New PATRIZIA Living Cities Residential Fund with EUR 650m seed assets
Launch of flagship open-ended core pan European residential fund
- Invested so far in 12 European cities across the strongest residential markets, including income-producing German residential portfolio
- Supported by more than 200 residential experts across 19 European offices
Augsburg, 26 November 2019. PATRIZIA, the global partner for pan-European real estate investment, announces the launch of the PATRIZIA Living Cities Residential Fund (“Living Cities” or the “Fund”), an open-ended fund with a core strategy which currently has EUR 650 million of seed assets and is expected to grow to over EUR 1 billion in assets next year.
The Fund is PATRIZIA’s flagship, core pan-European residential fund for institutional investors and is underpinned by the Company’s 35 years’ experience of both investing in the residential sector across Europe and managing open-ended discretionary funds. PATRIZIA has access to local deals through its unrivalled network of 200 local residential investment professionals.
A number of existing and new global institutional investors from Europe and Asia have committed to the fund with further parties in advanced due diligence.
Anne Kavanagh, Chief Investment Officer at PATRIZIA, said: “We are thrilled to have successfully launched this new flagship residential fund to capitalise on the exciting opportunities available within the European residential sector and the strength and depth of our experience in this market and our fund management capabilities. We’d like to take this opportunity to thank our investors for their early commitment which demonstrates their confidence in our team and strategy. Living Cities is already creating enormous interest among investors due to the strong growth potential in Europe’s residential sector.”
The Fund, which will have a 35% LTV, will be targeting Europe’s most exciting metropolitan areas. It draws on PATRIZIA’s proprietary European Cities Ranking model to focus on long term buy-to-hold strategies which will include 20% of the Fund being invested into the increasingly sought after “‘Living”’ residential category including co-living, retirement and student housing.
Sebastian Dietert, Fund Manager, Living Cities at PATRIZIA, commented: “To have locked in a seed portfolio of EUR 650 million is testament to our deal making capability and our ability to secure very attractive assets for our clients. The composition of the current Living Cities portfolio reflects the essence of this fund, namely to provide stable income with a long-term capital growth prospects in strong micro locations. In addition, we have a pipeline of approximately EUR 1.5 billion in additional acquisition targets thanks to our strong local expertise.”
The Fund’s seed portfolio was assembled through a series of separate transactions. The most recent transaction is the purchase of a German residential portfolio, which is 99.5% let. The nine building portfolio provides 1,198 apartments all let to the private sector across a total rental area of 96,500 sqm in six of Germany’s leading cities.
The other most notable transactions include two apartment developments. In Germany, in an emerging area of Munich’s West End, Green Levels has been acquired and will provide 192 apartments across 14,190 sqm and in Copenhagen, Denmark, the fund has bought a 76 apartment, 8,383 sqm development in the highly regarded Amager Beach Park area. Both projects will be delivered to the private rental market during 2020. In addition, a dozen assets were purchased in the Dutch cities of Amsterdam and Rotterdam.
Living Cities is poised to capitalise on the continued resilience of the European residential sector. Liquidity across many of Europe’s major urban areas has increased demonstrably since 2009, with investment volumes growing from EUR 5 billion in 2009 to EUR 50.8 billion in 2018, reflecting the maturing nature of this asset class and the vast number of opportunities available to investors. Urbanisation combined with population growth is resulting in housing demand surpassing macroeconomic or political volatility.
PATRIZIA AG has been active as an investment manager in the real estate market across Europe for more than 35 years. PATRIZIA’s activities include the acquisition, management, repositioning and sale of residential and commercial real estate through its own licensed investment platforms. As a global partner for pan-European real estate investment, PATRIZIA operates as a respected business partner of large institutional investors and retail investors in all major European countries. PATRIZIA manages more than EUR 42 billion of real estate assets, primarily as an investment manager for insurance companies, pension fund institutions, sovereign funds, savings and cooperative banks and as co-investor. For further information, please visit: www.patrizia.ag
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