PATRIZIA launches new Living Cities Residential Fund with EUR650m in seed assets
PATRIZIA has launched the PATRIZIA Living Cities Residential Fund (Living Cities), an open-ended fund with a core strategy which currently has EUR650 million of seed assets and is expected to grow to over EUR1 billion in assets next year.
The Fund is PATRIZIA’s flagship, core pan-European residential fund for institutional investors and is underpinned by the Company’s 35 years’ experience of both investing in the residential sector across Europe and managing open-ended discretionary funds. PATRIZIA has access to local deals through its unrivalled network of 200 local residential investment professionals.
A number of existing and new global institutional investors from Europe and Asia have committed to the fund with further parties in advanced due diligence.
Anne Kavanagh, Chief Investment Officer at PATRIZIA, says: “We are thrilled to have successfully launched this new flagship residential fund to capitalise on the exciting opportunities available within the European residential sector and the strength and depth of our experience in this market and our fund management capabilities. We’d like to take this opportunity to thank our investors for their early commitment which demonstrates their confidence in our team and strategy. Living Cities is already creating enormous interest among investors due to the strong growth potential in Europe’s residential sector.”
The Fund, which will have a 35 per cent LTV, will be targeting Europe’s most exciting metropolitan areas. It draws on PATRIZIA’s proprietary European Cities Ranking model to focus on long term buy-to-hold strategies which will include 20 per cent of the Fund being invested into the increasingly sought after “‘Living”’ residential category including co-living, retirement and student housing.
Sebastian Dietert, Fund Manager, Living Cities at PATRIZIA, says: “To have locked in a seed portfolio of EUR650 million is testament to our deal making capability and our ability to secure very attractive assets for our clients. The composition of the current Living Cities portfolio reflects the essence of this fund, namely to provide stable income with a long-term capital growth prospects in strong micro locations. In addition, we have a pipeline of approximately EUR 1.5 billion in additional acquisition targets thanks to our strong local expertise.”
The Fund’s seed portfolio was assembled through a series of separate transactions. The most recent transaction is the purchase of a German residential portfolio, which is 99.5 per cent let. The nine building portfolio provides 1,198 apartments all let to the private sector across a total rental area of 96,500 sq m in six of Germany’s leading cities.
The other most notable transactions include two apartment developments. In Germany, in an emerging area of Munich’s West End, Green Levels has been acquired and will provide 192 apartments across 14,190 sq m and in Copenhagen, Denmark, the fund has bought a 76 apartment, 8,383 sq m development in the highly regarded Amager Beach Park area. Both projects will be delivered to the private rental market during 2020. In addition, a dozen assets were purchased in the Dutch cities of Amsterdam and Rotterdam.