EUROPE - German real estate company Patrizia is set to optimise its portfolio in the wake of purchasing LB Immo Invest (LBI), which also broadened the company's regional focus, according to chief operating officer Klaus Schmitt.
In December last year, Patrizia had closed a deal with Germany's HSH Real Estate to purchase LBI - which specialises in issuing institutional Spezialfonds, mainly in the commercial real estate sector - for an undisclosed sum.
For Patrizia, the deal means increasing its focus on service and commercial property, as well as broadening its regional presence.
Schmitt told IP Real Estate: "We wanted to be able to offer the whole value chain in real estate investing from our house, and we will also reduce our dependence on the trading business."
Already for 2011, LBI is expected to contribute €3.5m net to Patrizia's business.
For this year, Patrizia is now planning a "significant portfolio optimization" that will see around €500m being invested, with some of LBI's current holdings being divested.
"We will be using market opportunities," said Schmitt, adding that these would mainly be in Northern Europe.
In total, Patrizia's assets under management have grown to €5bn, of which €3.8bn is invested in Germany and the rest in eight other European countries, mainly Northern and Eastern Europe.
Due to this new regional diversification, Patrizia will also branch out physically, opening an office in Stockholm "soon". A Paris office is likely to follow later this year.
Schmitt said: "The aim is to position ourselves in all large markets over the next two years - and this might include a presence in London."
As for the shift to commercial property, Schmitt noted that Patrizia, most well known for its residential property projects, had been running around €700m in Spezialfonds mandates for institutionals in commercial properties in recent years.
"We just did not advertise it, but now we can use our expertise in the commercial property sector on a broader basis," he said.
He conceded it was important not to loose trust by arbitrarily switching focus, but he said the purchase of LBI was a good addition, with hardly any overlaps - in products or in the portfolio, as it only has around 12-15% in residential property.
Schmitt also pointed out that Patrizia had been searching for around two years for such a match.
In other news, Patrizia has named Peter Willisch as an additional board member for its Patrizia Immobilien KAG subsidiary.
The current head of Patriza's legal department will manage the company together with Cornelius Hell - who had been named as Wofgang Lange's replacement earlier this year - and Michael Vogt, who will be leaving at the end of the year.