Taking into account an existing USD 500 million co-investment side vehicle, this grows PATRIZIA’s overall smart cities investment programme to around EUR 1.4 billion made up of equity only.
The fresh round of funding from cornerstone investor APG Asset Management, on behalf of its pension fund client ABP, will focus on expanding SCIF’s Italian smart streetlighting platform, following the acquisition of three smart street lighting companies in Italy, and its smart city division.
SCIF was established in November 2018 to invest in smart city enabling infrastructure and was one of the first funds globally to target this emerging asset class. The Fund targets investments that enable the implementation of a wide range of smart city infrastructure solutions.
The Fund has fully committed its initial EUR 750 million capital to smart city projects across Europe and North America. In the US, SCIF has invested in five FiberCity® projects in partnership with SiFi Networks that will deliver high-speed fibre connectivity to small and medium-sized communities across America. In 2022, the fund diversified its portfolio with its first investments in Europe following the acquisitions of Italian smart streetlighting companies, Ottima and Selettra.
Earlier this year, PATRIZIA’s Italian streetlighting platform grew further with the acquisition of an 85% stake in Atlantico - Italy’s third-largest independent smart streetlighting operator by number of light points managed.
PATRIZIA’s smart streetlighting portfolio comprises more than 360,000 light points under management across 220 municipalities, with the potential to manage up to 1 million light points within the next five years and move from being the second-largest independent streetlighting operator in Italy to the top national operator.
The platform’s growth will be further accelerated by bolt-on acquisitions and the deployment of additional smart city services in municipalities, such as smart building management, smart safety and security, smart mobility, smart meters and smart traffic services.
Jose Martinez Artiles, an Investment Director at PATRIZIA Infrastructure, who manages PATRIZIA’s Italian smart streetlighting platform, comments: “Our smart streetlighting investments and smart city bolt-on acquisitions in Italy continue to go from strength to strength. Since our first acquisition in 2022, we have built solid relationships with many municipalities, who see the benefits of smart streetlighting, both from a financial and environmental perspective. I’m delighted that APG want to increase their investment in this segment and entrust us to deliver returns which will also boost municipalities and citizens alike.”
Smart streetlighting is a significant contributor to the European Union’s policy objectives on energy efficiency and reduction of carbon emissions. By upgrading their streetlights with the latest LED technology, towns can achieve energy savings of over 60% and minimise harmful substances from their communities, such as ultraviolet radiations and CO2 emissions.
PATRIZIA recently announced a new mid-term strategy with the ambition to reach EUR 100 billion AUM within the next five years. In reaching this goal, PATRIZIA identified five key growth areas, with RE-Infra and smart city solutions one of these.
Graham Matthews, PATRIZIA Co-Head Fund Management and Head of Fund Management Infrastructure and Chair of PATRIZIA Smart City Infrastructure Fund, says: “We are starting to see the convergence of infrastructure, real estate and technology, and through SCIF and our Italian smart streetlighting investments, plus the smart city bolt-ons, we are seeing the concept of RE-infra come to life. We are excited to be building on our strong relationship with APG to facilitate a widening of our smart city strategy. Smart city solutions are playing an important role in improving the efficiency and sustainability of the world’s cities as they respond to key challenges, including continued urbanisation, digitalisation and the energy transition. Ultimately, smart cities will improve the daily lives of people across the world and help strengthen communities, and we are excited to grow our smart city footprint in Italy.”
