This week marked one year since the announcement of lockdown in the UK and the events that followed were unprecedented. The situation was new to us and we had to learn quickly how to adapt in the best interests of all our stakeholders. The asset management team have taken some time to reflect on the impact and how we’ve responded to it and the lessons learnt.
The scale and pace at which change unfolded, represented one of the largest adjustments for Avignon Capital. The unpredictability of the virus meant we had to stay one step ahead at all times, creating and implementing plans that would effectively respond to any number of potential outcomes and ensure peace of mind for our investors.
We focused on looking at various scenarios in terms of the unknown, looking 2, 6 and 12 months ahead and building out different scenarios in order for us to understand our tenants and their rental profile, which enabled us to best position each asset in the future.
That’s something which is ongoing too. We are still working tirelessly to comprehend the complexion of the post-pandemic landscape.
Ability to adapt
The pandemic has affected every corner of the globe, but the extent and nature of that impact and subsequent government responses have varied. Restrictions have been both sector and country-specific and Avignon has adjusted accordingly.
Our approach was more sector-specific than country-specific. There wasn’t a set rule which worked for all; we had to create a bespoke solution for each tenant regardless if they were a local retailer or a major hotelier.
We adopted a number of bespoke technical and logistical measures which enabled us to understand each tenant’s unique financial position. For example, we simplified our scenario modelling, enabling us to quickly adapt cashflow management.
We had to adapt with assets that were in construction/fit-out stages by implementing new health and safety protocols and implementing new online viewing technology in response to localised viewing restrictions.
Communication across all stakeholders
In a broader sense, communication has been the golden thread defining every aspect of our pandemic response strategy.
“We realised quite quickly clients needed a lot more communication than previously – lockdown was new to everyone. So, we implemented weekly pandemic reports and follow- ups with our clients, in which we communicated the challenges and opportunities they faced and outlined how we would respond to them.” Steph Legh, Senior Asset Manager
A crucial part of that was our understanding and communication of government support packages and how each sector would need to grapple with its respective nuances.
At Avignon, we’ve importantly adopted a position of support rather than aggression, facilitating stronger relationships between landlord and tenants and in the process helping clients to understand how the pandemic will impact cashflows and rents. That’s desirable for all stakeholders and is only made possible through frequent and meaningful communication.
Experience of team
Our experience in crisis management has also been invaluable. Some of our team were at the coalface of the GFC recovery period and we’ve applied some of those learnings to our approach over the last year.
Our clients were able to benefit from the broad range of skill sets and expertise across each sector and region, ensuring that their unique challenges were given unique solutions.
Our experience in recovering economies also means we have laid the foundations for our clients to benefit from post-pandemic opportunities.
“We have in-depth knowledge of the trends and opportunities which emerge across every sector during times like these. It allows us to develop sophisticated, long-term strategies with the bigger picture in mind.” Andrew Lambert, Asset Manager
Stronger relationships as a result
It’s hard to find any positive from this devasting pandemic but what Avignon Capital can take away is that it has provided poignant lessons on communication and collaboration.
Investors, banks, landlords and other stakeholders have united around the predicament we all find ourselves in, and we’ve managed to build, sustain and strengthen relationships as a result.
There is hope that 2021 will be a year of recovery and we will take from this chaos the opportunity it provided to strengthen our relationships and work collaboratively together with all stakeholders.