Avignon Capital launched Noble Fund I in 2016 to pursue a Core-Plus strategy across the major European real estate markets. The fund has now reached €170m GAV over a two-year investment horizon.
The investment strategy was to build a European real estate portfolio providing a combination of income and capital return over an ‘evergreen’ investment period.
Noble’s first acquisition was the Ampere building in Q3 2016. Located in Prenzlauer Berg, an area widely regarded as a ‘tech-cluster’ in Berlin, and increasingly popular with young creative companies. The property was a former electricity transformer station built in 1926 but converted into offices in 2010.
Avignon Capital recognised the reversionary potential for the asset. Asset management initiatives such as refurbishment, leasing of vacant space, and improving rental tone have resulted in the value of the building increasing significantly.
In Q1 2017 two hotels were acquired in Frankfurt and Berlin let to European hotel chain Meininger, both strategically-located next to major transportation hubs. The hotels’ exceptional proximity to Berlin and Frankfurt’s prime transportation hubs will be key to the future value and growth of this investment; combined with the stable cash flow from the long-term leases and good covenant strength of the properties. They are both modern buildings with flexible alternative uses and extremely strong underlying land values.
Meininger Hotel, Frankfurt
In Q3 2017 Noble’s final close was used to acquire the NH Hotel, based in the Zuidas business district of Amsterdam – an area strategically-positioned between the city centre and Schiphol Airport. Amsterdam’s tourist industry has expanded rapidly over the last decade, resulting in a rising demand for well-located hotels.
The asset is securely let to a strong covenant for a further 40 years which offers a low risk, stable income base for the portfolio. The hotel has experienced year-on-year growth in income over the past few years. There is a top-up provision contained within the lease base on a percentage of the hotel’s revenue.
The Fund’s portfolio now has a combined WAULT of 20 years and has generated 27% in capital growth since its final close.