London-based property investment firm and asset manager Avignon Capital has cleared its first hurdle toward Australia expansion. The firm has received approval to invest in office real estate and hotel development in Australia, according to a report from Europe Real Estate.
Avignon Capital previously invested in Europe alone, but the firm has decided to expand its network across the Sydney, Melbourne and Brisbane markets. The asset manager has planned to benefit from the region’s stable macroeconomic and investment climate, which remained strong in 2016 and 2017 and is expected to continue. The market saw a 94-percent surge in direct commercial real estate investment in Q2 2017, compared to the previous quarter.
Avignon Capital has claimed that Sydney and Melbourne have out-shined other Australian markets in both office real estate and hotels. In terms of hotel real estate, the two cities achieved over 80 percent occupancy rates and have continued to expand over the past ten years, meeting the rise in foreign tourism. International visitors numbers to the continent are rising at over double the 3.9-growth rate for global outbound travelers. That number grew by 44 percent since 2009.
In the office real estate market, Avignon Capital has found Sydney and Melbourne particularly attractive, claiming the cities as the best performing in the continent. According to a PwC report, Sydney and Melbourne have achieved the highest projected rental growth of any city in the Asia Pacific at 3.8 percent and 3.7 percent, respectively.
According to year-to-date reports, Avignon Capital has completed 18 acquisitions and seven disposals in Europe in a record deal volume of €565 million. The firm received triple-digit returns from a number of these property sales, including the sale of its Copenhagen retail portfolio. Avignon Capital earned a 154-percent return on equity from that deal. Meanwhile, the asset manager strengthened its presence in the Netherlands, entering the country’s hotel market and launching a new Berlin office.