Patrizia lifts mandates by €1 bn in Q2

Patrizia Immobilien obtained new commercial mandates with a volume of more than €1 bn in the second quarter of 2013, the company reported last week.

The new mandates lift the Augsburg-based company's assets under management to more than €10 bn, with almost half now relating to commercial real estate, CEO Wolfgang Egger said. The first purchases on behalf of the new commercial mandates have already taken place, he added.

Earlier in the year, the company acquired German housing company GBW for €2.4 bn. That deal followed Patrizia's purchase last year, together with a consortium of institutional investors, of 21,000 residential units held by LBBW Immobilien (now SüDeWo) for €1.4 bn.
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'The most recent transactions show that Patricia’s business model is not limited to the residential sector, and in fact now covers various commercial sector,' Egger said. 'Not just for different types of use such as office and retail real estate, but also for different investment styles such as core or value-added. For us this means systematically implementing our strategy and now also being able to offer investments for opportunistically inclined investors on this growth path as well. Our experience in portfolio and asset management enables us to achieve stable and sustainable increases in value in doing this.'

In the second quarter, operating earnings before taxes almost doubled from €5.8 mln to €10.5 mln. First-half operating earnings before taxes were up 34% year-on-year year at €18.1 mln. After-tax net profit for the six-month period surged more than 200% from €5.3 mln to €17.7 mln.

Egger warned that although Patrizia's earnings momentum typically gathers pace over the course of the year as real estate trading picks up towards the year-end, this year's targets for operating earnings may not necessarily be met. The restructuring of the Group to comply with the requirements of the AIFM Directive introduced in July is causing considerable one-off costs and affecting both the German and the international organisations, he said. 'Furthermore, the integration of foreign subsidiaries whose contribution to results will not be seen until the coming years is also tying up resources.'

At end-June, Patrizia had 636 staff compared to 607 at end Q1. Since the start of the year, Patrizia has repaid 16% of its bank loans. The company aims to reduce its liabilities to €350 mln by the end of the year, which would further improve its debt-equity ratio from 36.5% at end-June to 45% at year-end.