From Gran Vía to Park Avenue: the real estate investments by Amancio Ortega con Pontegadea

Pontegadea has made a strong start to 2022. At the beginning of the year, the company that manages the assets of Amancio Ortega closed the purchase of an emblematic property in Canada for 1,150 million Canadian dollars (€850M), the Royal Bank Plaza in Toronto. Located in the financial district of the city, the complex of more than 100,000m2 consists of two towers, one of them 180 meters high, which house the offices of the Royal Bank of Canada, the largest bank in Canada.

This is the largest real estate operation of the Ortega family office and one of the largest since the start of the pandemic in March 2020. With this property, Pontegadea expands its presence in Canada, where in 2016 it already bought the historic building number 777 on Sainte-Catherine street, in Montreal. And, in 2014, he bought 150 Bloor Street in Toronto for 255 million euros.

This purchase, that of the Royal Bank Plaza, serves Pontegadea to exhibit muscle after 2020 closed as one of its worst exercises. That year, the company obtained a net profit of 666 million euros, 62.5% less than the 1,778 million euros of 2019. The rise of teleworking and covid 19 represent two great challenges for the office market, but The acquisition of the new asset in Toronto demonstrates Ortega's confidence in this market.

What are the properties of Pontegadea

Focused on the sale and rental of large buildings for commercial or office use, Pontegadea is the largest real estate company in Spain with a portfolio valued at 14,075 million euros at the end of 2020. Founded in 2001, it receives part of the dividends that Ortega obtains from Inditex and reinvests them in other sectors such as energy, telecommunications or real estate. In 2021, the businessman received 1,300 million in dividends from the textile giant.

His real estate strategy involves acquiring non-residential office buildings in city centers in Europe, North America and Asia. In Madrid, the company owns Torre Picasso, Torre Cepsa and Gran Vía, 32, where the main Primark store in Spain is located. Some of the tenants of Torre Picasso are Accenture, Google, Paypal, Intel or Deloitte.

Other properties in Madrid are numbers 24, 35, 92 and 79 of Paseo de la Castellana. Meanwhile, in Barcelona, ​​it owns number 5 Paseo de Gracia and another building where the App Store is located on that emblematic street.

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London is another strategic point for Pontegadea. In the British capital, it owns the Adelphi buildings —with tenants such as Spotify, Shiseido or The Economist—, the Post Building —where the McKinsey headquarters are located—, Oxford Street —with Primark as a tenant—, Almack House, Lumina House and the building where the headquarters of the Río Tinto mining company are located. The purchase of Adelphi, for 680 million euros, was the largest Pontegadea had made until the recent acquisition of the Royal Bank Plaza complex. In the United Kingdom, the Ortega family office manages real estate assets worth 2,284 million pounds at the end of 2020.

United States too. In Seattle it has the Troy Block, where one of the Amazon headquarters is located; and the Arbor Bocks, where one of Facebook's headquarters is located. In New York he has the Haughwout Building, at 490 Broadway Street; 414 West 14th Street, in western Manhattan; and Murray Hill, located in the Park Avenue area.

Other buildings in the United States are the Eurostars Magnificent Mile Hotel (Chicago), the Esquire Theater (Chicago), the Gucci Building (Los Angeles), a series of buildings between 1001 and 1035 Lincoln Road (Miami), the Southeast Financial Center (Miami) and 815 Connecticut Avenue (Washington).

In Paris she owns the building located at 12 Rue Halévy, where an Apple Store is located, while in Seoul she owns the M Plaza building, about 27,000 square meters.

Diversification outside of real estate

Pontegadea has had real estate as its main business since its creation in 2001. But since 2018 it has begun a process of diversification towards telecommunications and energy. That year it acquired a 10% stake in Telxius, Telefónica's telecommunications infrastructure company, for 378.8 million.

This diversification continued in the 2019-2021 period with its investments in Enagás, Red Eléctrica Española (REE) and Redes Energéticas Nacionais (REN). In 2019, it acquired 5% of Enagás, the company that manages gas infrastructures in Spain. And, during 2021, it bought 5% of REE and 12% of REN, two companies that manage the electricity transmission and distribution systems in Spain and Portugal.

Her latest foray has been in renewables. At the end of 2021, Ortega's company closed an agreement with Repsol to acquire 49% of the delta wind farm, located in the province of Zaragoza. With this action, Pontegadea enters the renewables, a sector that is expected to be the destination of many items of European recovery funds.