“Lots of investors are interested in Spain” say Savills.

2015 is going to be a bumper crop year for large real estate transactions. Given the lethargy in the market in recent years, due to the economic crisis and lack of financing, the non-residential sector is experiencing the start of a new golden age. Investors do not want to miss out on the emerging recovery in the sector and showing their commitment to Spain.

Mega-transactions in Spain increased fivefold during the first quarter of the year with respect to the same period in the previous year, according to a report from the real estate consultancy Savills. During the first three months, these acquisitions (those over €100 million) amounted to €1,340 million and involved four purchases.

These large transactions accounted for 60% of all transactions. With respect to all types of transactions in the tertiary sector (including small deals as well), Spain is ranked fourth in terms of the increase in investment volume in the European market, which is led by the United Kingdom and Germany. This segment includes office buildings, retail stores, shopping centres, hotels, as well as logistics and industrial warehouses.

The largest transaction at the beginning of the year in Spain was the sale of the Puerto Venecia shopping centre for €451 million, which was purchased by the British company Intu Properties. That was followed by the purchase of the Madrid building at Gran Vía, 32, which houses shops such as H&M and Primark (from Autumn 2015), for €400 million. In that case, the purchaser was Pontegadea, the family office of Amancio Ortega, owner of Inditex, and the vendors were various investors led by the fund Drago Capital.

The third transaction was the sale of the Plenilunio shopping centre, for €375 million, purchased by Klepierre, the French store management company, from Orion Capital. Finally, in fourth place was General Electric’s real estate portfolio, which was sold to the fund Meridia for €120 million.

Better prices than in London and Paris

“Lots of investors are interested in Spain. Change is apace in the country and moreover, in other markets, such as in Paris and London, assets are more expensive. Private equity firms are now focusing on Southern Europe. Spain is the best candidate because a change in the cycle has begun and prices are still attractive”, says Luis Espadas, Director of Capital Markets at Savills.

Spain also benefits from the macroeconomic conditions in the market. The prospects for growth are positive in Europe, given the low oil prices, the injection of liquidity by the European Central Bank and the depreciation in the euro against the dollar, highlights the report. In fact, the volume of investment in commercial assets amounted to €49,700 million during the first three months on the European Continent, i.e. 38% higher than the average of the last five years.

“One of the factors that is making Spain more attractive is the price of assets, which are 40% lower than before the crisis. In other markets, prices are already very high. Moreover, the banks have started financing transactions again”, says Espadas. This report from the consulting firm predates the results of the municipal and regional elections and therefore the effect that the electoral swing to the left will have on institutions is unknown. With an exceptionally good start to 2015, the trend seen last year continues, when the record for this type of sales was broken, with transactions worth more than €7,000 million, a level not reached since 2008. “The arrival of Socimis (Listed real estate investment companies) has been one of the main factors driving this improvement in the market” says the report.

In Europe, the growth of these mega-transactions increased by 18% with respect to the first quarter of 2014. Investors in the UK, USA and Germany accounted for 62% of movements. The largest transaction in the sector was the purchase of a portfolio of student residences (halls) in the UK, for which the Canadian pension fund CPPIB paid €1,500 million. It was followed by the acquisition of Corio’s shopping centres in France following its merger with Klepierre. In Italy, the sovereign fund Qatar Holdings paid €1,000 million to the property developer Hines and the insurance company UnipolSai for 60% of the financial district Porta Nuova in Milan.

“Given the low interest rates and the ECB’s purchase program, real estate demand is going to continue to grow and volumes are expected to reach or exceed the levels seen in recent years, especially in the strongest markets such as Germany and France and those that are recovering, such as Spain, Ireland and Holland, says the report from Savills.

Original story: Cinco Días (by Alfonso Simón Ruiz)

Translation: Carmel Drake

Best Start To The Year For Real Estate Market Since 2010

6 February 2015 – El Economista

Investment activity in the non-residential real estate sector in Spain has started the year with the same strength with which it closed 2014. In just one month, investment has risen to almost €1,100 million, approximately equal to the total amount recorded during the first quarter last year, according to data published by Savills, the international real estate consultancy.

This has been the best start to the year for the real estate market since 2010 in terms of transaction volumes. Nevertheless, in terms of the number of transactions, the level has not been particularly noteworthy compared with other periods – as of yesterday, only nine deals had been closed.

“In January and February, we tend to see transactions left over from before the holidays being closed, however, the pipeline of investment transactions in retail and offices currently exceeds €2,000 million. We expect investment volumes to be similar to or even exceed those recorded in 2014”, said Luis Espadas, Director of Capital Markets for Savills España.

Two transactions have accounted for almost 80% of the total investment in 2015. Firstly, the sale of Gran Vía 32, which was acquired by Pontegadea for around €400 million, according to market sources and secondly, the Puerto Venecia shopping centre, which was sold for €451 million – the deal was announced at the end of the year, but was actually closed in January.

“Both transactions not only support the rising trend in mega-deals (those exceeding €100 million), which accounted for 2.5% of all transactions in 2011 and for 9% last year, they also far outweigh the size of the largest operations recorded in 2014. Moreover, Savills highlights that in each case, the transactions involved a single building, rather than portfolios (of buildings) like in 2014 (when the Junta de Andalucía sold 70 buildings for €300 million and Carrefour sold a portfolio for €350 million).

Success in the office market

Amongst other transactions, interest for the office segment in Madrid stands out once again. It broke records in 2014 for the highest number of transactions ever recorded, with 71 transactions; and which has started 2015 on the right foot. Five buildings were sold in two weeks, almost all located within the M-30.

“The shortage of high quality properties for sale in the business district and other urban areas diverted the search for opportunities towards well-established business centres outside of the M-30, although 75% of investment last year was located inside the periphery” explained Espadas.

Nevertheless, there is an increasing drive towards refurbishment “to add value to office blocks, particularly those that are well located, which are being used either as offices or for conversion into hotels and shops”, added Espadas.

Meanwhile, yesterday, the consultancy firm Irea published its report about investment in the real estate sector in 2014, a year in which direct transactions in real estate assets tripled. Such investments accounted for €9,660 million worth of transactions, out of a total investment volume in the sector of €23,028 million, compared with €5,344 million in 2013.

Original story: El Economista (by A. Brualla)

Translation: Carmel Drake

Mexican Investor Buys Gran Vía 14 For €21m

3 February 2015 – Expansión

A private Mexican investor has acquired the building located at number 14, Gran Vía, Madrid for €21 million. The property currently houses the Madrid Institute of Family and Children.

The property consultant CBRE advised on the transaction for the sale of the property, which is currently leased to the Community of Madrid and has a surface area of 4,600 square metres.

According to Miguel Fuster, CBRE’s Investment Director, this acquisition reflects the strategy being adopted by investors of acquiring assets in strategic locations that have clear potential for rental growth and the possible repositioning of the assets.

In fact, the pressure on prices is generating a clear, positive expectation in terms of rental growth and a recovery in the rental sector, he added.

This transaction consolidates last year’s trend in terms of investment, which reached record levels, and was the third deal that CBRE advised on in January; it also advised on the sales of BMW’s headquarters and Castellana, 77, also known as the Torre Saint Gobain.

Ortega acquired Gran Vía, 32

Recently, Amancio Ortega, bought the landmark building on Gran Via, 32, through his investment vehicle, Pontegadea. The property, which will house Primark’s future flagship store in Spain is currently leased to retail brands such as H&M, Mango and Lefties (Inditex Group), as well as companies such as the Prisa Group.

Original story: Expansión

Translation: Carmel Drake