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Corporate overview

As a company 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 37 years. PATRIZIA manages more than €48bn in assets and employs over 800 professionals at 24 locations worldwide. And through its PATRIZIA Children Foundation, PATRIZIA is committed to social responsibility. The foundation has helped over 230,000 children in need worldwide gain access to education and thus has given them the chance of a better life over the last 21 years.

You can find further information at www.patrizia.ag

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 450 valued clients from 29 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’. 800+ 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 in order to capture growth and performance for our clients.

Sector forecasts

LOGISTICS: Logistics has emerged stronger from the COVID-19 crisis, primarily thanks to accelerated growth in e-commerce, which is bolstering demand for both large hub logistics and urban delivery centres. With low vacancy rates for major logistics hubs and speculative development under control, the outlook for occupancy and rents remains robust. Logistics has become one of the bedrocks of core real estate portfolios, with a wall of capital having led to a re-pricing of the sector in recent years. At current pricing levels, investor interest has been shifting towards urban logistics, as more supply- constrained locations should continue to offer more rental upside.

OFFICE: We expect the structural increase in remote working to be a medium-term headwind for demand (albeit with wide differences between cities) and create more polarisation within each market. Coupled with the growing emphasis on ESG, occupiers are likely to require less space, but better-quality space post-COVID. Given the improved expectations for the recovery post-COVID, demand should pick up significantly in H2 2021. Moreover, cities with strong economic prospects and low vacancy (eg, Berlin, Munich, Amster- dam) should remain resilient and retain attractive medium-term rental upside. However, for markets where the economic hit will be more severe or the speculative development pipeline is relatively high, risks will remain on the downside in the short term.

RESIDENTIAL: Market fundamentals have seen no significant change, proving income stability and predictability during the pandemic. Rising regulation may slightly impact the return outlook, but benefits and potential upside outweigh the risks. Multi-family housing might potentially be a victim of its own success due to strong competition for assets, but yield premium and returns expectations are holding up. During the pandemic an acceleration of maturing of the living niches could be observed, making them a wothwhile addition to a multi- family portfolio as alternatives still offer a premium over multi-family, compen- sating for operator risks.

RETAIL: The COVID-19 pandemic has accelerate the structural changes within the retail sector. Retailers are challenged by several structural headwinds: rise of e-commerce, declining profit margins in discretionary retail and a changing role of the store (multichannel). This impacts the ability of retailers to pay the current rental levels and maintain their physical footprint. However, the market in continental Europe should remain more resilient than in the UK given lower retail stock per capita and e-commerce penetration. The outlook is most favourable for food retailing, given the proven resilience during the pandemic and the fact that e-commerce is not a comparable disrupter as in discretionary retail. 

ECONOMY: The European economy is expected to bounce back in H2 2021 and the successful vaccine deployment suggests downside risks have reduced. The relaxation of pandemic-related restrictions fuelled a rebound in activity and leading economic indicators suggest a robust recovery that is expected to bring GDP to pre-COVID levels next year. What has made the pandemic recession different from earlier downturns is the vast policy support which has been instrumental in protecting people’s jobs and incomes and preventing large balance sheet destruction. Moreover, in a European context, the Next Generation EU (NGEU) Recovery Fund, focusing on ‘green’ and ‘digital’ spending priorities, is expected to support the recovery starting in H2 2021.

Inflation has spiked in recent months, notably in the US. This is partly due to transitory factors such as supply-side bottlenecks and labour market distortions. Medium-term inflation expectations remain low in the euro-zone due to structural reasons, albeit real estate investors should pay particular attention to construction cost spikes. The question of real estate as an inflation hedge has therefore resurfaced. With lower expected returns going forward and reduced diversification benefits from fixed income investments at today’s record low yields, we expect allocations to alternative assets, such as real estate, to increase.

Strategic corporate development

PATRIZIA operates as a respected business partner of large institutional investors and retail investors in all major European countries.

PATRIZIA manages more than €48bn of real assets, primarily as an investment manager for insurance companies, pension fund institutions, sovereign funds, savings and cooperative banks and as co-investor.

Going forward, PATRIZIA and its clients will 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. More than 37-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 cor- porate 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 data 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.