The family office building a huge property portfolio

Oxford Street, London, where Ortega has a large property holding.  Photo: Wikemedia, Ysangkok
Oxford Street, London, where Ortega has a large property holding.  Photo: Wikemedia, Ysangkok

A family investment group linked to Amancio Ortega, the world’s second-wealthiest individual, is building one of the biggest privately controlled property portfolios in the world, with the latest acquisition in November worth a cool half a billion dollars.

Ortega’s two main investment groups – Pontegadea Real Estate and Pontegadea Investments – are estimated to own a property portfolio worth around $7 billion. At the end of 2015, Pontegadea Real Estate was reported to have total assets of €6 billion, according to accounts filed by the group and reported in the Spanish press. But since then the investment group have purchased at least another €500 million worth of property, with the latest acquisition of a Miami tower block worth $500 million (€469.6 million), according to reports. Another big buy for Pontegadea this year was a New York City hotel costing $67.6 million.

Ortega, whose fortune was made through his fashion empire Inditex, best known for its Zara brand, is estimated by Forbes to be worth $67 billion, making him the second wealthiest man in the world, behind Bill Gates. To better understand just how big Ortega’s property empire is, just on the basis of his portfolio through Pontegadea Real Estate and groups linked to it, he would be the 13th wealthiest property owner in the world, according to the property fortunes listed by the Forbes Rich List.

Reports say – Ortega has never once given a media interview, and his staff at Inditex and Pontegadea very rarely talk to the media – the Spanish billionaire appears to be just as adept at property investment as he is in the world of retail. Allegedly Ortega always pays cash for his property purchases, which helps to ensure he gets some of the best deals around. Many of these deals are at institutional level amounts and so Pontegadea is often competing with some of the world’s biggest sovereign wealth funds and pension groups to acquire the best of prime commercial property in the most expensive cities around the world.

Pontegadea real estate arm is overseen by Roberto Cibeira, one of Ortega’s long-term trusted lieutenants. Ortega is known to reward loyalty and many of his staff at all levels like Cibeira have been with one of his various companies for ten years and more. The real estate arm, which is based in the same complex as Inditex in the northern Spanish town of Arteixo, has offices in a number of cities including Miami, Paris, and London – and each one of these offices is staffed by a top real estate expert.

Ortega’s preference for real estate investing is likely to be driven by the long-term stability the asset class gives. It offers a good counterweight to the sometimes fickleness of the global fashion retail world, although Inditex has been perhaps the most successful of all fashion groups in dealing with this fickleness and continuing to prosper. Pontegadea investments in other areas like private and public equity is less well known about – with no accounts of investments in either asset category.