However, he acknowledged challenges given the fragile state of the recovery.
“We recognise that we are in recession and we’ve already seen Melbourne and Sydney vacancy rates more than double and we have constant supply. So I think there will be some headwinds but overall it gradually will return to normality.”
Retail has been hit hard by lockdown restrictions and the increased adoption of online shopping, but Mr Berry said having a physical retail presence as well as online was vital for new-economy companies.
He noted Amazon’s acquisition of Whole Foods and Tesla’s store in the Chadstone shopping centre in Victoria.
“If you’re just in the virtual world, you’re not going to be a real winner. You’ve got to be across the full spectrum of the virtual and the physical world. The physical world can be your beacon for activity and service and then your online can be for fulfilment.”
While REITs could benefit from the easing of restrictions and recovery in growth, fund managers are concerned the rebound for airports may take longer.
“The longer-term outlook for airports remains very opaque,” said Steven Kempler, portfolio manager of Maple-Brown Abbott’s global listed infrastructure fund.
“On the business travel side, the growing consensus and it’s not a surprise is that business travel demand in the future, or at least the trip multiplier, will be a lot lower than it was pre-COVID.”
He said business travel accounted for a large share of traffic through large airports such as Sydney and Melbourne, with more than 50 per cent of passengers traffic through Sydney Airport’s Terminal 3 being business travellers.
The lingering concerns about the virus would also impact holiday makers, with those who had travelled long haul more likely to take short trips or maybe drive.
“We think the outlook for volumes is certainly a lot more strained in the next few years.”
Australia’s closure of its borders to non-citizens and residents will depress international passenger numbers, with the impact also felt within the retail offerings at airports.
“Airports aren’t pure infrastructure businesses, they’re also shopping centres.”
“They generate a lot of value from that non-aeronautical businesses like duty free, retailing, food and beverage. And without the return of international passengers you do have a much slower recovery in earnings.”
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