Patrizia AG (or PATRIZIA AG as the company writes it) has been active as an investment manager in the real estate market across Europe for more than 35 years. Based in Augsburg, Germany, the company is listed on the Frankfurt stock exchange and, among others, is a member of the SDAX and MSCI World Small Cap Index.
The company has approximately 804 employees (FTEs).[1] Patrizia's business activities as a real estate investment manager include, but are not limited to, the acquisition, management, value optimization and sale of residential and commercial properties. The company provides institutional, semi-professional and private investors with direct and indirect real estate investments in Germany and across Europe. Since 2016, the company has also been offering funds for private investors through its subsidiary PATRIZIA GrundInvest.
The business activities of PATRIZIA include the acquisition, management, repositioning and disposal of residential and commercial real estate through its best-in-class local network in all key markets. As a global partner for pan-European real estate investment, Patrizia operates as a trusted and independent business partner of large institutional, (semi-)professional investors in all major European countries and has 24 offices spread across four continents. Since 2016, the company has also served private investors through its subsidiary PATRIZIA GrundInvest. The company has approximately 804 employees (FTEs).[1]
Patrizia manages more than EUR 44 billion of real estate and infrastructure assets, primarily as an investment manager for insurance companies, pension fund institutions, sovereign funds, savings and cooperative banks. Patriza is committed to responsible investments and positive social impact. The company is active in 18 countries on four continents.[2]
The company was founded in 1984 by Wolfgang Egger. He gained his first experience of the real estate sector with a summer job on a construction site while in his teens.[3] At the age of 19, he built a house, which he then went on to sell. He used the proceeds from the sale to buy Patrizia's first apartments.[4] Within three years of its founding, Patrizia was privatizing 100 apartments per year.[5] The company's focus was on Munich and Augsburg. Patrizia's strategy involved first buying apartments in Munich's Olympia-Pressestadt, along with apartments owned and used by Bayer AG and other companies, as well as large residential complexes in Augsburg, Obergiesing, Perlach and Schwabing before selling the apartments, primarily to their tenant occupants. Egger has since explained that one driving motivation was to turn tenants into homeowners. This gives individuals "financial freedom later in life and at the same creates value to society" by ensuring property and the surrounding landscape are maintained. [6]
Following the company's IPO in 2006, Patrizia acquired residential real estate in major German cities and conurbations, expanding its portfolio to include around 13,000 apartments.[7] At the same time, the company diversified its services and launched Spezialfonds (special funds) for institutional investors. Together with two international pension funds, the company founded PATRoffice GmbH & Co. KG to facilitate investments in commercial real estate.[8]
In 2011, Patrizia took over Hamburger LB Immo Invest GmbH (later: SÜDEWO), an initiator of commercial real estate Spezialfonds, and went on to expand the business. A co-investment with a consortium of pension and insurance funds enabled Patrizia to acquire LBBW Immobilien GmbH, owner of around 21,500 apartments, for €1.435 billion in February 2012.[9]
Led by Patrizia, a co-investment consortium of pension funds, insurance companies and savings banks acquired 92% of the shares in GBW AG in April 2013. GBW AG's housing stock totaled approximately 32,000 apartments in Bavaria; the shares were acquired for €2.45 billion.[10] With the takeover of the British Tamar Group the previous year, Patrizia simultaneously expanded its international operations.[11]
After the integration of Rockspring Property Managers LLP, Triuva Kapitalverwaltungsgesellschaft mbH and Sparinvest under one common Patrizia brand in 2018, Patrizia acquired a strategic stake in Evana, an artificial intelligence business, as part of its stated goal of becoming "the technology leader in European real estate investment management." [12] In January 2019, Patrizia announced the acquisition of Japan-based Kenzo Capital Corporation. Kenzo is an established local platform serving European clients interested in investing in Japanese residential real estate through a dedicated fund that was launched in 2017 in cooperation with Patrizia.[13]
In May 2019, Patrizia took an equity interest of 10 per cent in Control.IT, a company that produces asset and porftolio management software.[14] In June 2019, Patrizia Immobilien AG changed its legal name, in line with a resolution of that year's Annual General Meeting, to ‘PATRIZIA AG’. “The new name of the company and the renouncement of the German addendum Immobilien takes into account our stronger international orientation we have focused on for some time now,” commented Wolfgang Egger, CEO of PATRIZIA.[15]
In recent years, Patrizia has focused on digitalisation, innovation and new technologies to take advantage of new arising opportunities. Apart from the stake in Evana and Control.IT, Patrizia announced in October 2019 that it had obtained a strategic stake in Cognotekt, a Cologne based artificial intelligence platform that has developed a unique technological approach for state-of-the-art Natural Language Processing.[16] Cognotekt’s scientific technology is seen as having the potential to further enhance the operational and corporate data management processes of Patrizia in collaboration with Evana. Soon after Patrizia created a strategic partnership with WiredScore, a global rating scheme for digital connectivity across commercial and residential real estate.[17] Then in early 2020, Patrizia acquired BrickVest, a London-based global, digital investment platform founded in 2014. Patrizia announces it will ensure the further development of BrickVest as an independent and open industry platform connecting various investor groups with deal sponsors and product providers.
In February 2020, Patrizia partnered with pioneering PropTech VC Pi Labs and has participated in Pi Labs’ third fund which will invest in early stage PropTech start-ups across Europe.[18]
Criticism
The company was subject to public criticism in 1992 when, according to a report in Der Spiegel (37/1992 – 'Wie Augsburger Altbauten mit Hilfe von Asylbewerbern entmietet werden') Wolfgang Egger is reported as having said, “Every apartment that becomes vacant will be filled with asylum seekers.” ("Jede frei werdende Wohnung wird mit Asylanten belegt"), a statement that is reported to have unsettled residents of apartment buildings at Rote-Torwall-Straße 16 and Schülestraße 4 in Augsburg. Egger denied ever making the statement.[19]
In 2004, Germany's largest pension fund, BVV, awarded Patrizia a mandate as property and asset manager of the BVV's real estate assets. During the same year Patrizia was in the firing line in Hamburg as it developed a Mövenpick Hotel in the former water tower in Sternschanzenpark despite questions surrounding the legitimacy of the project's building permits. Nevertheless, Patrizia later received two prestigious awards for the successful redesign and construction project, including the 2008 MIPIM Award.
Awards
In addition to the two awards received for the redesign of the Mövenpick Hotel, in 2016, Patrizia won the Deal of the Decade (2006-2016) from PropertyEU.[20] Patrizia received the MSCI 2018 for Best Performing Balanced Fund based on three-year NAV-level returns. In 2019, Patrizia received the MSCI award ‘Best Performing Balanced Fund in the PEPFI Index’ for The PanEuropean Property Limited Partnership (‘PanEuropean’). It was the second year in a row that Patrizia had received the award.[21]
Wolfgang Egger received the 2020 ULI European Leader Award for exemplifying the values of leadership and vision. Jury Charman François Trausch, CEO of Allianz Real Estate, said “Many people in real estate are entrepreneurial but very few are able to move from an entrepreneurial idea or set up to a true organisation. Wolfgang has been able to achieve this thanks to his focus on the people at his company and talent management.”[22]
Corporate structure
As part of the 2019 integration of Rockspring, Triuva and Sparinvest under one common brand, Patrizia changed its operating model to reflect the new pan-European structure dividing functions into global, pan-European and local functions.Wolfgang Egger, the founder, remains the majority shareholder and CEO of the company. Via his First Capital Partner investment company, he has held more than 51 per cent of Patrizia voting rights since 2011.[23]
In January 2020, Patrizia strengthened its Management Board with three board functions reflecting mega-trends expected to influence the real estate investment management industry. Alexander Betz assumed the position of Chief Digitalisation Officer (CDO), Dr Manuel Käsbauer fills the role of Chief Technology & Innovation Officer (CTIO) and Simon Woolf is Chief Human Resources Officer (CHRO).[24] Wolfgang Egger as Chairman of the Board (CEO), Karim Bohn, Chief Financial Officer (CFO), Anne Kavanagh, Chief Investment Offcer (CIO) and Klaus Schmitt, Chief Operating Officer (COO) complete the Management Board. The Supervisory Board comprises Theodor Seitz, Alfred Hoschek and Uwe H. Reuter
Charitable foundation
Wolfgang Egger set up the PATRIZIA Children Foundation (former PATRIZIA KinderHaus Stiftung) as a charitable foundation in 1999. The PATRIZIA Children Foundation has helped over 200,000 children in need worldwide for over 20 years, giving them access to education and greater opportunities to lead better lives. The Foundation distinguishes itself by ensuring every euro donated goes 100% to the projects.[25]
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