Corporate overview
PATRIZIA is a leading independent investment manager specialising in global real assets, offering a comprehensive range of services tailored to institutional, semi-professional and private investors. Managing approximately €56bn in assets, we employ around 900 professionals across 27 locations worldwide. Our diverse portfolio includes real estate, infrastructure, alternative investments and project developments, serving clients such as insurance companies, pension funds and sovereign wealth funds from Europe, the US and Asia.
Recognised as the #1 independent European real estate investment manager in the residential and value-add sectors (IPE Real Assets Top 150 Real Estate Investment Managers, November/December 2023), we have been committed to delivering long-term value since 1984. Our investments contribute to building smarter communities and sustainable futures - a commitment further reflected in the work of the PATRIZIA Foundation – which PATRIZIA supports – to empower children globally through education. We align financial performance with social impact, meeting the objectives of investors seeking responsible and sustainable growth.
Investment principles & strategy
In an ever-evolving market landscape, we view real assets as critical to shaping the future. Our investment strategy is informed by the four transition megatrends: living transition, urban transition, energy transition and digital transition. These megatrends are central to our approach, enabling us to position our investments strategically for long-term growth.
We combine decades of experience with advanced technology, utilising big data analytics and machine-learning algorithms to identify and capitalise on opportunities in sectors such as urban logistics, renewable energy, energy storage, purpose-built student accommodation and affordable housing. This blend of data insights and expertise from teams with ‘boots on the ground’ in our key markets allow us to make informed, forward-looking investment decisions.
Environmental, social and governance (ESG) considerations are fully integrated into our investment process. We are committed to achieving net-zero carbon status by 2040, focusing on reducing carbon emissions, enhancing social impact and maintaining strong governance practices. This commitment to ESG is not an add-on; it is central to how we operate and aligns with our long-term investment objectives.
Sector forecasts
INDUSTRIAL: The industrial sector, the best-performing sector in the previous European real estate cycle, experienced a sharp slowdown in demand in 2023 due to over-capacity and occupier cost pressure. Vacancy rates generally remain low despite an uptick in most markets, thus supporting income growth prospects. Strong prime market rental growth has significantly exceeded CPI inflation even in the relatively high inflation during the early 2020s. Over the medium term, structural demand tailwinds such as e-commerce and reshoring should remain supportive.
OFFICE: Occupier demand remains polarised by asset and location quality, with more tenants preferring to move from secondary stock into prime CBD assets. This is making the sector more capital-expenditure-intensive but also creates upward rental growth pressure, given the scarcity of prime space in many cities. Average vacancy rates continued to increase amidst weak take-up due to both cyclical and structural headwinds, but remain much lower than in the US. Liquidity is improving for top assets, yet 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 increased governmental intervention in the form of a changing regulatory landscape, the sector still has solid fundamentals due to the persistent imbalance between supply and demand, inflation-linked rental income streams, and diversification benefits. Given the decarbonisation goals, energy efficiency of buildings in the residential sector will have a rising impact on returns and liquidity. In addition, alternative segments of the residential universe, such as student housing or co-living, which are often less regulated and show a yield premium to traditional multifamily rental housing, offer attractive opportunities.
RETAIL: The outlook for selected retail subsegments has improved markedly following the structural adjustment over the last years. Structural (e-commerce) and cyclical (cost-of-living crisis) headwinds continue to shape investor sentiment of the sector, but the situation is becoming more favourable for subsegments like outlet centres and food retail. The latter, in particular, benefits from attractive income streams, especially when considering infrastructure synergies through EV charging or photovoltaic systems.
INFRASTRUCTURE: Active management is expected to continue to be a key driver of infrastructure equity returns as bond markets remain volatile. To that end, the mid-market segment continues to offer good potential for the active management of infrastructure assets, through a greater breadth of opportunities, more scope for value creation in asset management and the potential for attractively priced investments. With some major central banks now commencing rate cuts and cash returns beginning to decline, investors may be willing to extend duration to obtain the yield offered by infrastructure assets, particularly given the asset class remains under-owned by institutional investors and private wealth investors. High income infrastructure debt will also produce appealing returns while base rates remain elevated.
Strategic corporate development
Our Strategy 2030 outlines our ambition to grow our AUM to €100bn over the next five years. This growth will be driven by capitalising on the DUEL megatrends: living transition, urban transition, energy transition and digital transition. These trends are reshaping economies and societies, and we are strategically positioned to lead in emerging sectors such as urban logistics, renewable energy and affordable housing.
Central to this strategy is the expansion of our flagship funds in both real estate and infrastructure. We also have expertise in what we call ‘Re-Infra’: strategically combining elements of real estate and infrastructure to address the growing demand for integrated urban solutions. This innovation is driven by our commitment to harness the potential of smart cities, reflecting the convergence of real estate and infrastructure as cities evolve.
Our entrepreneurial culture fosters agility, allowing us to quickly adapt to new opportunities and trends. As the #1 manager of open-ended German Spezial- AIF in real assets (BVI), we are committed to maintaining our market leadership while continuing to innovate and expand our offerings.
Performance verification
Our diverse senior team drives a rigorous investment process, positioning PATRIZIA as a leading European real estate manager with strong local presence, proprietary data insights, and full ESG integration. Our top rankings in residential, value-add and dealmaking underscore our market access and execution excellence, delivering value to clients.
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.
