REAL ESTATE – Dutch and Danish pension giants ABP and ATP have teamed up with German real estate firm Patrizia Immobilien to launch a joint venture that will invest up to €700m in German commercial real estate.
Under the arrangement, ABP and ATP are acting as investors, contributing €60m each initially.
The third investor, Patrizia (€8m initially), will be responsible for acquiring the properties and for asset management. ABP is a €210bn fund for Dutch civil servants while ATP is a €49.8bn Danish labour market pension fund.
Martin Lemke, managing director of Patrizia’s asset management arm, said the schemes had pledged another €40m each for the venture.
Patrizia, a listed firm traded on Germany’s mid-cap MDax index, has previously been known as a specialist for privatisations of residential property. It has nine offices in Germany, including major cities like Frankfurt, Berlin, Hamburg, Munich and Cologne.
Michael Nielsen, chief executive of ATP Real Estate, told IPE: "Before we closed the deal, we spent nine to 12 months learning all about Patrizia. We found that it had a huge presence in Germany."
He acknowledged that Patrizia is mostly a residential property specialist, but added: "We are convinced that they can transfer that expertise to the commercial market."
"We’ve known Patrizia even before they became a public company," added Rob Bingen, senior portfolio manager for real estate at ABP.
"And we have to say that we have been impressed with how they have managed the commercial real estate portfolios for other institutions, for example [private equity firm] Fortress. So it was a natural fit for us."
Lemke added that those handling the venture’s real estate investments "are actually commercial experts who have had little to do with residential property".
Augsburg-based Patrizia was floated on the stock exchange on March 31, though the firm’s founder Wolfgang Egger still holds 49% of the real estate firm. The Patrizia share, which originally listed at €18.5 apiece, was included into the MDax in September 2006.
According to the firm’s latest annual report, Patrizia’s pre-tax profit (on an EBIT basis) totalled €51.3m in 2006, double the €25.5m in 2005. The firm also saw its sales more than double to €237.6m last year.