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 36 years. PATRIZIA manages more than €45bn in assets and employs over 800 professionals at 24 locations worldwide. Through its PATRIZIA Foundation, PATRIZIA is committed to social respon-sibility. The foundation has helped over 220,000 children in need worldwide over the last 20 years.
Investment principles & strategy
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 400 valued clients from 28 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 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 pre-serve capital. When appropriate, we commit to disciplined, timely asset sales in order to capture growth and performance for our clients.
ECONOMY: As Europe and the Americas face a second COVID-19 wave, the uncertain US election outcome is set to produce much less definitive policy support. We nevertheless assume that a significant US stimulus bill will be passed in early 2021, but a split Senate will prevent any major political agenda being fully implemented. The new lockdowns in Germany and France, as well as the stricter virus containment measures in other countries, are likely to edge economies into recession levels, albeit milder than experienced in Q2. We are now much less bullish on growth in H1 next year, though believe that pent-up demand will generate a massive wave of spending on discretionary services in H2. Much will depend on how quickly vaccines can be approved and rolled out; the only way to avoid a stop-start cycle of economies. Against a weak macro-economic environment, investment grade fixed income yields are and will remain ultra-low and demand for higher yield real assets will remain elevated.
LOGISTICS: Industrial is likely to be one of the relative winners of the COVID -19 crisis, primarily thanks to accelerated growth in e-commerce; in the medium term, it may also benefit from the potential near-shoring of manufacturing and reconfiguration of supply chains in a less globalised world. The e-commerce boom across Europe has supported strong demand levels during 2020 for both large hub logistics and urban delivery centres. With speculative development and vacancy generally under control, the rental outlook remains benign. Still, for hub logistics there may be more polarisation and longer void periods in markets with more new supply and/or more negatively affected by the recession. In contrast, the limited vacancy and competition from alternative uses in more supply constrained urban areas should continue to offer rental upside.
OFFICE: Office occupational fundamentals were robust before the recession, with increasing concentration of economic activity in the major cities, a moderate supply cycle and low vacancy rates. However, the structural increase in remote working brought by the COVID -19 shock is likely to be a medium-term headwind for demand (albeit with wide differences between markets) and create more polarisation within each market. Robust Northern European cities with low vacancy and strong demand drivers should remain broadly resilient and retain attractive medium-term upside. However, for markets where the economic hit will be more severe (eg, Italy) or the speculative development pipeline is relatively high, risks will remain on the downside in the short-term.
LIVING SECTORS: The living sectors have maintained their reputation for resilience and stable operating cash flows throughout the COVID-19 pandemic. However, future performance of the different residential categories will vary as the sector is not immune to the repercussions of the global pandemic. Multifamily housing can be considered the most resilient among the living sectors. Student housing, one of the rising stars among the living sectors over the past several years, has absorbed a range of impacts from COVID -19. There will be a material, albeit temporary, adjustment in the share of international (non-domestic) students, but as knowledge and creativity is the main human capital resource in today’s world, long-term demand trends for student housing remain intact. A similar development can be expected for co-living. It had its fair share of challenges, but going forward, co-living remains an integral part of the living sectors, with a clear focus on the bigger agglomerations as it particularly caters to the needs of the young and more mobile workers attracted to these cities. In addition, elderly market trends present opportunities in the areas of senior housing from independent living to care homes. Overall, knowing the rules of the game and the (politically induced) changes happening in the market place will remain a key success factor in the living sectors, especially in these uncertain times.
RETAIL: Never in history has a crisis hit consumer spending in such a drastic way as the government-introduced lockdowns did in H1 2020, intensifying and accelerating many of the changes already under way before the pandemic struck. Lockdowns forced consumers to adapt. Going forward the dynamic of the recovery in consumer spending will be crucial for the speed of change; the slower the recovery the harder retailers will be hit and the faster change will come, especially to the high street and shopping centres via rental decline, insolvencies/CVAs and resulting vacancies. Pressure for change was accelerated by the pandemic, but there will be no vibrant city without inner city retail. However, these challenges will also create opportunities, as long as the necessary in-house capabilities to redevelop, redesign or reposition assets exist. Besides this, food/food-anchored retail offers value, as changes in this segment will be less of a revolution, compared with the high street and shopping centres.
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 €45bn 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 36-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.
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.
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.