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Outlook 2019

The Group in general

The company has entered the 2019 financial year in a spirit of optimism and expects to successfully exploit market opportunities for its institutional, (semi-)professional and private investors once again in the form of attractive real estate fund products. On this basis, PATRIZIA is again anticipating strong transaction performance and growth in assets under management, with fee income from investment management continuing to increase and stabilise as a result.

Assets under Management are expected to see organic growth of between EUR 3.0bn and EUR 4.0bn in the 2019 financial year. All in all, the company expects its assets under management to increase to EUR 44.0bn to EUR 45.0bn by the end of 2019.

PATRIZIA is forecasting operating income of between EUR 120.0m and EUR 130.0m in 2019 after EUR 141.4m in 2018. PATRIZIA expects performance fees to return to a normal level in 2019 after having an unusually pronounced impact on operating income in 2018. Accordingly, the operating income forecast for 2019 implies further year-on-year growth in recurring income, particularly in the form of management and transaction fees.

Summary of the forecasts

 Last forecast 2018

Actual figures 2018

Forecast 2019

Assets under management (organic growth)

Growth of EUR 2.0–3.0bn

Growth of EUR 2.3bn

Growth of EUR 3.0–4.0bn

Operating income

Slightly over EUR 140.0mEUR 141.4 m

EUR 120.0–130.0m

Assumptions concerning the operating income forecast

Operating income
of between EUR 120.0m and EUR 130.0m is expected for 2019. The following section discusses the assumptions and expectations underlying this forecast.

PATRIZIA is anticipating management fees for asset and portfolio management services of between EUR 180.0m and EUR 185.0m. The company expects the majority of net growth in assets under management to have a positive impact on management fees only in the second half of 2019 as the respective transactions are closed.

The company expects the transaction market to remain active in 2019 and is forecasting transaction fees of between EUR 55.0m and EUR 65.0m based on a signed transaction volume of between EUR 6.0bn and EUR 8.0bn.

Income from performance fees is determined by the yields achieved in excess of the agreed target yields. These result from the realisation of value-adding measures in particular. PATRIZIA expects to generate performance fees of between EUR 72.0m and EUR 80.0m in 2019.

Total service fee income is expected to amount to between EUR 307.0m and EUR 330.0m. In addition, net sales revenues and co-investment income are expected to amount to around EUR 30.0m.

Operating costs, which primarily comprise staff costs and non-staff operating expenses, are forecast at between EUR 207.0m and EUR 222.0m. This means the ratio of operating costs to average assets under management is expected to improve further compared with 2018 to between 0.48% and 0.53% in 2019.

A more precise forecast will be issued in the course of the year based on the company’s operating performance.

Dividend Policy
The Managing Board and Supervisory Board of PATRIZIA Immobilien AG are proposing that the HGB unappropriated profit for the 2018 financial year in the amount of EUR 466.6m can be used to pay a dividend of EUR 0.27 per share, with the remaining amount being carried forward to new account. Based on the share of the IFRS consolidated net profit for 2018 attributable to shareholders of EUR 51.7m, this corresponds to a pay-out ratio of 48%. In the future, the growth rate of management fees and the growth rate of assets under management compared to the previous year will form the basis for the dividend proposal of the Managing Board and Supervisory Board of PATRIZIA Immobilien AG.

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