Augsburg-based Patrizia Immobilien is on target to lift its assets under management by more than €2 bn in full-year 2017 after reporting a 45% increase in operating income over the first six months of the year to €35 mln.
‘Patrizia has further built upon the strong momentum of 2016 to deliver significant growth in earnings in the first half of 2017 and strengthened its position as a global provider of real estate investments in Europe,’ said chief financial officer Karim Bohn. ‘With significant transactions completed after the period and a robust pipeline for the remainder of 2017, we look forward to the rest of the year with confidence and confirm our guidance for the full year.’
The company’s share price surged more than 7% in early trading following the announcement and the confirmation of its full-year guidance that operating income will range between €60-75 mln.
Europe-wide, Patrizia grew its assets under management to €19.2 bn as at 30 June 2017, and by end-July the figure had increased further to €19.8 bn. For the full year, the company is targeting €20.6 bn, driven by a further pipeline of contractually agreed acquisitions totalling more than €0.7 bn as well as €0.2 bn of planned disposals, which are largely expected to complete in the second half of 2017.
In the first half, total fee income rose by 13.1% to €88.1 mln, with management fees steady at €45 mln, despite the loss of fee income following the disposal of the property management division. Transaction fees fell 35% to €18.7 mln, but this was offset by a sharp increase in performance-related fees to €24.4 mln from €1.7 mln in the same period in the prior year. Recurring fee income from investment management services now represents 87% of total income, the company said.
Bond issue and share buyback
Following a €300 mln bond issue earlier this year, Patrizia has €737.5 mln in cash for further organic growth and acquisitions. In June this year, the company acquired a residential complex in central Amsterdam (pictured) for €66 mln from the property's developer, Bouwconsulting Beheer.
Coinciding with its earnings presentation, Patrizia said it was launching a buyback programme of more than 2.2 million shares. The company is offering a cash sum of between €15.90-17.40 per share, which represents a premium of approximately 0.2% to 9.7% above the average closing prices of the reference period (3-7 August 2017). The acceptance period starts on 10 August and ends at midnight on 7 September.
Originally focused on residential real estate in Germany, Patrizia has broadened its geographic and sector profile in recent years and is now active in a range of sectors including office, retail, light industrial and logistics. It also has minor interests in hotels and nursing homes.
In terms of geography, Germany now accounts for 67% of the total portfolio while the UK and Ireland make up 10%. Other countries in which the company is active include the Netherlands (7%), Nordics (5%), France & Belgium (8%).
