Corporate overview
PATRIZIA has been delivering investment opportunities in real estate and infrastructure for 39 years, serving a diverse clientele that includes institutional, semi-professional and private investors. With asset management exceeding €58bn, our company’s footprint spans 28 global locations, manned by a team of over 1,000 dedicated professionals.
The philanthropic work of the PATRIZIA Foundation has been integral to our corporate ethos since 1999, enabling access to education for over 600,000 children and young people in need across the world. Our commitment to social responsibility goes hand in hand with our business activities.
We at PATRIZIA take pride in our approach to investment, which is anchored in progressive thinking, responsibility, and a commitment to sustainability. These principles enable us to deliver consistent and sustainable value to our stakeholders, ensuring that our clients and the communities we engage with benefit from our continued success. To learn more about PATRIZIA’s responsible investment practices and our positive impact on society, please visit 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 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: Despite the macroeconomic headwinds, occupational demand for industrial remains very strong, thanks to several tailwinds: e-commerce growth (despite a slowdown post-pandemic), higher inventory levels and some degree of near-shoring in a less globalised world. With persistently low vacancy rates for major logistics hubs, the outlook for occupancy and rents remains strongest among mainstream sectors. While the sector will not be completely immune to the ongoing correction, investor interest remaining particularly strong for urban logistics, as more supply-constrained locations offer more medium-term rental upside. Structurally supported emerging subsectors such as cold storage (despite the short-term headwinds to operating profitability), data centres and self-storage also have strong growth potential across Europe.
OFFICE: Office occupier market sentiment has turned the corner in H1 2022. We expect the increase in remote working to be a structural headwind, but pent-up demand should support the recovery in occupancy. In addition, tenant rotation from obsolete stock into green, flexible assets with good amenities will accelerate. This will make the office sector more capital-expenditure-intensive but also create upward rental growth pressure, given the scarcity of prime space in many cities. The recovery in demand is increasingly focused on grade-A buildings, but the macroeconomics headwinds will be a drag on the recovery going forward. With relatively low vacancy and future supply under control, quality-starved CBDs still offer attractive medium-term rental upside. However, quality of amenities, location and ESG credentials will be increasingly important for liquidity.
RESIDENTIAL: Occupational market conditions remain extremely robust for residential. Major cities across Europe remain undersupplied, with the net change in stock only marginally positive on average. The compelling supply-demand conditions should support the stability of occupancy levels and income amid a challenging macroeconomic environment. Rental regulation remains a concern for many investors due to affordability challenges and rising inflation, but based on a good local understanding of the rules of the game, this should not be viewed as a major issue. Like the other sectors, yields are under upward pressure in the near term given the spike in debt costs and expected rate hikes, with energy efficiency and other ‘green’ regulations also expected to impact the market. The outlook for student housing also remains strong, with supporting demand tailwinds, low provision rate in Continental Europe and an attractive yield premium compared to rented residential.
RETAIL: The retail market in Europe seemed to be close to the inflection point following the steep value declines during 2020-21. Compared to the UK, the market in Continental Europe has been more resilient thanks to lower occupational costs, lower e-commerce penetration and less oversupply. However, the headwinds from e-commerce and especially from the cost-of-living crisis remain significant, hence occupancy and rents are likely to remain under pressure, particularly for discretionary retail formats. Investment sentiment for food-anchored retail is more favourable, given long affordable leases with major grocery chains and less online sales diversion but prime retail parks rents are expected to be broadly flat. Nevertheless, the repricing of parts of the retail market should increasingly create value-add opportunities to redevelop and convert to other uses.
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.
