Inditex Partners with Bain for €65 Million Land Acquisition in Spain

Inditex finally gets a plot in Sagunt (Valencia) to install its new logistics base. The Spanish fashion retail giant has signed the purchase of an area of 4,109,704 square feet in Parc Sagunt II for €65 million, El Confidencial reported on Tuesday.

The process of commercialization of the land began last August, with a minimum starting price of €160 million. Inditex, through the company Alveston ITG, was the only one to bid in the auction for one of the seven lots that were put up for sale. The transaction, already formalized, amounts to €78 million if VAT is added.

Inditex intends to create in the industrial complex located next to the Valencian city one of its new logistics bases in the Mediterranean arc. For the moment, the giant has not clarified which of its proposals (including Zara, Pull&Bear, Massimo Dutti, Bershka, Stradivarius, Oysho, Zara Home or Lefties) will be installed on the platform.

Inditex set up a limited company last year with which it has structured the operation

Alveston ITG, the limited company used by Inditex in this operation, was created last year in Madrid. This company has as its ultimate parent an Irish company controlled by the investment fund Bain Capital and the Catalan developer Conren Tramway, with a minority stake. Both have an alliance for the development of logistics projects in Spain.

The land on which the future Inditex site will be located belongs to Espais Econòmics Empresarials (EEE), 50% owned by the Generalitat Valenciana and the Sociedad Estatal de Promoción Industrial y Desarrollo Empresarial (Sepides).

The plot to be occupied by the Spanish group was initially reserved for suppliers of the gigafactory that PowerCo is building in the same industrial complex. However, the land was put up for sale again due to the lack of medium-term commitments from the suppliers of the Volkswagen Group’s battery factory. For the time being, only the Inditex site has been sold.

The reinforcement of logistics is one of the key axes in the growth strategy of the fashion retail group. Last year, Inditex started up a distribution center in Zaragoza, which is now fully operational. With a surface area of 3,078,478 square feet, the center has more than doubled its logistics capacity in the area, as well as becoming the fifth distribution center for its flagship store, Zara, and the company’s second in Zaragoza.

The Zaragoza center will be joined by the construction of a logistics center in Valencia for Tempe, the company’s footwear subsidiary. And the third major corporate move planned by the company is the future relocation of four of its chain headquarters to Sant Adrià del Besòs, much closer to Barcelona.

Inditex closed the third quarter of the current fiscal year pointing to a clear recovery after a weak start to the year. The company ended the period, between August and October last year, with an increase in sales of 4.88% to €9.81 billion. The group posted its highest gross margin in the last decade, at 62.2%.