Zara’s billionaire Amancio Ortega moves from retail to real-estate

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Amancio Ortega (L) and his daughter Marta Ortega. Photo: AFP/Getty Images

Today it’s clearer than ever why Spain’s richest man, Amancio Ortega, stepped down as chairman of Inditex, best known for clothing giant Zara, in 2011: to focus on money-making real-estate business around the world, from New York to Madrid. While his passion for the sector isn’t new, Ortega has sealed fresh acquisitions over the past month — the total value of which is nearly $850 million.

His latest real-estate shopping spree began in early December when he closed a deal to buy a 56,000-square-foot office and retail building in New York City’s Meatpacking District for $94 million (located on 414 West 14th Street). Later in the month he bought a historic building in London’s West End for $670 million — outbidding wealthy oil-based investors from UAE or Qatar. The Devonshire House on Piccadilly — residence of the Dukes of Devonshire in the 18th and 19th centuries; today an office building — sits opposite the Ritz hotel in a neighborhood frequented by hedge-funders.

In his desire to acquire more and more spaces and buildings, Ortega is completely focused on his real-estate arm, Pontegadea Invesiones SL, through which he signs the deals. Since the beginning of the new year the billionaire’s moves have proven that his real-estate aspiration is only going to grow further: on January 10 he purchased the building that houses the Apple store in Valencia, Spain, for $31.2 million. Days earlier he had acquired an emblematic building in Barcelona’s central circle Plaza Cataluña for $60.1 million. The deal adds to Apple’s 15-year lease on the ground floor store, which he had bought in 2012. His interest in owning buildings in which the tech giant has a branch – a specialization, you might say, in his real-estate collection – is topped off with his Paris fortress, the Carrousel du Louvre shopping mall.

The strategy the world’s third-wealthiest person, with a new worth of $57 billion according to Forbes, follows is clear and direct: prime location and long-term rent contracts which he is almost guaranteed to find from high-end renters (like Google and Apple). He displayed this philosophy when in 2011 he purchased the iconic Torre Picasso, a 43-story skyscraper in Madrid, or when in 2009 he acquired the upscale waterfront Epic Residences & Hotel in Miami.

Ortega obviously sees no real-estate bubble — the economic ill that brought Spain, his home country from where he has built his empire along with his former wife Rosalía Mera who passed away last year, into the fragile state it is in today. But he knows his assets well and believes in real-estate as the area to concentrate in, be it commercial, residential or industrial. He’s well aware that his wealth — his net worth is up from $37.5 billion in March 2012 - is consistently growing principally due to the revenue from leases.

Ortega’s master business plan may be only shaping up. Rome, Chicago or Mexico City all now host acquisitions of his. So stay tuned to what city, and building, will be next.