Corporate overview
PATRIZIA: A leading partner for global real assets
With operations around the world, PATRIZIA has been offering investment opportunities in real estate and infrastructure assets for institutional, semi-professional and private investors for 40 years. PATRIZIA manages approx. EUR 57 billion in assets and employs around 1,000 professionals at 28 locations worldwide. PATRIZIA has been making an impact since 1984 by helping children in need, since 1992 in close collaboration with Bunter Kreis (“colourful circle”) in Germany for aftercare of children with severe diseases and since 1999 through its support for the PATRIZIA Foundation. The PATRIZIA Foundation has given more than 600,000 children and young people worldwide access to education, healthcare, and a safe home to get the chance to live a better self-determined life over the last 25 years. You can find further information at www.patrizia.ag and www.patrizia.foundation
Investment principles & strategy
One-stop shop
PATRIZIA is a leading partner for global real assets. It offers a range of compelling products and formats, covering the full risk spectrum from core to opportunistic, and across sectors and countries. Our extensive on-the-ground presence means that we can offer investors a unique set of opportunities, at the right time. Whatever the style of investment, we approach it as our clients’ fiduciary.
Long-term partnerships built on trust
PATRIZIA has over 500 valued clients from 34 countries and five continents, and over 50% of these are repeat investors. Some of our client relationships go back over 30 years, a reflection of a personal and trustworthy service provision, across investment strategies and formats. Governance, transparency and performance are at the heart of PATRIZIA’s approach to its client partnerships.
Tried-and-tested approach
Our industry-leading data intelligence research capability and extensive local teams enable us to combine top-down, strategic ideas with bottom-up, deal-driven stock selection. We only invest where we have people ‘on the ground’. 1,000+ investment professionals work for PATRIZIA across the globe. We believe in active asset management to enhance income and preserve capital. When appropriate, we commit to disciplined, timely asset sales.
Sector forecasts
INDUSTRIAL: The industrial sector, the best-performing sector in the previous European real estate cycle, experienced a normalization in demand in 2023 due to over-capacity and occupier cost pressure. Vacancy rates generally remain tight despite a slight uptick in some markets, thus supporting healthy rental growth rates across Europe. Over the medium, structural demand tailwinds such as nearshoring and reshoring should remain supportive. E-commerce should also resume growth after the post-pandemic slowdown. Market conditions are likely to continue to normalise, albeit the outlook for occupancy and rents remains robust.
OFFICE: Office demand has seen a soft patch amidst cyclical and structural headwinds which have led to an increase in vacancy rates in recent years. Demand is also increasingly polarised by asset and allocation quality, with tenants moving from secondary stock into green, flexible assets with good amenities. This is making the office sector more capital-expenditure-intensive but also creates upward rental growth pressure, given the scarcity of prime space in many cities. In contrast to the US, vacancy rates remain much lower in Europe and new supply is under control. However, the “core” segment of the market has shrunk and quality of amenities, location and ESG credentials will be increasingly important for tenant demand and liquidity.
RESIDENTIAL: Despite the strong fundamentals, the high-interest rate environment has affected the European residential real estate sector, leading to a decline in transaction activity in 2023 significantly below the 10-year average. However, the sector still has robust fundamentals due to the persistent imbalance between supply and demand, inflation-linked rental income, and diversification benefits. The energy efficiency of buildings in the residential sector is expected to have a rising influence on returns and liquidity. Investors are also focusing on alternative segments of the residential universe, such as student accommodation or co-living, which are often less regulated and offer a yield premium to traditional multifamily rental housing.
RETAIL: The outlook for the retail market has improved following the deep structural adjustment in the last few years. Structural (e-commerce) and cyclical (cost-of-living crisis) headwinds continue to weigh negatively on the sector, but the operating performance has improved in certain parts of the market, including prime malls and high streets. Convenience retail with affordable rents and NNN inflation-linked leases, along with assets in supply-constrained locations also offer a resilient outlook.
INFRASTRUCTURE: The infrastructure asset class had a strong performance in 2023, even though policy rates and bond yields were on the rise. This was due to the sector’s cash flows being linked to inflation, which helped support returns. This feature is a reminder to asset allocators of the diversification benefits and inflation-linked performance that infrastructure can offer. Investors may find this asset class attractive due to its stable yields, particularly since it is still under-owned by institutional investors and private wealth investors. As the major central banks are expected to start a rate-cut cycle later in the year, investors may extend the duration to obtain the stable yield offered by the asset class.
Strategic corporate development
PATRIZIA and its clients benefit from opportunities in European real assets which cover all risk styles, geographies, sectors and formats, an entrepreneurial and independent spirit, ethos and approach – unique in the industry. It has a more than 39-year history of serving institutional investors from around the world and meeting their reporting and regulatory requirements, local in-house transaction and asset management teams of significant scale, a long-term track record, a commitment to the highest standards of corporate governance, risk management and compliance. In addition, the company is taking a tech leadership role in the industry, actively digitalising the business in order to achieve both economies of scale and client service excellence. This effort is driving further innovation and growth, firm-wide, as PATRIZIA continues its transformation.
Performance verification
PATRIZIA performance information is compiled regularly and consistently based on relevant industry benchmarks and definitions. As such, it has not been audited by an external third party. However, all PATRIZIA performance outputs are based on financial data which is reviewed as part of each fund’s/the company’s annual audits by independent auditors. PATRIZIA is also a regular data contributor to BVI, MSCI/IPD and INREV indices at property and fund level, which provides additional, regular interrogation and checks of data by third parties.
COMPLIANCE STATEMENT
These materials are provided for use by qualified institutional investors for information purposes only and are not intended as solicitations of investment business. PATRIZIA will not accept any responsibility for this publication or the information included herein. In particular, PATRIZIA has not verified or examined the information contained in, or referred to by, this publication or this publication in its entirety, nor has it convinced itself in any other manner of the reasonableness, correctness and completeness of the information concerned. PATRIZIA shall not provide any warranty or guarantee in relation to the reasonableness, correctness or completeness of the information or opinions in or concerning this publication.
