24 July 2017 – Expansión
A portfolio worth €6,719 million containing assets spread over markets as diverse as Spain, Canada, the United Kingdom and Korea. That summarises the real estate activity of Amancio Ortega, founder and majority shareholder of the textile giant Inditex.
The fourth richest man in the world (exceeded in the ranking only by Bill Gates, Warren Buffet and Jeff Bezos), with a fortune worth $80,400 million according to Forbes, has allocated most of the revenues obtained from the annual dividend he has received from Inditex for the last two decades, to creating one of the largest personal real estate portfolios in the world. Through his firm Pontegadea Inmobiliaria, Ortega has acquired buildings, primarily offices and retail premises, located in a multitude of markets.
In 2016, Ortega starred in the largest purchase of an office building in Spain, by paying €490 million for Torre Foster, one of the skyscrapers that forms part of the Cuatro Torres de la Castellana complex in Madrid. Months before, Pontegadea Inmobiliaria made its debut in South Korea when it acquired the M Plaza commercial complex. For both properties, Ortega’s company spent €662 million in total, according to the most recent results presented by the company.
Also in 2016, Inditex’s largest shareholder spent around €129 million on a building in San Francisco (USA).
These investments allowed Pontegadea Inmobiliaria to increase its total asset volume by €661 million in 12 months. At the end of 2016, the company owned net assets worth €6,475 million, up by €373 million compared to the previous year.
Despite this increase in assets, Pontegadea’s revenues and profits decreased last year. Revenues amounted to €120 million, compared to €129 million in 2015. Nevertheless, the gross operating profit rose slightly in 2016 to €102 million, compared with €101 million a year earlier. Last year, Pontegadea’s profit amounted to €72 million, down by 30%. The company attributes this decrease (the second consecutive fall, given that it earned €182 million in 2014) to “currency fluctuations”, which “generated negative exchange rate differences of €19 million, concentrated primarily in the variation of the value of the pound sterling”.
The British real estate market is one of Pontegadea’s favourite destinations. In London alone, Ortega’s property arm has invested at least €3,000 million. Some of its properties include Rio Tinto’s headquarters, acquired for €335 million in 2015 and Devonshire House, for which it paid €480 million in 2013. In March, Pontegadea covered a €114 million capital increase of its British subsidiary (Pontegadea UK).
In Spain, in addition to Torre Foster, also known as Torre Cepsa thanks to its tenant, Pontegadea also owns Torre Picasso, Gran Vía 32 and several buildings along La Castellana.
Ortega’s property arm forms part of the business conglomerate that the founder of Inditex has controlled for several years through Pontegadea Inversiones. That company, which groups together its majority stake in the textile group (59.29% in total), recorded revenues of €23,649 million in 2016, compared with €21,234 million a year earlier. Last year, the company’s profit amounted to €3,277 million, up by 8.3% compared to the previous year.
Original story: Expansión (by Rocío Ruiz)
Translation: Carmel Drake