Zara founder Amancio Ortega spends hundreds of millions on US warehouses
The pandemic quickly changed the way people spent their money, and the impact is still rippling through the global economy in unpredictable ways.
Some large companies are scrambling to find enough warehouse space while others are scaling back operations.
This week, Amancio Ortega, founder of Spain-based fast fashion retailer Zara and one of the world’s richest people, showed his faith that warehousing will remain big business after buying several major logistics properties in the United States. United. The warehouses, which cost a reported $722 million, are located in Tennessee, South Carolina, Virginia, Pennsylvania and Texas, according to reports from Spain El País.
Ortega’s family investment company, Pontegadea, purchased the properties from real estate brokerage firm Realty Income. Amazon, Nestlé and FedEx are among the tenants.
Pontegadea’s purchases this week follow a separate deal announced last week in which it bought a logistics center in Pennsylvania for an additional $148 million. Earlier this year, the company acquired a small center in Wisconsin for $35 million.
Over the past few years, warehousing has remained a hot market as retailers need more space than usual to meet increased demand for goods as the pandemic has diverted spending from services like entertainment and restaurants.
In line with broader real estate trends, warehouse owners have been able to charge higher rental rates as vacancy rates remain low. However, persistently high inflation and a slow return to pre-pandemic spending behavior have some experts wondering if these trends may soon reverse.
Ortega’s recent investments in warehouses follow reports earlier this month that Amazon plans to scale back its delivery operations by closing dozens of facilities and killing plans to build more. The plans come after Amazon CEO Andy Jassy announced in the company’s first-quarter earnings report in April that it would soon scale back pandemic-related expansions in its operations, saying the company “no longer seeks physical ability or staffing”.
In the second quarter, Amazon’s workforce shrank by about 100,000 employees in what is the largest contraction in the company’s history.
This year, other major retailers including Walmart, Target and Bed Bath & Beyond have all reported that they are dealing with higher than normal inventory levels, signaling that their need for warehouse space will expand. probably for now.
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