Avignon Capital has sold its prime retail portfolio in Copenhagen to Hines, the global real estate investment management firm, for €119m, achieving a 135% return on equity.
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 units are let to international retailers, including Superdry and Benneton. The property manager of the five Copenhagen assets is Capital Investments.
The portfolio was assembled by Avignon Capital between Q2 2012 and Q1 2014, at a time when few international investors were in the market and yields were heavily discounted, in comparison to other European capital cities. Avignon Capital identified the Copenhagen retail market as having significant growth opportunities offered by its rapidly growing tourism industry and high domestic spending power.
Avignon Capital further increased the value of the portfolio with active asset management initiatives, including the development of a new 8,000 sq ft ground floor retail unit within the Købmagergade property, which was completed in Q2 2016 and let to international retailer Superdry, increasing rent by 200% since acquisition.
Eric Mounier, CEO at Avignon Capital, said, “The Copenhagen portfolio sale has created another extraordinary return on equity of 100% for Avignon Capital, underpinning our ability to identify market opportunities ahead of the curve and execute innovative acquisitions.
Since we 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 Avignon’s assets. As our expansion accelerates in 2017, we will continue to look for innovative opportunities in both the Danish and wider European markets.”
Jesper Damborg, CEO at Capital Investments added, “Avignon Capital was the first investor to enter the Copenhagen high street market following the financial crisis and at Capital Investment we are proud to have introduced several attractive investments to Avignon Capital, which have now lead to a very successful exit. We are also very pleased to continue the asset management on behalf of the new owner, Hines.”
In Q1 2016, Avignon Capital completed the sale of the Amagertorv 2 building in Copenhagen, the Danish home of Louis Vuitton, for €26.8m, which set a new benchmark yield for retail in the Copenhagen market and crystallised a return on equity of 112% in under 4 years.