Becoming the go-to manager for smart real asset solutions

According to the PATRIZIA Investor Survey 2024

• Residential and alternative living are the second and third most desirable real estate asset classes where portfolios will allocate in the next five years (after logistics)
• 16% of investors plan to expand their value-add real estate investments the most in their portfolio over the next five years
• 70% of investors plan to increase their infrastructure allocation in their portfolios over the next five years
• 75% of investors agree that smart cities rely on combined real estate and infrastructure solutions

The DUEL megatrends are starting to determine which real asset investments will provide attractive returns and see growing interest in the markets. Despite the still overall subdued market sentiment, more than half of investors intend to increase their real assets allocations to the energy transition over the next five years, 40% want to grow their exposure to the digital transition, close to 30% to the urban transition, and 26% to the living transition, as the 4th PATRIZIA Investor Survey reveals. For the survey, close to 100 international investors shared their insights with us. 

And the share of allocations addressing the megatrends will certainly grow dynamically once the overall market sentiment picks up and the interest rate environment lightens. The investment opportunities in these megatrends are therefore set to grow. We want to be our clients' partner of choice in taking advantage of these megatrends - or rather the go-to manager for smart real asset solutions. 

So, how will we do this?

We have strong convictions on where the future sources of value lie. Fully leveraging DUEL megratrends requires joined-up action and 'smart' thinking, i.e. taking a holistic view and combining strengths across asset classes. For example, we believe that converging real estate and infrastructure into what we call RE-Infra, and consistenly strengthening the investment offering where we anticipate opportunities will turn the megatrends into attractive investment returns. And here are the five growth areas we have identified which will help us deliver on our EUR 100 billion AUM aim:

• Living sector - taking our expertise in residential real estate to the next level
• Value add - increasing returns by improving assets and building on our strong asset management
• European infrastructure - providing attractive solutions for the decade of infrastructure
• RE-Infra/smart cities - holistically thinking smart city solutions for the decade of infrastucture assets
• Advantage Investment Partners (AIP) - our multi-manager business and agile 'club' investing concept - for offering the benefits of highly diversified portfolios

We are going to support the growth in these segments with a strategy that balances the following key aspects:

• Protecting Germany and growing internationally - we will build on our strong position in our home market of Germany, in particular in core/core plus, including logistics, commercial and residential. At the same time, we aim to significantly grow in Europe and internationally by focusing on large, scalable flagship funds.
• Investing globally but managing locally - our investment strategy will be led by global specialists, supported by on-the-ground experts in PATRIZIA's key markets.
• Simplifying operations and bringing our leading expertise together - to become the investment manager of choice for smart real asset solutions and effectively execute along our strategic priorities, we have transformed our organisation and created five distinct Divisions to manage all business areas of our company: the Executive Division (CEO), CFO Division, COO Division, Investment Division and Client Division. And we have clear responsibilities for the regions in which we want to grow and service our clients best.
• Embracing technology and further improving investment decisions - we pursue the smartest use of technology and data analytics, including AI, to enable intelligent investment decisions, in line with our convictions around the megatrends.
• Building sustainable futures with attractive investment returns - we will be maximising investment returns, while minimising carbon footprint, as we embed decarbonisation into existing funds and create new value add products.

With our proven strengths and clear strategy, we are ensuring that our 40-year success story so far is just the beginning. By executing on our priorities, we will create attractive investment opportunities aligned to key growth trends. As a result, we aim to reach EUR 100 billion AUM in the next five years - reflecting the tremendous investment opportunities we are creating for our clients in a world in transition. In short, we want to continue being our clients' trusted partner in the next market cycle shaped by the DUEL megatrends - and become the go-to manager for smart real asset solutions.

This article is extra content created for the digital version of our thought leadership magazine, estatements. Take a look at the magazine here: Welcome - estatements magazine Edition 2, 2024