Patrizia is one of the top European Investment Managers, with exposure across all segments of the real estate sector.
This year, Eduardo de Roda, Country Manager of Iberia at Patrizia, was present in Cannes, at MIPIM: one of the most important international events dedicated to the real estate sector. The conference programme addressed the most important trends of the moment, such as the importance of ESG criteria, flex space and affordable housing.
Aligned with these themes Eduardo de Roda shared with Iberian Property the Patrizia Real Estate strategy for the next couple of months. Read it below!
What is the reality of Patrizia in Iberia?
Patrizia is a listed investment manager, better said an independent investment manager since 52% of the company's capital remains in the hands of the company's founder. In terms of assets under management (AUM) in Europe we are positioned in the top 10, counting real estate and infrastructure, i.e. real assets. We have about 60 billion of AUM in Europe, and in Spain about 2.2 billion. In Portugal we have just one hotel in Lisbon, located in a prime area near the river.
Regarding segments, within our portfolio we have a very important weight in residential, approximately 40% in BTR and some well-located existing buildings. Here it is important to note that four years ago this percentage was zero.
Do you have any partnerships with developers in living?
No. We have done deals with companies like Invesco, Metropolitan House, Twin Peaks, and some family offices. We highlight of course the operation with BeCorp – a purchase of 1500 residential units for rent in Barcelona valued at 600 million euros. In short, we are not ‘married’ to anyone. We look directly for product ready to be rented.
In which segment of the residential market are you looking for opportunities?
Everything we have is divided between Madrid and Barcelona, basically product that is well located, well communicated, with good qualities and ESG credentials. We are not looking for high-end or affordable housing, instead we focus more on the middle class. To provide some context our rent range normally goes from €700 to €1500.
There is a lot of work by municipalities trying to mobilise affordable housing. Do you prefer going directly into the free market or are there important advantages to these public models?
Madrid's Plan Vive has been the one we have looked at the most, but it is true that it has some barriers and particularities. It is a concession and involves development, and as we are not developers as such, we would have to buy from the developer, following the same model as DWS, which recently bought from Culmia on a turnkey basis.
Portfolio composition – other segments of relevance
We have 20% in Logistics with warehouses in Madrid, Barcelona and Valencia. Typically, new warehouses and with very high occupancy levels. In the south of Madrid and in the Corredor de Henares there has been a growth in rents, but not as much as expected with the e-commerce boom. In Madrid there is still a lot of supply, so rents have not increased as much (Barcelona a little more).
To speak the truth, we can say that Patrizia touches a little bit of all sectors. Last year, for example, we entered the student housing segment with the purchase of 2 buildings in Barcelona.
Investors and financiers have gained some fear of retail, specifically shopping centres. Has this had an impact on you?
We have no special interest in shopping centres or in investing in them. We have done a lot of retail parks in Iberia, but frankly we now have very few assets, we have been divesting little by little.
Offices and rising Euribor: what does this mean for your purchases?
Our portfolio is centered in the concept of very good locations. We have rotated a lot of our assets, and we believe we must look at buildings with solid fundamentals.
We have to meet the return expectations of our investors, so the cost of debt is very important. And what happens is that with the European exposure we have, it is very difficult to choose Spain over Germany or the UK, where we can get better yields.
What will 2023 be like for Patrizia?
We cannot yet specify where we will be investing, but we have the advantage of managing several funds with different risk profiles and with the possibility of entering various segments. Patrizia always has strong annual investment targets and in Iberia we expect to invest between EUR 300 and 500 million - last year we had the same target and exceeded EUR 1 billion which shows well Patrizia's commitment in the region.
