Patrizia Immobilien sees further €2bn in asset growth this year
The Augsburg-based Patrizia Immobilien, which has undergone a remarkable transformation over the past four years from local residential property investor to a broad-based European full-service boutique for property investment for institutionals, sees itself as being back on track for 2014 after a minor glitch in 2013 saw it missing the ambitious target it had given in advance as guidance.
CEO Wolfgang Egger said that operating profit for 2014 is expected to be at least €50m as the company continues to build up its platform for third party investors, providing the expertise and co-investment clout to lead syndicates to sizeable fund investment and generating fee income for his group. The company’s own residential holdings will be successively sold off into a strong market to reduce overall company indebtedness of €399m, he told journalists in a teleconference.
The profit target was missed last year as a result of a big acquisition (the Leo I portfolio) failing to close on time. That deal subsequently went through in February this year. Patrizia managed to increase its assets under management by more than 70% last year to €11.8bn, including the €2.5bn GBW residential property portfolio acquired for investors from Munich landesbank BayernLB. Assets under management should rise by a further €2bn this year.
Net profit last year was €37.2bn, a rise of 46% over 2012, but less than the €44m given as guidance, which irritated many analysts. Turnover fell by 5% to €217m, largely as a function of the Patrizia’s completely transformed business model, which now sees half the turnover generated in the form of services. The company is still not paying out a cash dividend, but shareholders will receive one fresh share for every ten held.
The 30-year-old Patrizia now has 712 employees, with about 40% based in Augsburg, while Hamburg has also become an important office, as the group expands in the UK and Scandinavia. Other good news that the company reported was the increase in its equity ratio of 42%, while it targets an equity ratio of 80-90% by next year, and by selling further assets it targets having about €280m of fresh liquidity to inject into transactions as co-investor. Patrizia finance director Arwed Fischer also assured the listening analysts of the healthy investment pipeline that the company’s Spezialfonds division was currently examining, with nearly €4.5bn of equity commitments from institutional investors waiting to be invested.