Spanish billionaire closing in on £600m office deal
Amancio Ortego, who is the founder of Inditex, the retailer behind brands including Zara and Massimo Dutto, is close to acquiring London’s Post Building.
It is expected that a formal announcement will be confirmed soon about the transaction, which was purchased through Pontegadea. This is Ortega’s real estate investment vehicle, which holds a majority stake in Inditex with the dividend’s used to purchase additional property.
In the past year, Pontegadea has also purchased the headquarters of The Economist, the Adelphi building, for approximately £600m as well.
What is The Post Building?
The Post Building was previously a sorting office owned by the Royal Mail and is now a complex redeveloped by Brockton Capital and Oxford Properties.
A large proportion of The Post Building is now office space, let out to companies such as McKinsey and the life insurance company Rothesay Life.
Increased demand for office space in West End
The acquisition by Pontegadea is another reminder that demand continues for office space in London, especially in the West End.
According to Savill’s the take up of space in the area is predicted to be 2 percent ahead of the long-term average. In addition, a quarter of its developments for the next four years have already been pre-let.
What is causing the spike in interest in London office space?
The renewed interest in office space in the West End has been attributed to demand from serviced office suppliers, as well as the financial and media sectors.
In addition, geopolitical tensions elsewhere in Asia have also led overseas buyers to once again express interest in the capital, viewing it as a potential safe haven.
West End retail space experience decline in demand
Whilst office space in the West End is very much sought-after, the same cannot be said for the retail sector.
For example, one of the biggest landlords in the West End, Shaftesbury, announced that its portfolio value had dropped for the first time in well over a decade. This is due to valuations dropping in Covent Garden – which is just minutes away from the Post Building.