Pontegadea, the family office group of Spanish retail magnate Amancio Ortega, best-known for owning fashion retailer Zara, appears determined to construct the biggest privately-owned property profile in the world.
Just this month, Pontegadea added to Ortega’s global real estate empire by buying London’s iconic Adelphi building for £550 million ($700 million), picking up blue-chip tenants Spotify, Conde Nast and The Economist in the process. As property aficionados, Pontegadea’s investment was widely acclaimed as a vote of confidence in UK commercial real estate, with their Mayfair-based office saying they did “not expect Brexit to have a significant impact” because they are a “long-term investor in prime locations.”
Pontegadea is estimated to own a combined property portfolio worth $8 billion
Ortega, 81, is listed by Forbes as the world’s sixth richest man with total wealth placed at $70 billion. A big part of that wealth is property, with Pontegadea estimated to own a combined property portfolio worth $8 billion, representing just over 10% of a fortune which originated when he co-founded retail giant Inditex, owners of Zara, in 1975.
The majority of Ortega’s fortune is derived from his 59.3% stake in Inditex, the world’s largest clothing retailer. He controls his stake through Spanish-based holding companies Pontegadea Inversiones and Partler. Ortega’s property arm, Pontegadea Real Estate, forms part of this business conglomerate.
Ortega controls his companies through his family as well as trusted lieutenants. Pontegadea Inversiones’s first vice-president is his wife Flora Pérez with consigliere José Arnau as second vice-president. Marta Ortega Perez, Ortega’s youngest daughter, is also a senior executive in the business, and many expect she will succeed her father. His preference for Perez is reinforced by a wry observation that: “The problem of succession anywhere in the world arises from the fact that not all legal heirs are suitable”.
Strategy and prominent buildings
Based in Arteixo in Spain’s north-west, Inditex generates annual dividends of between $400 million and $1.2 billion a year. Pontegadea Real Estate invests a proportion of this primarily in flagship office and retail premises located in prime districts around the globe where a steady, reliable income stream is available.
The primary markets are Spain, mostly in Madrid and Barcelona; the UK (London), the US (Miami, New York) Mexico, Canada, France (Paris and Cannes), Portugal, Germany, Italy, and South Korea.
Robert Cibeira, CEO of Pontegadea Real Estate, oversees the real estate arm globally and is a long-serving employee of Ortega who previously worked at Arthur Anderson in the 1990s. The local property portfolio includes No. 32 on the Spanish capital’s main shopping street Gran Vía as well as Torre Foster, Torre Picasso, and several buildings along La Castellana, another avenue in Madrid.
In London, Pontegadea’s UK subsidiary is headed up by Manuel Criado Romero, another qualified accountant who has been with Ortega’s business empire since 2012, having previously held senior posts at another family office and in private equity.
“I am the property of my business, not the reverse…” – Amancio Ortega
In addition to acquiring the Adelphi, Pontegadea owns retail and commercial sites across London such as stores on Oxford Street, Devonshire House and the Rio Tinto headquarters. The value of this portfolio rose to £2.1 billion at the end of 2017 with rental income of £68.3 million.
In the US, the Pontegadea estate includes the five-story, 79-foot tall, E.V. Haughwout commercial loft building in the SoHo neighbourhood of Manhattan. In 2016, the family office purchased for $517 million he Southeast Financial Centre in Miami. Marcos Fernandez Martinez heads up Pontegadea USA’s headquarters in Florida and has run the Americas division, which covers the US, Mexico, and Canada for over 8 years, having formerly been at Spanish Bank Caixa Galicia.
Other centres of investment include Paris and Cannes, where managing director Yohann Floc’h has been with Pontegadea for over 8 years, having cut his teeth at BNP Paribas Private Banking and Real Estate. In 2016, Ortega made his first venture into Asia, buying M Plaza commercial complex in Seoul.
The media-shy Ortega, he has never given an interview to any media outlet, once said: “I am the property of my business, not the reverse”.
With one of the biggest property holdings in the world, it’s fair to say: for Ortega a substantial proportion of that business is property.