Business

Zara boss Amancio Ortega pours €100 million into real estate business

The fashion magnate's property holdings in Spain are worth more than €1.6 billion

A building owned by Pontegadea in London on Oxford Street, which houses a Primark clothing store.
A building owned by Pontegadea in London on Oxford Street, which houses a Primark clothing store.Peter Macdiarmid / Getty Images

Spanish billionaire and founder of the Inditex fashion empire Amancio Ortega has pumped €100 million in capital into the Spanish arm of his real estate business Pontegadea España, according to information published in the Central Mercantile Register (BORME) on Tuesday.

Pontegadea Inmobiliaria closed 2016 with real estate assets worth more than €6.7 billion

In November, Ortega reorganized his global real estate company Pontegadea Inmobiliaria, creating a new subsidiary for Spanish properties with the company name Torre Norte Castellana, which was later renamed Pontegadea España. This new subsidiary will be responsible for the majority of Ortega’s real estate business in Spain, which is valued at more than €1.6 billion, and includes properties like Madrid's Torre Cepsa tower, designed by UK architect Norman Foster.

Pontegadea Inmobiliaria, which closed 2016 with real estate assets worth more than €6.7 billion, will hand off almost all of the Inditex’s founders’ real estate business in the Spanish market to the subsidiary Pontegadea España.

Meanwhile, the real estate business Partler 2006, which falls under the umbrella of the Pontegadea group and is shareholder of 9.284% of Inditex, has merged by absorption with RL30 Inversiones, the owner of building number 32 on Madrid’s famous Gran Vía street, which houses one of the largest European stores of Irish clothing chain Primark.

Sources close to the matter told Europe Press in November that the reorganization was a legal formality to simplify management of the company’s fast-growing business. Pontegadea Inmobiliaria already has separate companies in the United States, France, United Kingdom and Korea which are dedicated to managing the property business in each country. According to those sources, the aim is to create a “more homogeneous” structure in all the markets where Pontegadea Inmobiliaria is present.

Name change

Ortega, the founder of Inditex, the parent company of clothing chain Zara, did not need to create a new company to manage its Spanish real estate business. It already had one – Torre Norte Castellana, the owner of Torre Cepsa tower, which it acquired last year, meaning it only had to change its name to Pontegadea España.

As well as the Torre Cepsa tower, which was bought for €490 million, and building 32 on Gran Vía street, Ortega’s property holdings also include iconic buildings in Madrid like the Torre Picasso tower and building 79 on the Paseo de la Castellana avenue, which houses the largest Zara clothing store in the world.

The Pontegadea group controls owns  property in the UK, Asisa, US and France

In 2017, the founder and major shareholder of Inditex invested a total of €1.26 billion in company dividends through Pontegadea Inversiones and Partler 2006. In 2016, Ortega invested €1.11 billion.

Ortega closed 2016 with real estate assets worth €6.72 billion, up €661 million from the previous year. These are grouped under Pontegadea Inmobiliaria – a company that has a net worth of €6.48 billion, up from €5.46 billion the previous year.

The business tycoon, who invests most of his Inditex share dividends in the real estate sector, has the largest property portfolio in Spain – one dedicated to purchasing and renting big buildings, primarily non-residential office buildings, in the center of major cities in Spain, the United Kingdom, France, the United States and Asia.

English version by Melissa Kitson.

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