Tag: Longshore

27 January 2015 – Cinco Días

Amancio Ortega will be the landlord of one of Inditex’s competitors, the Primark Group. The founder of Zara has acquired Gran Vía, 32, the building in Madrid where the Irish company will open its flagship store in Spain.

A consortium of funds comprising PSP, APG, Phoenix Group and Sun Capital, led by Drago Capital, has announced the sale of Gran Vía 32 to Pontegadea, the real estate company owned by Amancio Ortega. PSP Investments – the public pension fund of the Canadian armed forces and one of the largest pension managers in this country – holds a 50% stake in Longshore (the company that currently owns the building); the management team of Drago Capital, the company that manages the assets, also holds a minority stake. The remaining 50% is owned by the real estate investment fund Drago Real Estate Partners, in which a number of companies hold stakes, including the Dutch firm APG (the largest pension fund in Europe), the British insurance group Phoenix Group (formerly Pearl Assurance) and the British investment company Sun Capital Partners.

Previously, the building was owned by Grupo Prisa, which sold the property to Drago Real Estate in 2008.

Spokemen of the various companies involved in the sale were not willing to disclose the amount paid, but sector sources estimate that the price would be around €400 million.

The building on Gran Vía 32 has a total floor space area of 36,376 square metres, divided into nine floors above ground, plus the ground floor and basement.

Four of the largest fashion companies in the world will share the building, and its new landlord, in Madrid. Gran Vía 32 already houses H&M, Mango and Lefties (Inditex) stores. The Irish chain Primark plans to open its largest store in Spain in the building at the end of this year, where it will have 9,000 square metres of retail space across three floors.

Primark is owned by the Associated British Foods group and now has 41 stores in Spain, after entering the market in 2006.

Madrid, Barcelona, London

Pontegadea, a company that also receives dividend income that Amancio Ortega earns from Inditex, recorded a profit of €93.3 million in 2013, an increase of 32% compared with 2012, according to information published in the El País newspaper last August, based on data extracted from the company’s accounts filed at the Commercial Registry.

The company recorded rental income of €98.5 million, an increase of €4.3 million. The volume of assets on its balance sheet amounted to €4,519.5 million. The company reduced its bank debt by €73.8 million down to €325.1 million.

In recent years, Amancio Ortega has invested in property in Madrid, Barcelona and London, although he has also done business in New York.

Pontegadea owns several landmark properties, including the Torre Picasso in Madrid, which it acquired at the end of 2011 from the FCC group for €400 million; and a building located on Manhattan’s West Side, which it bought at the end of 2013 for €69 million.

Last year, Pontegadea purchased two buildings from Sareb – the property that used to house the headquarters of Banesto, in Plaza Cataluyna, Barcelona, for €44 million and the building that houses the Apple store in Valencia, for €23.5 million.

Recently, it also purchased Rio Tinto’s headquarters in London. At the beginning of 2013, it completed the purchase of Devonshire House, in London, a building that houses 16,000 square metres of offices and retail space. In 2006, it bought another building in London, 100 Wood Street, for GBP 140 million and in 2011, it acquired an office building on Oxford Street for GBP 220 million.

Original story: Cinco Días (by Alberto Ortín Ramón)

Translation: Carmel Drake