Preliminary results: Strong growth in 2018 driven by enlarged pan-European platform and outperformance generated for clients
PATRIZIA further improves its key performance indicators
- Operating income up 72.1% YOY to EUR 141.4m
- Funds entrusted to PATRIZIA by investors increased 32.8% YOY to EUR 2.6bn with multiple new domestic and international clients
- Transaction volume of EUR 6.8bn (signed), transaction volume (closed) of EUR 5.2bn in numerous thematic investment strategies across Europe
- AUM increased to EUR 41.0bn, up 6.0% compared to pro-forma 2017 AUM
- Operating income guidance for 2019 of EUR 120.0m to 130.0m implies continued growth in recurring management and transaction fees
Augsburg, 18 February 2019. PATRIZIA Immobilien AG, the global partner for pan-European real estate investment, recorded an operating income of EUR 141.4m in 2018, a 72.1% increase on the 2017 level of EUR 82.2m. Major drivers for the strong results were organic and inorganic growth generated throughout 2018 with a strong increase in management fees (up 88.1% YOY to EUR 175.3m), stable transaction fees (EUR 52.4m) and very strong performance fees (up 38.2% YOY to EUR 92.5m) while cost growth (up 29.5% YOY due to acquisitions) remained well below the growth of total service fee income (up 51.1% YOY to EUR 320.2m).
Assets under management (AUM) increased 87.3% YOY to EUR 41.0bn, mainly driven by the consolidation of TRIUVA and Rockspring. Compared to PATRIZIA’s 2017 pro-forma AUM of EUR 38.7bn, AUM increased 6.0% YOY.
Karim Bohn, CFO of PATRIZIA Immobilien AG, said: “I am pleased with the results we generated in 2018. They are remarkable as they confirm PATRIZIA is able to deliver both a successful integration of four companies into ONE PATRIZIA while at the same time delivering highest service levels and outperformance to our clients. We not only delivered better than expected revenues in 2018, but also better than expected costs with the realisation of the first integration synergies. Both aspects provided the basis for the substantially increased level of recurring earnings compared to last year. In 2019 we will remain an active player in the market with focus on organic and inorganic growth. Another area of focus is new technologies which will without doubt impact our industry in the mid to long term. It is PATRIZIA’s clear target to become the tech leader in the European real estate investment industry and to guide our clients through the coming change.”
Based on the continued organic growth, PATRIZIA expects to generate a 2019 operating income in the range of EUR 120.0m to EUR 130.0m, which, following the very strong performance fees generated in 2018, assumes a normalised level for 2019. The 2019 guidance hence implies further underlying growth in recurring management and transaction fees compared to 2018.
PATRIZIA confirmed its success in the European real estate transaction market with signed transactions across real estate sectors for its numerous thematic investment strategies totalling EUR 6.8bn, an increase of approximately 38.5% on 2017 (EUR 4.9bn). PATRIZIA executed (closed) transactions of EUR 5.2bn during 2018 (compared to EUR 6.0bn in 2017). The increased volume of signed transactions confirms PATRIZIA’s strong deal-sourcing capabilities from which its global client base benefits.
In total, PATRIZIA signed EUR 3.4bn of acquisitions in 2018, an increase of 36.4% on the prior year (2017: EUR 2.5bn) and EUR 3.3bn of sales, up 40.6% (2017: EUR 2.4bn). Based on closed transactions, acquisitions contributed EUR 2.5bn (compared to EUR 3.5bn in 2017) and disposals EUR 2.8bn (compared to EUR 2.5bn in 2017) in 2018. Despite higher disposal activity during 2018, PATRIZIA’s net AUM grew by EUR 2.3bn YOY (compared to pro-forma 2017 AUM), also driven by new existing asset management mandates being entrusted to PATRIZIA by international clients.
PATRIZIA raised around EUR 2.6bn of funds from institutional, (semi-)professional and private investors which have been deployed into investment opportunities in strong, established markets across Europe. International capital accounted for 54.0% of all raised institutional capital during 2018, up from 38.0% in 2017, as international institutional organisations increasingly rely on PATRIZIA to invest on their behalf across Europe. Despite its strong position in the German market, PATRIZIA added 11 new institutional German clients to its client base. At the same time more than 75% of equity entrusted to PATRIZIA during 2018 came from investors with multiple fund investments on PATRIZIA’s platform.
Wolfgang Egger, CEO of PATRIZIA Immobilien AG, said: “Our results underline the strong performance of our local sector specialists across all risk classes, which resulted in outperformance for our institutional, (semi-)professional and private clients. The enlarged PATRIZIA platform with its strong pan-European network is now amongst the top European real estate investment managers. It offers a broad product spectrum and better than ever access to the pan-European investment markets. Also in 2019 we will continue to put our clients at the heart of everything we do with new and attractive products. Besides this, I am excited that in 2019 our PATRIZIA Children Foundation will celebrate its 20th anniversary, hence we look forward to an exciting year both from a business perspective as well as from our perspective to increasingly generate a positive impact on society.”
Further details on PATRIZIA’s 2018 earnings will be announced with the publication of its 2018 Annual Report on 21 March 2018.