Zara billionaire closes on London office for €707m

Spanish retail billionaire Amancio Ortega, former chairman and majority shareholder of Inditex group, is reportedly close to a deal to acquire The Post Building in London for around £600 mln (€707 mln).

The asset is being sold by a joint venture between Oxford Properties and Brockton Capital.

Executed via Ortega's real estate investment vehicle Pontegadea, the deal comprises a 320,000 ft2 (30,700 m2) development in a former Royal Mail sorting office in Holborn. It is let to tenants including financial group McKinsey, Rothesay Life and Nationwide.

The deal follows the group's push into Seattle a few weeks ago, securing an office used by Facebook for $415 mln (€374 mln) and a multi-let property that includes Amazon's headquarters for $740 mln.

Oxford and Brockton appointed JLL earlier this year to advise on the sale of the asset, as part of the Canadian firm's continued shift away from London offices. Oxford sold a 50% stake in the Cheesegrater in 2017 plus stakes in MidCity Place, Paternoster Square and Watermark Place, raising some £1.2 bn for its growing build-to-rent (BTR) and logistics strategy.

Last year, Oxford invested in a series of logistics funds launched by Singapore-listed Global Logistics Portfolio (GLP), and formed a joint venture with Delancey called Delancey Oxford Residential (DOOR) to back a £600 mln drive into UK BTR assets.

Reclusive billionaire Ortega stepped down as Inditex chairman in 2011, but still holds a 59% stake in the group, whose labels include Zara, Bershka, and Massimo Dutti. It is understood he now re-invests almost all his Inditex dividends in real estate, via Pontegadea.

Pontegadea's real estate portfolio totalled just under €10 bn at the end of last year. The property empire currently spans nine countries - the UK, France Italy, Spain, Portugal, Canada, Mexico, South Korean and the US.

Ortega has favoured commercial property over residential assets to date, with a focus on blue chip tenants. He is the largest landlord of Oxford Street in London as well as a major owner of office and hotel assets, including the headquarters of The Economist, which he bought in 2018 for £600 mln. Last year he also moved into telecoms infrastructure, acquiring a 10% stake in Telxius.

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