Patrizia hikes earnings forecast, plans 3-7 investments by year-end

Listed German investment manager Patrizia Immobilien has upgraded its earnings forecast significantly for 2015 and 2016 following a strong second quarter during which operating profit rose to €9.3 mln from €5.5 mln in the previous year.

The Augsburg-based company said on Thursday it now anticipates total operating earnings of ‘at least’ €200 mln for the 2015 and 2016 financial years put together, after having previously forecast a 10% increase for 2015 compared to the previous year’s figure of €50.2 mln.

The cumulative earnings forecast stems from the fact that the planned sale of 630 apartments from a Swedish real estate fund acquired in the second quarter cannot yet be allocated specifically to the 2015 and 2016 financial years.

Operating earnings for the first half of the year amounted to €16.8 mln.

Real estate assets under management increased by around €1.3 bn to €16.8 bn in the three months to end-June, reflecting a string of investments in residential and commercial real estate, both in Germany and abroad.

‘The strong business performance dominated by several major transactions resulted in a significant increase in the earnings forecast in mid-June,’ said Patrizia's CEO Wolfgang Egger.

The company said it expects to make another three to seven investments in the order of around €200 mln each by the end of the year.

Cross-border acquisitions
In addition to the acquisition of various properties in Germany and Ireland, purchasing activity in the quarter was dominated by three major acquisitions in Scandinavia and the UK.

Patrizia acquired a Swedish real estate fund - Harald - with around 14,000 apartments, including around 13,500 in Germany, for around €900 mln. The company also purchased a site in Manchester via its British subsidiary for €140 mln for the development of office space and around 500 apartments.

Both transactions are ‘bridge investments’, Patrizia said, which were carried out for the company’s own account with the aim of being sold within the next 12 to 18 months. In addition, Patrizia acquired the property housing the Madame Tussauds wax museum in London on behalf of Taiwanese insurer Fubon Life for around €466 mln.

The second quarter also saw a number of major sale transactions, including the disposal of the Süddeutsche Wohnen Group (Südewo) with around 20,000 apartments to Deutsche Annington for around €1.9 bn. In addition, 630 apartments in Sweden were sold on from the 14,000-unit fund acquired during the period.

‘All of these transactions demonstrate our expertise as an investor, investment manager and real estate service provider,’ Egger said.

Patrizia’s said its earlier forecast of a €2 bn rise in assets under management for the current financial year remains unchanged, despite an outflow of €1.6 bn in assets as a result of the sale of Südewo.