Zara founder Amancio Ortega pays £600M for McKinsey’s HQ in UK

Location map from Brockton Capitral and Oxfrod Properties’ PostBuilding.com website.

Amancio Ortega’s property vehicle, Pontegadea Inmobiliaria, has finalised the purchase of London’s Post Building for c. €703 million euros according to Spain’s Expansion newspaper.

Located in the center of London, the property’s main tenant is global consultancy firm McKinsey & Co which signed its lease in 2017. Other tenants include Rothesay Life insurance firm and QuantumBlack software company. The asset – once a Royal Mail sorting office – was redeveloped by Brockton Capital and Oxford Properties, the real estate investment arm OMERS. one of Canada’s largest defined benefit pension plans.

BBC broadcaster Robert Elms has described the location as “surrounded by a deep well of history on all sides, yet at the very epicentre of the buzz of contemporary life.”

London is a sought after location for the Spanish property fund which already has over €2.3 billion invested in assets such as the Devonshire House in Picadilly, several Zara stores in Oxford Street or the Adelphi building, the art deco headquarters of The Economist, which it bought for c. €680m in 2018.

The Galician billionaire has a property portfolio worth over €10 billion and announced in November the purchase of two more office buildings, in Seattle (USA) for 415 million dollars (c. €375 million) which are let to Facebook.

According to research from Savills, there has been growing demand for office space in London’s West End over the last year with take-up of space expected to be 2% ahead of the long-term average in 2019.

The effect of Brexit uncertainty has had an effect on pricing and according to property firm Astorga Real Estate Partners, there has been “a resurgence of interest in London offices and residential assets among Spanish investors during the last half of the year»