COVID-19 is reshaping the real estate landscape, and through this uncertainty there is risk, but it also presents opportunities. Avignon will be focussing on four key themes in 2021 which are based on our own experience and track record.
The hospitality sector has had a challenging year and although full recovery isn’t forecast until 2023, there are opportunities now to buy hotels at a discount. The news of a vaccine has improved travel confidence for next year with Skyscanner reporting a 45% search increase for 2021 holidays following the announcement. Avignon seek to target undermanaged or attractively priced hotels in strategic locations supported by good infrastructure with the aim of repositioning to global brands. By capitalising on distressed opportunities now, investors can take advantage of dampened demand to carry out refurbishment / repositioning programmes.
The socioeconomic and political environment is advantageous in Portugal and it has established itself as a premium tourism and real estate location. Rents in Lisbon are low compared to other European cities and this is driving strong occupier demand from international companies who seek to benefit from competitive rental levels. Prime office yields are trading at a discount compared to other key European cities and there is the opportunity now to capitalise on the abundance of poorly managed stock to create institutional grade product. The strategy is to take poorly managed office assets in strategic locations and reposition to attract the best-in-class tenant mix on institutionally accepted leases.
The port of Rotterdam is Europe’s largest seaport and has the strongest investment opportunities in Europe for port logistics. There is a limited supply of land in the harbour and the master development plan for the region will see rental growth and yield compression. There is an opportunity to buy assets whilst international trade is slow because of the global economic slowdown. Avignon aims to target undermanaged or attractively priced harbour properties in strategic locations in and around the harbour, supported by good infrastructure.
This year has had a devastating impact on many sectors, including retailers. Retail has long been underperforming; however, supermarkets have been a clear winner benefiting from both physical and online trade. This Covid-19 resilient sector is performing well, recording strong sales growth and many stores are on an expansion drive. There is a strong occupational market and a window of opportunity in 2021 to be able to selectively acquire strong assets from distressed vendors to create a strong income focussed portfolio.
To find out more about Avignon’s four investment themes for 2021 or to join our next webinar, please get in touch by using the contact form below.