German Fund Patrizia To Invest €1,000M In Spain
8 April 2015 – Expansión
Real estate / The fund Patrizia Immobilien has arrived in Spain and wants to purchase a real estate company.
The Spanish recovery has become a magnet for large international investors. The latest player to be seduced by the market is the German real estate fund Patrizia Immobilien, one of the largest property managers on the European stage. The fund is listed on the stock exchange, is worth more than €1,100 million and manages (assets amounting to) almost €15,000 million at the global level, on behalf of large institutional investors.
To guide its entry (into the Spanish market), Patrizia has hired KPMG’s Head of M&A Real Estate, Borja Goday (pictured above). The executive was previously CEO at Sotogrande, partner in Spain of the fund O’Connor Capital Partners and an analyst at JPMorgan.
The German fund intends to expand its workforce by hiring up to seven professionals over the next few weeks, in order to establish an initial team to make the first acquisitions in Spain. But this could be just the tip of the iceberg, since Patrizia Immobilien may invest more than €1,000 million in Spain over the next few years, provided it finds the right opportunities. The company prefers not to share exact figures, but recognises that a large portion of the €2,500 million it plans to invest (globally) in 2015 may flow into the Spanish market.
“We are not a fund that just buys assets; we differentiate ourselves from other investors because we are expert managers. Furthermore, we are not planning to be in Spain for 4 or 5 years only, but rather for several decades”, says Goday. Whilst at KPMG, the executive was a member of the financial-real estate team that leads the sector rankings, and which participated in transactions such as the sale of Bankia Habitat to Cerberus, the sale of Sotogrande and the first major transfer (of assets) from Sareb.
In search of a stake in a real estate company
Patrizia’s (initial) aim is to close a transaction in the short term, and the fund is particularly interested in taking a controlling stake in a real estate company. Given the volume of investments that it manages, the fund could have even presented itself as a candidate in the bidding for Realia.
With a transaction of that kind, Patrizia would immediately assume the management capacity necessary to become a national player, in line with its objectives, and also take on a portfolio of assets with which it would begin to compete with its competitors. Before a purchase of that kind materialises, the investor will manage the assets that it purchases in Spain in collaboration with its team in Germany, where it has 800 employees.
As well as a possible takeover, the German fund is also evaluating the purchase of asset portfolios, primarily focused on residential and office buildings. The investor also has sub-funds that specialise in the purchase of individual assets, which may target buildings on Paseo de la Castellana in Madrid or on Paseo de Gracia in Barcelona.
The entry of Patrizia represents that arrival of a new type of investor in Spain. Following the arrival of opportunistic funds, such as Lone Star, Fortress, Cerberus and Apollo, (in recent years), which have purchased real estate companies with the aim of listing them on the stock exchange over the next few years, now, more conservative funds are arriving, which seem to be interested in settling here for the long term.
Original story: Expansión (by J. Zuloaga)
Translation: Carmel Drake