Fast-growing German listed property group Patrizia reported a preliminary 14% rise in operating income last year to €87m, and said it expects growth of up to 22% for 2018, reaching €85m to €100m in this metric.
In a preliminary report, the Augsburg-based group, which last year announced two large asset management acquisitions, said: "following a successful fourth quarter in 2017, earnings also comfortably exceeded the recently increased full year guidance of slightly more than €75m. This was driven by higher than budgeted performance fees from the successful management of real estate investments for the group’s international institutional and private investors."
Organic 2017 growth in assets also exceeded expectations, up €2.2bn or 12%. Including Patrizia Multi Managers – formerly Sparinvest Property Investors – AUM stood at €21.9bn at the end of 2017. Including acquisitions of Frankfurt-based manager Triuva and, later in the year, London's Rockspring, Patrizia’s pro-forma managed assets will more than double to around €38bn.
“With this strong set of results we more than delivered on what we promised organically while successfully executing on our external growth strategy," commented CFO Karim Bohn. "Both the operating progress and recent acquisitions substantially increase the level of recurring earnings and bring Patrizia to a new level of sustainable profitability. At the same time we maintain a very conservative balance sheet structure and strong cash position.”
Based on the expected continued organic growth and including the earnings contribution from the acquisitions, Patrizia expects to generate a 2018 operating income in the range of €85m to €100m, equivalent to a growth rate of up to 22%.
In 2017, Patrizia executed European transactions in residential and commercial real estate totalling €6bn, an increase of 17% on 2016. In total, these comprised €3.5bn of acquisitions, up 9% on 2016, and €2.5bn of sales, up 32%. It also raised around €2bn of funds from institutional and private investors which have been deployed into investments. International capital accounted for around 40% of all raised institutional financial inflows during 2017, up from 18% in 2016.
CEO and Founder Wolfgang Egger, who still holds a controlling stake in Patrizia, commented: “Our results in 2017 underline the strong performance of our local and pan-European experts to identify and execute attractive investments across all asset sectors and risk classes, as well as realising outperformance for our institutional and private investors.
In particular our clients will benefit from the recently announced acquisitions as the combined organisation, with its strengthened European network, broader product spectrum and stronger access to the pan-European investment markets, offers more opportunities to institutional and private investors.”
Patrizia’s 2017 earnings will be announced in full on 15 March 2018 with the publication of its 2017 Annual Report.