Patrizia (AO) | Buy | Strong Q1 performance in a difficult market environment

Research evidence excerpt

Patrizia (AO) | Buy | Strong Q1 performance in a difficult market environment

Patrizia Buy | Target Price: EUR10.50

Company description Management

Patrizia is a global real estate investment company that carries out a wide range Asoka Wöhrmann, CEO

of activities across the real estate value chain, including the acquisition, Martin Praum, CFO

management, value optimisation and disposal of properties. In recent years, it

has also expanded its offerings to infrastructure. The company regularly uses its Key shareholders

strong balance for strategic co-investments to align interest with clients and to Free float 48.19%

generate additional returns as well as for seed investments for attractive First Capital Partner 51.81%

strategies.

Investment case Valuation methodology

Patrizia has a strong track record in AUM growth over the cycle. We value Patrizia using the blended outcome of a DCF, a

The company is currently managing real estate and dividend discount model (DDM) and a Gordon growth model

infrastructure holdings for many international institutional (GGM).

investors. Its strong track record, broad product range, close Key assumptions are: an LT EBITDA margin of 25%, LT growth of

relationship with institutional investors, pan-European 2% and a WACC of 9.2% (for the DFC), cost of equity of 9.2%, a

presence, and good sector diversification together form a key 90% payout ratio as of 2027E and LT growth of 2% (for the DDM),

competitive advantage that could fuel further AUM growth in the and a sustainable ROE of 11%, cost of equity of 9.2%, and LT

long run. growth of 2% (for the GGM).

A solid balance sheet could allow the company to make Risks to our rating

additional co-investments and acquisitions in the future. A strong increase in interest rates, which could negatively