PATRIZIA Europe Residential Plus

The Pan-European Real Estate Investment

The "PATRIZIA Europe Residential Plus" offer enables you to invest in a real estate portfolio that invests primarily in traditional and modern forms of housing in the euro area.

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Overview
Note

Please note that the fund may only be subscribed to by investors who are professional investors within the meaning of Section 1 para. 19 no. 32 KAGB [Kapitalanlagegesetzbuch: German Capital Investment Act] or semi-professional investors within the meaning of Section 1 para. 19 no. 33 KAGB. Private investors are excluded.

At a glance

> 5%
Total return p.a.1
Time for a pan-European residential real estate fund

Persistent urbanization, demographic transformation and the structural shortage of housing are sustainably improving the return potential of European residential real estate investments. Modern and traditional forms of living offer a wide range of investment opportunities, each with attractive risk-return profiles.

~ 200
Residential real estate experts
The perfect partner

PATRIZIA has been active successfully in the European real estate market for more than 37 years. With around 12.5 billion euros of existing residential property and local experts throughout Europe, PATRIZIA is the specialist for in-depth market screening and consistent property selection. Invest in European residential real estate with Europe's leading investment manager and benefit from attractive return opportunities and promising diversification potential.

500 Mio
Target volume2
The right mix

The research-based investment strategy, the selection of target markets by experienced market specialists and the targeted acquisition of lucrative investment assets by local experts ensure the long-term success of the fund. An attractive investment approach for long-term investors who emphasize stable earnings and sustainable value growth.

200,000 €
Minimum invest for german investors
Minimum investment

The minimum investment amount for German semi-professional investors is 200,000 euros. Higher investment amounts than the minimum must be evenly divisible by 1,000. 3

1 The target return is the targeted return at fund level after (and at investor level before) all expenses, costs, taxes and fees for a consolidated portfolio after the completion of the investment phase – based in each case on the investor's investment amount. The actual returns may deviate significantly from the target returns.
2 The actual investment volume may also deviate significantly upwards or downwards.
3 Depending on the country in which sales take place, there may be different minimum investments (e.g. EUR 125,000 in Luxembourg).

Fund

PATRIZIA Europe Residential Plus

Invest in a real estate portfolio that invests in traditional and modern forms of housing in the euro area

Good reasons for investing in the residential real estate market

  • Demographic development – People are living longer and longer
  • Progressing urbanization – More and more people are moving to cities
  • Structural shortage in housing – Demand for dwellings in growth centers exceeds the supply

 

Evolution of the European Real Estate Market

The significance of the residential market segment has greatly increased in the European real estate market over the past decade, with the share in the total market rising by more than 50 % over this period. Every fifth euro in the European real estate investment market is now invested in this type of use, and with good reason.

Unlike in the past, the residential real estate market today encompasses numerous modern living concepts, such as student and senior housing or urban micro apartments, which take into account the needs of individuals at each stage of their lives. From the point of view of investors, this makes the housing market more heterogeneous and improves risk diversification through the targeted selection of assets.

Key Facts

StrategyFocus on traditional and modern forms of living (e.g. student living, senior housing, short-term rental, micro apartments) – and subordinate mixed-use properties with partial commercial use
Target marketEurozone (with a current focus on Germany and BeNeLux)
Leverage50 % (max. 60 %)1
Target volumeEUR 500 million investment volume2
CurrencyEuro - no currency risks
StructureClosed AIF for sophisticated investors or (semi-)professional investors
Investment phase Up to 30 months for the establishment of the portfolio
Fund term Through 31st December 2031 (with options to extend)
Minimum investmentEUR 125,0003
Investment restrictionsMax. 49 % allocation per country
Investments in at least three countries
Target returns4Total return: > 5.0 % p. a.
Distribution yield: 3.75 - 4.25 % p. a.
Fee structure Acquisition-related fees of up to 2.25 % of the purchase price
Management fee of up to 0.8 % of the net asset value (NAV)
Bloc sales fee (global sales) 1 % of the sales price/Single unit sales fee up to 4.75 % of the sales price
Performance fee 20 % of all dividends that exceed the total return of 5 % p. a.

 

1 At the asset level at the time of purchase.
2 The actual investment volume may also deviate significantly upwards or downwards.
3 Depending on the country in which marketing takes place, there may be different minimum investments (e.g. EUR 200,000 in Germany).
4 The target returns are the targeted returns at fund level after (and at investor level before) all expenses, costs, taxes and fees for a consolidated portfolio after the completion of the investment phase – based in each case on the investor's investment amount. The actual returns may deviate significantly from the target returns.

 

Investment strategy
  • Pan-European Core to Value-Add Strategy
  • Diversified buy-to-hold and buy-to-improve approach – complemented by a possible selective privatization strategy
  • Focus on traditional and modern forms of living (e.g. student living, age-appropriate living, short-term rental, microapartments) – and subordinate mixed-use properties with partial commercial use
Research-based approach, accounting for the specific location factors as well as the characteristics of the respective asset

With an attractive risk-return profile and diversification potential, the Fund targets sophisticated and (semi-)professional investors with the aim of generating a stable distribution yield and additional capital growth potential.

The Fund invests in selected residential real estate in prosperous regions of Europe, and follows a three-stage investment strategy. After analysis and selection of the region and the city in the first stage, analysis and selection of the micro location follow in stage II.

The third and last stage involves the definition of a targeted, specific asset strategy. All decisions are research-based and founded on an in-depth knowledge of the market and the local expertise of the PATRIZIA experts. In this context, the relevant location factors and the individual characteristics of the respective asset form the necessary basis for sound investment decisions.

Investment strategy in detail

Investment policy

Investment policy – over 5 % Total return p. a.

PATRIZIA Europe Residential Plus invests exclusively in the euro area as part of its defensive investment policy. The investments follow clearly defined investment limits. Thus, the fund will, for example, invest in at least three European countries and will not be allocated by more than 49 % in any one country.

The Fund's investment policy is also opportunity-oriented, through a combined top-down/bottom-up approach.

On the one hand, this means that, based on the comprehensive in-house PATRIZIA City Ranking, the locations are identified where suitable investment properties are actively sought out. On the other hand, investment opportunities often arise as a result of the strong local market presence. However, even in this case, a comparison with the research data and the resulting fund strategy is always carried out before reaching a corresponding investment decision. The focus of the investment policy is on traditional and modern residential real estate with a stable yield profile.

Structure

PATRIZIA Europe Residential Plus is conceived as a closed Luxembourg RAIF in the form of a SICAV S.A. designed especially for sophisticated and (semi-)professional investors with a minimum participation of 125,000 euros.1

1 Depending on the country in which marketing takes place, there may be different minimum investments (e. g. 200,000 in Germany).

 

Context and Facts

European Real Estate – Context and Facts

  • Evolution of the European Real Estate Market
    Persistent urbanization, demographic change and the structural shortage in housing are sustainably improving the return potential of European residential real estate investments.
  • Alternative residential concepts are enriching the market
    Forms of living such as student living, age-appropriate living, short-term rental, and microapartments are gaining in significance and expand traditional investment opportunities.
  • Return opportunities and diversification potential 
    Granular tenant structures and the continuing excess demand for residential real estate in selected growth centers are the basis for attractive return opportunities – particularly for investors with a long-term orientation.
  • Profound market selection and regional focus 
    Due to differing regional conditions and dynamic developments within Europe, in-depth market knowledge and a presence at the location are indispensable requirements for successful real estate investments.

Growth of working age population 2017 – 2025 (forecast)

Market Analysis and Outlook

Diversification potential and return opportunities

Key factors in the residential real estate market, such as population and household growth, develop largely independently of the current economic situation. For this reason, residential property is generally less cyclical than commercial assets and offers additional diversification potential at a solid risk-return profile.

Compared to government bonds, moreover, an attractive yield premium can currently be observed for residential real estate, which is assessed to persist due to the forecasted longterm demand overhang in growth centers in residential real estate and the resulting potential for growth.

Furthermore, diversification in the overall portfolio can be significantly improved with the aid of residential real estate investments, due to the granular tenant structures and the diverse investment opportunities.

At the same time, the factors described also form the basis for attractive return opportunities in European residential property investments – especially for long-term investors. 

Total return forecasts in selected European countries (p. a. 2020 – 2025)

Perspectives

Investment objective

The Fund seeks to achieve an average total return of > 5% per annum over the life of the Fund by acquiring and realizing real estate potential through active asset and property management, of which 3.75% – 4.25% per annumshould be paid out to investors (dividend yield).

 

Intended investment volume

The planned Fund volume amounts to 500 million euros2, the envisaged term equals around ten years after the completion of the investment phase. The target debt ratio amounts to 50%, the upper limit no more than 60%.3

 

1 The target return is the targeted return at fund level after (and at investor level before) all expenses, costs, taxes and fees for a consolidated portfolio after the completion of the investment phase – based in each case on the investor's investment amount. The actual returns may deviate significantly from the target returns.
The actual investment volume may also deviate significantly upwards or downwards.
At the asset level at the time of purchase.

1 Status in each case as at conclusion of the purchase agreement.

Investment strategy

Investment strategy in detail

Stage I – Analysis and selection of the region/city

The first stage objective is to identify regions and cities in the euro area whose structure and characteristics are in line with the Fund's requirements. The basis for this is not only local market knowledge, but also the comprehensive analysis of relevant primary and secondary data by PATRIZIA Research. The resultant PATRIZIA City Ranking accounts for numerous demographic factors, economic aspects and the innovative strength and connectivity of each city or region.

From these factors, the attractiveness of a location is derived - combined with the corresponding market liquidity, this ultimately results in the classification of the respective market ("Powerful"/ "Established"/"Innovative").

PATRIZIA City Ranking
Stage II – analysis and selection of the micro location

In the second stage, the local presence is used not only to gain the necessary access to lucrative real estate investments with the help of local expertise, but also to recognize market developments at an early stage and to derive investment decisions accordingly.

In addition, the suitability of the micro location plays an important role for the relevant usage strategies at this stage. For example, senior living have different requirements for the micro location than, for example, student apartments. The selection of the micro location and the relevant asset strategy there are crucial for future performance.

Development of micro locations using the example of Hamburg – Some locations have developed faster than others
Stage III – determination of the asset strategy

A balanced mix of investment strategies and styles should form the basis for sustainable investment success.

A major focus of investment is on modern forms of living such as student or senior housing, short-term rental properties or contemporary micro apartments. Both existing properties and turnkey project developments with stable and long-term predictable rental income are targeted. In addition, mixed-use properties with attractive risk-return profiles play a significant role in the portfolio composition. To complement the investment strategy, investments can also be made in traditional forms of housing, with the Fund focusing on existing properties and turnkey project developments with stable revenues.

In the context of the exit strategy, the selective privatization of traditional forms of housing also comes into consideration in order to generate additional value through the medium-term (individual) sale of the apartments.

Investments are primarily to be made in Core/Core+ assets; furthermore, potential capital growth in selected value-added properties can be leveraged through active asset management.

The execution of the described asset strategy regarding the primary investment focus on modern forms of living – with a corresponding mixture of traditional housing and mixed-use properties – is also clearly evident in the current Starter Portfolio.

Risk Disclosures

Risks of the investment

Legal framework
Type of investment
assets

PATRIZIA Europe Residential Plus Fund is a closed-end investment fund that is tailored to a specific target group (for details see below or in the Offering Document). The Fund was incorporated on 11 April 2019 as a stock corporation under Luxembourg law (société anonyme) in the form of an investment company with variable capital – reserved alternative investment fund (société d'investissement à capital variable fonds d'investissement alternatif réservé, SICAV-RAIF) and is governed by the Luxembourg Law of 23 July 2016 on Reserved Alternative Investment Funds, as amended. As an alternative investment fund, the Fund is also subject to the Luxembourg Law of 12 July 2013.

ISIN: LU1999740506
WKN: A2PKS1

Target
Group/Participation
Obstacles and
Distribution
Restrictions

A participation may be subscribed and held only by Investors who are considered "Qualified Investors" within the meaning of Article 2 (1) of the Law of 2016; no "Non-Qualified Investors" as defined by the Offering Document may be admitted as an investor.

The distribution of Shares of the Fund is permitted, among other things, only in compliance with the provisions applicable to distribution of the relevant jurisdiction and provided regulatory and other requirements are met. Interested Investors are obligated to obtain information and advice on any restrictions applicable in the respective country before any subscription. Thus, in connection with the distribution of the Shares in countries outside Luxembourg, there may be additional requirements for the suitability to invest, and additional Participation Obstacles may exist. Consequently, the Shares of the Fund may, for example, only be offered to professional and semi-professional Investors in Germany. Deviating or additional regulations may exist in other countries which must be observed by the Investor's Investment Advisor/Investment Broker in connection with the distribution and any subscription.

Type of Investor's participation in the FundAs a rule, Investors participate indirectly in the Fund as Trustors via the Trustee, PATRIZIA GrundInvest Fonds-Treuhand GmbH. Alternatively, a direct participation in the Fund through the acquisition of Shares is possible. As a Trustor under the Offering Document and the Bylaws of the Fund, an Investor is economically equivalent to any other (direct) Shareholder, in particular with respect to the voting rights at the Shareholders' Meeting or in the written circulation procedure.
TrusteeThe Trustee of the Fund is PATRIZIA GrundInvest Fonds-Treuhand GmbH, with registered office and business address at Fuggerstrasse 26, D-86150 Augsburg, Germany.
Management Company
of the Fund
As an Alternative Investment Fund Manager (AIFM), the Fund has appointed PATRIZIA Investment Management S.à r.l. – a limited liability company (société à responsabilité limitée) established in Luxembourg for an indefinite term and with registered office at 41, Avenue de la Liberté, 1931 Luxembourg, Grand Duchy of Luxembourg.
Investment AdvisorAs Investment Advisor to the AIFM, PATRIZIA GrundInvest Kapitalverwaltungsgesellschaft mbH has been mandated on the basis of an Investment Advisory and Services Agreement to advise and support the AIFM in the portfolio management, fund management, fund accounting, risk management, marketing, investor services (including Internet-based portal solutions) and distribution.
DepositaryBrown Brothers Harriman (Luxembourg) S.C.A. has been appointed as the Depositary of the Fund. The Depositary is responsible for the safekeeping of the assets of the Fund and is subject to the obligations of the Law of 23 July 2016 and the Law of 12 July 2013.
Central AdministrationThe Fund and the AIFM have appointed Brown Brothers Harriman (Luxembourg) S.C.A. as its Central Administration Agent in Luxembourg. The Central Administration is responsible for, among other things, determining the Net Asset Value per Share with the assistance of the real estate experts and properly keeping the books of the Fund.
Registrar, Transfer and Paying AgentThe Fund has appointed Brown Brothers Harriman (Luxembourg) S.C.A. as its Registrar, Transfer and Paying Agent. Inter alia, the Registrar is responsible for maintaining the Share Register and, in this connection, handling subscription and any redemption requests.
Investment objective for the investment assets

The Fund seeks to generate, on a continuing basis, current income from the leasing of Real Estate as well as to realize capital growth through the acquisition and realization of the Fund's Real Estate potential and its exploitation (including Privatization) within the framework of an active asset and property management. In this context, a total return of > 5 % p. a. is targeted over the Fund's term. The targeted distribution yield amounts to 3.75 % – 4.25 % p. a. after completion of the placement and investment phase (stabilized portfolio). The Fund's target returns are based in each case on the Participation Amount and after all fees, costs and taxes at the Fund level – individual costs and taxes at the level of the Investor in connection with the investment in the Fund are not taken into account.

Actual returns may be lower or higher or may not be achieved at all. Deviations from the intended return targets are to be expected. Forecasts are not a reliable indicator of future performance.

Investment policy for the investment assetsIn order to achieve its investment objective, the Fund will invest in Real Estate within the investment restrictions and limits, directly or indirectly through Real Estate Companies or Real Estate Funds (including multi-level). In the context of differentiated asset strategies, the investment policy includes the investment in forward-looking traditional residential real estate as well as alternative and modern forms of living (including student apartments, micro apartments, serviced apartments, assisted and senior-friendly housing together with care properties). In addition, the Fund may selectively invest in Real Estate that includes other types of use such as office, retail, parking, hospitality, catering and leisure, but also contain at least one corresponding residential use (mixed-use real property).
Possible duration of the FundThe participation offer is only suitable for Investors with a long-term investment horizon. Whether there will actually be a favorable market situation for a sale and thus the liquidation of the Fund at the conceptually intended end of the term on 31 December 2031, at which the returns of the investment can be achieved from the Investor's point of view in accordance with the investment objective, cannot be assessed with sufficient certainty from today's perspective. Therefore, as a precautionary measure, the investment strategy stipulates that if there is no correspondingly favorable market situation for a sale and liquidation at the scheduled end of the term, (i) the term of the Fund may be extended twice for a maximum period of three years (ii) the Fund may be converted into a Fund with no fixed term by a majority vote of the Shareholders' Meeting. In the case of a corresponding market situation, a much earlier sale and liquidation than the conceptually provided end of the term mentioned above is possible.
Prospects for capital repayments and returnsHistorical performance cannot yet be specified, as the Fund was only established in 2019 and there is insufficient data history to present past performance in a way that is useful to the Investor.
Payment date of dividendsThe Advisory Board of the Fund shall propose to the Shareholders' Meeting whether, in what amount and at what time an interim distribution or a distribution takes place. The Advisory Board may decide to distribute interim dividends within the framework of the statutory provisions. Under the current planning, it is envisaged that the Fund will make annual distributions as of 30 June of the following year, which may be adjusted by the Advisory Board at its discretion. Shareholders shall participate in the distributions in such a way that they are entitled to a pro rata temporis entitlement for the period from the first of the month following the contractual payment of the Participation Amount.
Minimum participation and offering price

The minimum Participation Amount generally equals 125,000 euros, unless regulations applicable for the sale or the Investor prescribe a higher amount. Higher Participation Amounts than the minimum Participation Amount must be evenly divisible by 1,000.

The Shares will be issued during the Offering Phase at the Offering Price of 1,000 euros per Share.

Method of payment and dateThe entire subscribed Participation Amount must be paid on the 20th of the month following the subscription (or, if this is not a Banking Day, on the next following Banking Day). In addition to its Participation Amount to the Fund, an Investor may be required to pay a fee to its Investment Advisor, investment broker or distributor; the type, amount and due date of which are governed by the terms of the Subscription Agreement, where the details for the payment settlement are also laid down.
Fees and costsThe full and complete presentation and explanation of the fees and expenses associated with the investment at the Fund level, together with the fees paid by the Fund, are contained in the Offering Document, section 19 "Fees and Costs". These fees and costs include the fees (e.g. any fees for Investment Advisors/Investment Brokers), costs and taxes at the level of the Investor that are additionally incurred in the case of an investment.
Offering PhaseThe Offering Phase begins with the first Closing (presumably Q3 2019) and ends 18 months after the acceptance of the first Subscription Agreement, whereby the Advisory Board and/or the AIFM may extend the Offering Phase once for a maximum of 12 months. The Advisory Board and/or the AIFM may at any time, at their discretion, suspend or terminate the Offering Phase, including repeatedly.
Redemption rights or transferability of the Shares

There are no redemption rights for the Shares of the Fund, these are registered only in Luxembourg and are not listed on the stock exchange in any country.

A transfer or disposal over the Shares can only take place – provided all of the conditions laid down in the Offering Document or the Bylaws of the Fund have been met – with effect to the end of 31 December of a given year or the beginning of 01 January of a given year, and only subject to the condition that the Shareholder has notified the intended transfer or disposal to the Fund in writing by 30 November of the relevant year, enclosing all the documents that may be necessary for the transfer.

The fungibility of a participation is thus limited within the framework of the present long-term investment horizon.

RecommendationSince there are no rights of redemption in favor of the Investor in relation to their Shares in the Fund, an investment in the Fund may not be suitable for Investors who wish to fully or partially dispose of their Participation Amount before the end of the term of the Fund.

 

 

Disclosures regarding the Tax Treatment of Earnings
Tax treatment at the Investor level

Interested Investors should definitely consult their own professional advisors prior to an investment in the Fund regarding the implications of directly and/or indirectly buying, holding or selling Shares and regarding the provisions of the laws of the jurisdiction in which they are taxable. The Offering Document and this brochure ("Product Information") do not provide any information or tax consequences for the Investor arising out of the laws of any country, locality or tax jurisdiction other than Luxembourg (however, the disclosures in section 7.13.12 and section 7.14 and section 25 of the Offering Document should nonetheless be noted).

Interested Investors are advised to review the tax conditions and consequences of any investment in the Fund for the applicable tax regulations in Luxembourg and the current tax status of the Fund and its direct or indirect Real Estate Companies in Luxembourg or other countries, as well as to seek individual advice from a tax advisor, which extends to the possible impact of the CRS law and with regard to the possible impact of FATCA.

Risk Disclosures

The participation in the Fund is a long-term entrepreneurial investment which also entails corresponding risks, in particular profitability and loss risks, in addition to opportunities for disbursements during the life of the Fund and the potential sales proceeds that may be realized in connection with the disposal of the Fund's assets. The following risks may affect the performance of the Fund and the earnings of the Investor from a participation: 

Commercial risk/specific risks of the assets or the investment propertiesShares in the Fund are securities whose prices are determined by fluctuations in the values of the assets contained in the Fund. There can be no assurance that the objectives of the investment policy or a positive performance of the assets will be achieved. The economic success of the Fund's investments, and hence the success of the Investor's investment in the Fund, cannot be foreseen. Neither the AIFM nor the Fund can predict or even promise or guarantee the amount and timing of capital returns. Economic success depends on a large number of factors, in particular the development of the relevant real estate and capital markets. The earnings of the Fund may fall, or in severe cases be eliminated entirely, as a result of vacancies or insolvent tenants, but also as a result of a negative development of market rents. There may also be unplanned or higher costs for tenant acquisition and the maintenance or renovation of the investment properties. The respective real estate locations may become less attractive, so that only lower rents and sales proceeds can be achieved. The investment assets themselves may be damaged by fire, storm or other events, and there may be no or no full insurance coverage that covers any such damage. Even undiscovered residual pollution or construction defects can adversely affect the value of the investment assets and/or unplanned remediation costs can arise.
Debt financing risksThe investments of the Fund are, in accordance with the concept, partly financed by loans that must be serviced independently of the earnings situation of the Fund or the respective Real Estate Company. In the event of negative performance, in particular if more unfavorable financing terms arise in the context of follow-on financing after expiry of the fixed interest rate, the debt service to be rendered under the loans may lead to a faster consumption of the Fund's equity capital. Value fluctuations also have a greater impact on the value of the participation (so-called leverage effect). This applies to increases in value as well as to decreases in value. If the Fund or the respective Real Estate Company is unable to fully meet its obligations arising from long-term debt financing, such as interest, redemption and repayment, or even the compliance with so-called covenants, this may result in a block of disbursements, the termination of the loan and/or cause the foreclosure of the investment assets to be carried out by the financing bank.
Liquidity and insolvency risk/lack of deposit protectionThe Fund may become insolvent or over-indebted. This may be the case if the Fund has lower revenues and/or higher expenses than expected. The resulting insolvency of the Fund may result in the loss of the Investor's Participation Amount, as the Fund does not belong to a deposit guarantee scheme.
Operational and tax or legal risks/regulatory risksConflicts of interest (e.g. due to capital and personnel links between the AIFM and the Fund or the Investment Advisor) may lead to adverse decisions for Investors. Key persons (e.g. of the AIFM or Investment Advisor) may withdraw or fail to perform their duties fully and properly. Changes in the tax, legal and/or regulatory framework conditions (potentially also retroactively) as well as unforeseen actual developments may have a detrimental effect on the earnings situation or the recoverability of the Fund. The tax foundations at Fund level described in the Offering Document are not based on binding information from the responsible tax authorities. A different view of the tax authorities or fiscal courts cannot be ruled out. The same applies to changing case law or administrative practice. The tax risk at the level of the Investor, for example the treatment of the Fund participation as such and possible dividend payments or capital repayments from the Fund to the Investor, is the sole responsibility of the Investor and must be borne solely by the Investor.
"(Semi-)blind pool" risks/risk of lack of diversificationAt the time of drafting the Product Information, it is not yet clear whether or which specific Real Estate the Fund will participate (where applicable indirectly) in (so-called "Blind Pool"). The Investor therefore has no opportunity to analyze, review or evaluate investments already made or intended by the Fund before investing in the Fund. In light of the fact that the investment is a "blind pool," it is unforeseeable whether the Fund will be able to directly or indirectly acquire suitable Real Estate in accordance with the investment objective and investment policy. If this does not succeed or not fully, the investment objectives may not be able to be achieved or the investment policy of the investment company may not be implemented or fully realized. Within the framework of the present Fund concept, it is furthermore unclear to what extent the Fund will actually be able to execute investments or in what volume a Real Estate portfolio will be able to be built up and subsequently managed. This depends in particular on the placement success during the Offering Phase of Shares to Investors and on the proportionate acquisition of debt on the capital market in accordance with the present Fund concept, taking the investment limits into account. Similarly, the desired diversification through a large number of properties on the basis of the investment policy may not be able to be achieved at a different Fund volume, especially lower than planned, so that higher than planned concentration and diversification risks may arise within the assets of the Fund. Furthermore, since Real Estate purchases may extend over a longer period, the Fund will bear the risk of rising prices and a lower selection of Real Estate on the market, as well as potentially unfavorable changes to conditions on the capital market within the framework of the proportionate leverage of the Fund's investments to be carried out. Any other related risks arising from investments yet to be made in the future may also adversely affect the Fund and potential profitability (e.g. political risks, market distortions or adverse changes in other framework data, including legal or tax parameters).
No redemption of shares/limited fungibility and transferabilityAs part of the participation in the Fund, a closed-end investment fund, there are no termination or redemption rights whatsoever vis-à-vis the Fund during the term of the Fund. There is no functioning market for the trading of Shares of the Fund and it is currently not foreseeable that such a market will develop; the fungibility of the investment is thus limited. There is no secondary market for the Shares. A sale of the Shares by the Investor during the term is not guaranteed. Any disposal and transfer may need to be approved by the Advisory Board or the AIFM. In addition, the further requirements for a transfer or assignment of Shares according to the Bylaws must be observed. Consequently, restrictions may arise if an Investor is reliant on the transfer/disposal of Shares during the term of the Fund. In addition – if the Investor is a natural person – the transfer of the participation in the event of an inheritance to the legatee or beneficiary of a settlement arrangement may be limited, inter alia, by the Bylaws of the Fund; in particular, the heir of a Share may be excluded under the Bylaws from acceding to the position as a Shareholder or Trustor.
 

The risks described can occur individually or cumulatively. In the event of negative performance, this can lead to a partial or complete failure of the investor to receive the targeted evidence and to a partial or complete loss of his investment amount plus any brokerage fee.

Therefore, the participation in this investment is only suitable in the context of a suitable admixture in an investment portfolio. The maximum risk for the Investor consists of the cumulation of a complete loss of their Participation Amount plus any brokerage fee and, if applicable, other payment obligations in connection with the participation, for example due to potential recourse under personal individual debt financing of their investment taken out – contrary to the recommendation of the AIFM. Since the Investor is making a long-term commitment with this entrepreneurial participation, the investment decision should include all relevant risks that cannot be fully and conclusively explained at this juncture. A detailed description of the risks can only be found in the Offering Document, Section 7 "Risk Disclosures."

Important Disclosures

The information on this investment is presented in abbreviated form and does not constitute a public offer. Details and, in particular, any risks associated with this investment as an entrepreneurial investment in addition to the opportunities can be found in the sole binding Offering Document including the Bylaws as well as any updates and addenda. Investors are advised to involve a tax advisor prior to making an investment decision. The tax treatment depends individually on the personal circumstances of the respective investor and may be subject to change in the future, including retroactively. A participation may be subscribed and held only by Investors who are considered "Qualified Investors" within the meaning of Article 2 (1) of the Law of 2016; no "Non-Qualified Investors" as defined by the Offering Document may be admitted as an investor. The marketing of Shares of the Fund is permitted only in compliance with the provisions applicable to distribution of the relevant jurisdiction and provided regulatory and other requirements are met. Interested Investors are obligated to obtain information and advice on any restrictions applicable in the respective country before any subscription. Thus, in connection with the distribution of the Shares in countries outside Luxembourg, there may be additional requirements for the suitability to invest, and additional Participation Obstacles may exist. Consequently, the Shares of the Fund may, for example, only be offered to professional and semi-professional Investors in Germany. Deviating or additional regulations may exist in other countries which must be observed by the Investor's Investment Advisor/Investment Broker in connection with the distribution and any subscription. In the context of an investment, no assurance is given that the investment objectives set out in the sales documents will actually be achieved. Past performance is not indicative of future developments/returns. This advertising communication does not constitute investment advice. The advertising communication is not adapted to the personal circumstances and needs of investors. The advertising communication does not replace individual advice based on the Offering Document. The fund company cannot be joined based on advertising communication. The Offering Document including the Bylaws, as well as any updates and addenda and, where relevant, the current material investor information, can be obtained following the start of sales free of charge as English-language documents at the business premises of PATRIZIA Investment Management S.à r.l., 41, Avenue de la Liberté, 1931 Luxembourg, during customary opening hours, and can also be requested free of charge in electronic form using the email address anleger.grundinvest@patrizia.ag.

Please note that the fund may only be subscribed by investors who are in any case well-informed investors within the Law of 23 July 2016 on Reserved Alternative Investment Funds. Depending on the country in which sales take place, additional requirements may need to be considered.

© PATRIZIA Investment Management S.à r.l.

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1 The target return is the targeted return at fund level after (and at investor level before) all expenses, costs, taxes and fees for a consolidated portfolio after the completion of the investment phase – based in each case on the investor's investment amount. The actual returns may deviate significantly from the target returns.