Case Studies

Denmark

Copenhagen Portfolio, Copenhagen

Acquisition

2012-2014

Date Sold

Q1 2017

IRR

0%

Equity Multiple

0x

Avignon Capital identified the Copenhagen retail market as having significant growth opportunities offered by its rapidly growing tourism industry and high domestic spending power. Between Q2 2012 and Q1 2014 Avignon Capital assembled a portfolio of five prime retail assets in Copenhagen, at a time when few international investors were in the market and yields were heavily discounted in comparison to other European capital cities.

The portfolio consists of five prime retail assets; a block of three located on Købmagergade, a prime pedestrian shopping street in the Old Town of Copenhagen, whilst the other two are on Østergade and Vimmelskaftet.

The assets are let to strong covenants such as Benneton, and the property located on Købmagergade 26 was identified as a value-add asset that could be repositioned.

Upon acquisition of Købmagergade 26, Avignon Capital proceeded to spend the following 18 months acquiring planning and redeveloping the store which was only made possible as a result of the adjoining buildings being under single ownership, resulting in a new, extended ground floor retail unit. There was a clear business plan from the start for this property, to extend into the under-utilised courtyard space to create a flagship retail unit.

The new retail unit was let to international retailer Superdry, increasing rent by 200% since acquisition.

Avignon sold the portfolio in Q1 2017 for €119m achieving a 154% return on equity. Since Avignon entered the Copenhagen market in 2012, the local retail market has evolved due to the influx of international retailers entering the market, helping to drive the rental and capital value of the assets.