Land, property, planet:
PATRIZIA'S EVOLUTION and founder-led DNA
Wolfgang Egger
2024 is a very special year for PATRIZIA. The company marks its 40th anniversary – four decades of building communities and sustainable futures and growing from a German residential real estate firm to become a leading partner for global real assets - which is what PATRIZIA is today.
So, how did it all begin? How was PATRIZIA able to grow with its clients to today manage more than EUR 56 billion assets under management (AUM) on their behalf? And what is the ethos of PATRIZIA?
Who better to ask than PATRIZIA founder Wolfgang Egger, who reflects on the past 40 years and earlier and comments on some of the most significant milestones to date, with further quotes provided by leading PATRIZIAns too. And what better place to start than the founding year of 1984, with Wolfgang providing the background…
THE BEGINNING
Sitting here in 2024 and being asked to summarise the past 40 years, you might be thinking: why did I do it? Why did I enter the world of property, then investment management and continue to diversify and grow the business along the way?
For me, it’s always been about getting people’s foot onto the property ladder and the dignity which comes with owning property – for yourself and the generations to come. To understand this passion of mine, we have to go back further – much further back than 1984 – and dig into my family history. Family, ultimately, is where this all returns to. For generations, my family worked on the land and made their living through agriculture. In farming, ESG is a philosophy not just a term. You work on the land and nurture it to make a living.
Making a living through agriculture requires ingenuity, hard work, dedication… and luck. The behaviour of your crops, scavenging animals and of course, the weather can turn a good harvest into a bad one and vice-versa. With all these variables, my family had passed down their livelihood from generation to generation. My great-grandfather then started turning the operation into production. With the profits made, he used them to make the operation bigger and better.
But then he faced unforeseeable challenges. First, with World War I which saw the destruction of much of the facilities and tools which kept the operation ticking over. Combined with a couple of dry seasons and needing to pay his employees, he was forced to sell land. In the farming community, to sell land is like cutting off one of your limbs. To add to his woes, soon after selling land, a change in national currency meant he essentially owned a lot of printed paper.
This was a big lesson for our family. You have to make sure you secure your income. You need to have more assets to diversify your income and not leave you vulnerable to unexpected events. Fortunately, his resilience and determination to provide for his family paid off in the end. When I was starting to make my own way in life it was born out of a passion for residential real estate investing. I had figured out how to make tenants owners.
Within three years of starting PATRIZIA, we were privatising around 100 flats a year and mostly selling them to the residents. Turning tenants into homeowners to enable them to live a good life when they get older was a key motivation for me. In these first 40 years, we have enabled 50,000 tenants to become property owners.
And those harsh family lessons from farming have shaped my approach with PATRIZIA, whether futureproofing the business through diversification, such as moving into infrastructure, or applying the adage that on a farm you need the village more than they need you – applied to PATRIZIA, we need our clients more than they need us.
At PATRIZIA, I wanted to build communities and build ownership and keep ESG firmly on the agenda. So, from the very beginning, it was about building communities and sustainable futures. To enable people the dignity of owning property which can be handed down to future generations is very important to me. So, with PATRIZIA, it’s a family story. You need to have incoming-producing assets which work with the weather, but aren’t reliant on the weather; very important in a world in which the climate is rapidly changing. And this feeds into our long-term megatrend investment focus and appetite for diversification which protects against ‘bad weather’ external factors.
Giving people a foot on the property ladder and the security this entails for generations to come is inherent in my philosophy, with the passing down of land part of my family history, and this is very much part of PATRIZIA’s DNA – from the very beginning, during the past 40 years and onwards as it evolves into the go to manager for smart real asset solutions.