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Corporate overview

Founded in 1984 by Wolfgang Egger, today’s CEO and majority shareholder (51.62%), PATRIZIA today counts on 24 offices, of which 19 are in Europe. PATRIZIA has been active as an investment manager in the real estate market across Europe for more than 35 years. PATRIZIA’s activities include the acquisition, management, repositioning and sale of residential and commercial real estate through its own licensed investment platforms. As a global partner for pan-European real estate investment, PATRIZIA operates as a respected business partner of large institutional investors and retail investors in all major European countries. PATRIZIA manages more than €41bn of real estate assets, primarily as an investment manager for insurance companies, pension fund institutions, sovereign funds, savings and cooperative banks and as co-investor.

Investment principles & strategy

One-stop shop

PATRIZIA is the global partner for pan-European real estate investment. 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 350 valued clients from 21 countries and five continents, and over 50% of these are repeat investors.
  • Many 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 research capability and extensive local teams enable us to combine top down, strategic ideas with bottom up, deal-driven stock selection.
  • We hire the best investment professionals in all major European markets (we only invest were we have people ‘on the ground’).
  • 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

Following years of healthy growth, the European economy has been experiencing a slowdown that started in the second half of 2018. Although the markets are adjusting to a more volatile geopolitical environment, liquidity remains healthy and interest in income producing investments, like real assets, is robust.

LOGISTICS: Despite some headwinds from the manufacturing sector, urbanisation and the re-organisation of retailer supply chains in the world of e-commerce remain strongly supportive for logistics demand. New supply has increased in most markets, which is removing some of the rental growth pressure from the existing space, yet speculative supply remains relatively low, with some exceptions. Whilst supply is generally responsive to demand for hub logistics, occupiers are focused on minimising costs.

INDUSTRIAL: With consumer habits changing the retail industry more than ever, investor strategies need to adapt in order to remain competitive and successful. Retailers have to respond to changing shopping patterns by optimising the number of their store locations and developing models to integrate online sites/stores into them. As a result, larger parts of the logistics sector will effectively become a ‘retail derivative’, opening up new investment opportunities but also creating new challenges for retail and logistics investors.

OFFICE: Demand remained robust, supported by demographic changes and the increasing concentration of economic activity in the major cities on the continent. From a supply perspective, vacancy rates are low and declining and development activity is generally under control. The net increase in stock (partly due to conversions to other uses) remains much lower than in previous cycles. Thus, the rental cycle is set to be longer and less volatile than in the past, led by markets where vacancy is set to remain very limited over the next few years. With a persistent low supply environment and ongoing urbanisation, several major European cities have a benign rental outlook.

RESIDENTIAL: Fundamentals for investing in European multi-family housing remain solid, despite a more challenging economic environment and increasing geopolitical tensions. However, the ongoing low interest rate environment will continue to challenge the execution of investment strategies. Availability of assets, especially at the lower end of the risk spectrum, will decrease and pricing will become more aggressive. At the same time, political involvement in the European residential markets is here to stay and will in many cases limit rental growth perspectives going forward. Investors need to pay close attention to the income stream delivered by each asset as well as any sensitivity to regulatory changes.

RETAIL: The outlook for the consumer economy and hence retail sales remains broadly positive across Europe. However, with the rise of e-commerce across Europe, the retail market is seeing more concentration and polarisation. Investor sentiment towards retail has weakened substantially over the past year but there will be segments of the market that should be more resilient, such as retail in growing urban areas and/or touristic destinations. In contrast, increasing vacancy rates in smaller cities and city sub-markets with declining population and secondary locations as well as the difficulties of large department stores give a hint who are the losers in this game. The structural changes affecting the market also create opportunities to redevelop and convert to other uses.

OTHER: Given European demographics, student and senior housing, boarding houses and coworking schemes continue to capture a rising share of investment as our way of living and working is changing continuously. As a consequence, further investment activities in these areas are expected, not at least because these ‘new-niche’ sectors constitute new investment opportunities in highly competitive markets.

Strategic corporate development

PATRIZIA AG has been active as an investment manager in the real estate market across Europe for more than 35 years. PATRIZIA’s activities include the acquisition, management, repositioning and sale of residential and commercial real estate through its own licensed investment platforms. As a global partner for pan-European real estate investment, PATRIZIA operates as a respected business partner of large institutional investors and retail investors in all major European countries.

PATRIZIA manages more than €41bn of real estate 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 estate which cover all risk styles, geographies, sectors and formats
  • an entrepreneurial and independent spirit, ethos and approach – unique in the industry
  • a more than 35-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 in both commercial and residential property
  • 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 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.