Business

Zara founder, Amancio Ortega, spends hundreds of millions of dollars on US warehouses

The pandemic has rapidly changed the way people spend their money and the impact is still spreading in the global economy in unpredictable ways.

Some big companies tried to find enough warehouse space while others are scaling down their operations.

This week, Amancio Ortega, the founder of Spain-based fast fashion retailer Zara and one of the richest people in the world, expressed confidence that warehousing will remain big business after when buying many large logistics facilities in the US. million, located in Tennessee, South Carolina, Virginia, Pennsylvania and Texas, as reported by Spain El Pais.

Ortega’s family investment company, Pontegadea, purchased the property from real estate brokerage Realty Income. Amazon, Nestle, FedEx is one of the tenants.

Pontegadea’s purchases this week follow a separate deal it announced last week in which it buys a logistics center in Pennsylvania extra $148 million. Earlier this year, the company acquired a smaller center in Wisconsin for $35 million.

Over the past few years, Warehousing is still a hot marketwith retailers needing more space than usual to accommodate growing demand for merchandise as the pandemic shifts spending away from services like entertainment and restaurants.

In line with broader real estate trends, warehouse owners can charge higher rents, with vacancy rates remaining low. However, persistently high inflation and a slow return to pre-pandemic spending behavior have led some experts to wonder if those trends could soon reverse.

Ortega’s recent warehouse investments follow reports earlier this month that Amazon plans to shrink its delivery operations by closing dozens of facilities and killing plans to build more. Those plans come later Amazon CEO Andy Jassy stated in the company first quarter earnings report in April that it would soon cut back on pandemic-related expansion, stating that the company “no longer pursues physical or personnel capacity.”

In the second quarter, Amazon’s workforce dropped by about 100,000 employees, the largest contraction in the company’s history.

This year, other major retailers include Walmart, Target, Bed Bath & Beyond All reported that they were dealing with higher than normal inventory levels, signaling that their warehouse space needs are likely to decline. lasting this time.

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