Patrizia exceeds own targets for assets under management
We reported some months ago in REFIRE that the Augsburg-based listed property investor Patrizia Immobilien AG came up short of their projected full-year figures, as one of their major deals had yet to be inked. The group had to revise its profit forecast for 2013 downwards in December by €6-11m as a result of the delay.
The long-awaited ‘Leo I’ portfolio of 18 buildings with 396,000 sqm leased out to federal state of Hesse institutions finally went ahead this month. The assets have a market value of about €1bn, and were sold by a subsidiary of Commerz Real AG, which is rapidly exiting from most of its real estate engagements. The properties include such buildings as the Hesse finance ministry in Wiesbaden and the police headquarters in Frankfurt am Main, the majority leased back to the state on long-term 20-year leases. The deal is expected to be concluded by the end of the first quarter.
A media report in the specialist trade journal Debtwire had suggested that the delay had been caused at the financing end. The report suggested that Stuttgart-based bank LBBW, which was providing the bulk of the 50% bank financing on the deal, had found a stumbling-block in the nature of the long-term leases to the state of Hesse which caused complications in refinancing the loan via the Pfandbriefmarket. It’s not yet clear whether this was fully resolved by the bank.
Patrizia is creating a newly-established real estate Spezialfonds to house the assets. Investors in the fund are a group of Pensionskassen, insurers, occupational pension funds, savings bank, foundations and religious institutions.
The deal comes on top of last year’s acquisition of the Leo II portfolio from listed Austrian group CA Immo, which included 36 buildings valued at about €800m. Here again, the buildings are mainly used as administration buildings by the state, such as ministries, courts, the police and fiscal authorities, and leased back long-term to the state.
Patrizia founder and CEO Wolfgang Egger explained last year how his company’s 2011-established division Patrizia Alternative Investments was now the group’s preferred vehicle for restructuring large portfolios which had got into difficulties because of their capital structure. The division has now transacted five big deals in the office, retail and residential sectors with a volume of more than €6bn, for which Patrizia had raised more than €2.8bn of institutional equity capital.
With the latest deal, Patrizia has now exceeded its own original goal of having €10bn of assets under management by end-2013, with now nearly €13bn under management.