(Typo in headline corrected: pressure)

AUGSBURG (dpa-AFX) - The gloomy mood in the real estate sector is weighing on the real estate group Patrizia. The management has initiated a comprehensive review of the cost base, the company announced surprisingly on Monday evening in Augsburg and also presented preliminary figures up to the end of September. Accordingly, earnings before interest, taxes, depreciation and amortization (EBITDA) fell by more than a third to 50.2 million euros after nine months. Although this is already at the lower end of the management's forecast range for the year as a whole, it is not expected to be much higher. The Management Board also intends to realign the dividend policy. The uncertain mood in the industry will continue to weigh on business in the near future. The share price slipped by one and a half percent compared to the Xetra closing price.

The Patrizia Management Board expects operating profit in 2023 to be at the lower end of the forecast range of 50 to 70 million euros. This is also due to one-off costs incurred in the course of the cost review. They are expected to amount to between 10 and 20 million euros and will be incurred in the current final quarter. From next year onwards, the cost structure is expected to be at the level of 2021, when inflation was even lower and Patrizia had not yet incurred costs from acquisitions.

According to the press release, Patrizia's management expects the uncertain market phase to persist and therefore continue to exert pressure on the valuation of real estate. It will also be more difficult to generate performance-related fees in the coming year. For this reason, the Management Board intends to base future dividends on profitability instead of on assets under management, as has been the case to date. Details and a dividend proposal will be presented to investors in February.

"The market environment remains challenging, probably for a longer period than many expect," said Group CEO Asoka Wohrmann according to the press release. "We must make Patrizia weatherproof for the ongoing pressure on customer and business activities in 2024." The aim is for recurring management fees to more than offset operating costs.

In view of the uncertain market situation, high inflation and rising financing costs, the third quarter was solid, according to the Augsburg-based company. According to CFO Christoph Glaser, the performance was also "supported by other operating income". The Group will not have this in the fourth quarter and next year.

In the first nine months, Patrizia's assets under management decreased by 1.7 percent to 58.2 billion euros compared to the end of 2022. The lower valuation of the portfolio was offset by newly acquired projects. However, they only partially offset the devaluation.

Recurring management fees continued to rise, increasing by 2% year-on-year to almost EUR 188 million by the end of September.

almost 188 million euros. In contrast, fee income generated through transactions, among other things, fell, meaning that total fee income declined by around eight percent to just over 228 million euros./lew/men/he