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Major driver for the «strong results» was organic growth generated throughout 2019 with a solid increase in management fees (up 8.8% y-o-y to 190.9 million euro), significant growth in transaction fees (up 24.8% to 65.3 million euro) and performance fees on continued high levels (down 0.7% to 91.8 million euro) while cost growth (up 8.1% to 227.2 million euro, adjusted up 4.5%) remained below the growth of total service fee income (up 8.7% to 348.0 million euro). Net operating expenses included non-capitalised technology expenses of 7.6 million euro to future-proof the PATRIZIA platform. On an adjusted basis operating cost growth was only 4.5%. Non-capitalised technology expenses will be adjusted in operating income going forward.
Assets under management (AUM) increased 8.4% to 44.5 billion euro, amongst others driven by net acquisitions for domestic and international clients in the European real estate market as well as transfer of asset management mandates to PATRIZIA.
Karim Bohn, CFO of PATRIZIA AG, said: «We have delivered on what we promised. The strong set of results confirm the leading position PATRIZIA has extended in all major European real estate investment markets. I am especially pleased with the momentum we have built up and the outperformance delivered to our clients. While the overall European real estate transaction volume slightly declined y-o-y in 2019, PATRIZIA was able to gain market share and deliver strong growth in transactions to our clients».
Wolfgang Egger, CEO of PATRIZIA AG, said: «At the same time we have invested significantly in new technologies to become the innovation and tech leader in the European real estate investment industry to guide our clients through the coming change. We will continue to grow to the benefit of our clients, and our shareholders».
Based on the continued organic growth, PATRIZIA expects to generate a 2020 operating income in the range of EUR 120.0 million euro to 140.0 million. In 2020 PATRIZIA expects a significantly lower revenue contribution from phase-out sale of principal investments and co-investment income – fully in line with the strategy. The guidance, therefore, implies continued organic growth in total service fee income - especially management fees - and lower net operating expenses, further improving the quality of earnings.
«Strong position» in European transaction market
PATRIZIA signed transactions across real estate sectors for its numerous investment strategies totaling 9.0 billion euro, an increase of 32.6% compared to 2018 (6.8 billion euro). PATRIZIA executed (closed) transactions of 7.6 billion euro during 2019 (compared to 5.2 billion euro in 2018). The increased volume of signed transactions confirms PATRIZIA’s strong deal-sourcing capabilities from which its global client base benefits.
In total, PATRIZIA signed 5.5 billion euro of acquisitions in 2019, an increase of 60.5% on the prior year (2018: 3.4 billion euro) . Total transaction volume in Europe declined slightly by 2.4% from 315.2 billion euro in 2018 to 307.7 billion euro in 2019.
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