Germany's Patrizia Immobilien reported that assets under management increased by €500 mln in the first quarter of this year to €19.1 bn.
For the full year, it sees AUM rising by €2 bn to €20.6 bn while operating profit is expected to be between €60 mln and €75 mln, the company said in an earnings update.
The company claims it also has a pipeline of acquisitions with around €1.4 bn of future purchases already notarised as well as a pipeline of disposals totalling €100 mln.
'We have seen a strong start to the year, building on the positive momentum achieved in 2016, as we continue the evolution of the company from a leading European real estate investment house to a global provider of real estate investments in Europe,' Patrizia's CEO Wolfgang Egger said. 'Following these results we are pleased to confirm our forecasts for the rest of 2017, and look forward to announcing the completion of our pipeline transactions over the coming months.'
During the first three months of the year, Patrizia was involved in about €900 mln of real estate transactions, reflecting acquisitions of €700 mln and sales of €200 mln. Key acquisitions included the purchase of nearly 400 residential units in Copenhagen and Aarhus across two separate transactions.
In the first three months of 2017, management fees rose by 9.7% to €22.9 mln, in line with the rise in the property portfolio under management. Total fee income declined, however, to €31.0 mln from €37.7 mln in the year-earlier period. Patrizia attributed the decline to lower transaction fees and said the figure also compares to a period of high transaction activity for the corresponding period in 2016. First-quarter earnings were lower, but remained in line with expectations, the company said. Operating income fell to €9.3 mln from the adjusted prior-year result of €12.3 mln.
In addition, Patrizia has issued a €300 mln bonded loan which was oversubscribed several times, the company said. The facility is structured in three tranches of five, seven and 10 years with an average coupon of 1.50%, which is partly fixed and partly floating. Closing is expected to be on 22 May 2017.
CFO Karim Bohn said the facility's 'very attractive' terms confirmed Patrizia's strong cash flow profile and increased its 'already strong' financial flexibility for further growth. 'The European market currently offers numerous attractive growth opportunities for Patrizia.'
