_Your partner in property - Samantha Freeman

What does your role entail?

As a Partner and national valuation lead in the Hotels, Gaming and Leisure division, I have a variety of responsibilities across the broader valuation business. My primary role is as a practising valuer, undertaking the valuation of hotels, resorts, casinos, major gaming, together with other tourism and leisure assets. I provide mortgage valuations for both established assets and for construction funding of hotels and resorts, expert witness services to the courts and legal profession, and alternate dispute resolution via rental submissions and determinations.

I thrive on the diversity of the role, which takes in the business and operational aspects along with the bricks and mortar, not to forget the interesting people I meet from all walks of life.

How has COVID-19 impacted your working life?  

COVID-19 has brought challenges, however I think we have adapted quickly and effectively as a company. For me it has curtailed travel, but I continue to work at full capacity from home. We are fortunate to have a dedicated team of valuers, assistant valuers, administrative staff and IT contractors who have really stepped-up and enabled the business to continue with barely a hiccup.

My usual commute time has been redirected to extra walks for Hank, the American Bulldog, and expert level organic sourdough baking. The work-life balance is important to maintain at the best of times, but especially so when working from home.

What is the market sentiment?

At the time of writing, we have re-entered lockdown at Stage 4 in Melbourne. Even so, I think Australia has fared particularly well in managing the pandemic, and we have a transparent economy with strong fundamentals.

The hotel and leisure sector has been significantly impacted by the shutdowns, but has benefited from pent-up demand when re-openings have been permitted. On the income side, the outlook is for a staged recovery as restrictions ease, primarily driven by domestic leisure markets, eventually opening internationally as hard borders lift. On the capital value side, the sentiment is that COVID-19 will be primarily an income story more so than a yield story, but with a yield margin differentiating between primary and secondary assets, as the market prices in risk again – a practice often absent in a hot market.  

What is happening with your existing clients? What business are you doing today?

Many of my clients are developing or funding the development of hotels which will be under construction during the worst impacts of COVID-19, expected to open during the post-covid recovery period. There is some optimism that despite high volumes of new stock coming on-stream between now and 2023, the new hotels will compete strongly against older properties.

Owner and developer clients are also reviewing their existing or proposed management and lease arrangements, and asset values outside of the mortgage review cycle. This is where our advisory services are an important adjunct to the more conventional valuation work, in meeting our clients' needs and providing the expert advice to assist in their decision-making during these challenging times.

What do you think the reminder of the year will be like?

I think the remainder of the year will see ongoing restrictions in the hotel and leisure space, which will continue to constrain market activity. What is evident is the emerging market acceptance that we will be entering a new normal, and that decisions cannot be held off indefinitely. Hotel developers, owners, operators and lenders will need to make decisions about how they move into the next phase of recovery - together.   

Accordingly, the client enquiry and work scheduled for the next few months is mostly advisory in nature, as commercial funding decisions are held off, and clients seek to review and reset project and lending timelines. There is also increased demand for expert witness reports, rent review submissions and determinations.   

Where might there be opportunities?

In the hotel and leisure sector, asset values and market rents are driven by trading outcomes. The COVID-19 environment has caused an unprecedented disruption to the sector, with some of the effects expected to be ongoing in the medium term such as international travel restrictions, impacting corporate, convention and leisure markets.

For our clients, I think there will be opportunities for those who are agile and adaptive, to create or evolve beyond the traditional accommodation product and service model. For investors and operators, it will be critical to manage risks, and to identify and meet both new and changing markets. Knight Frank Valuation & Advisory is well placed to assist, with expertise and market intelligence in local, national, regional and global networks. 

Given your lockdown experience, what insight have you taken from it?  

My elderly mother and I meet at the park to walk our dogs together – properly masked, 1.5m apart, at a gentle pace. Invariably, as we approach her car at the end of the walk, she elbow bumps me ‘like it ain’t no thang’, and drives off with a wave. I’ve no idea where she got onto the elbow bump protocol and, frankly, I find it a bit disconcerting. However, seeing her take the lockdown in her stride at the tender age of 89, reminds me that our greatest strengths are in acceptance, resilience, and adaptability. 

What are your final thoughts?

As cliched as it sounds, we really are all in this together.

For further information, please contact:

Samantha Freeman
Partner, Valuation & Advisory Victoria
+61 438 126 720
sfreeman@vic.knightfrankval.com.au