abrdn Euro Logistics - Company Update and Unaudited 31 December 2022 NAV

abrdn European Logistics Income

23/02/2023 07:00

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RNS Number : 7723Q  abrdn European Logistics Income plc  23 February 2023

 

LEI: 213800I9IYIKKNRT3G50

 

abrdn European Logistics Income plc

 

Company Update and Unaudited Net Asset Value as at 31 December 2022

 

23 February 2023 - abrdn European Logistics Income plc (LSE: ASLI), the
Company which invests in a diversified portfolio of European logistics real
estate, announces its unaudited quarterly Net Asset Value ("NAV") for the
quarter ended 31 December 2022.

 

Summary

 

·      The portfolio valuation decreased by €48.6 million, or 6%, from
€807.4 million to €758.7 million, primarily driven by market wide outward
yield movements as a result of rising interest rates

 

·      NAV per Ordinary share decreased by 8.0% to 118.9c (GBp -
105.4p1) (30 September 2022: 129.2c (GBp - 114.1p1)), reflecting a NAV total
return, with distributions reinvested, of -3.8% in Euro terms (+1.7% in
sterling) for the 12 months to 31 December 2022

 

·      EPRA Net Tangible Assets2 decreased by 8.7% to 125.5c per
Ordinary share (30 September 2022 - 137.4c)

 

·      Fourth interim dividend for 2022 of 1.41c (GBp - 1.20p) declared,
payable on 24 March 2023

 

·      The Company's Loan to Value remains within the stated target
range at 34%, with the Investec €70 million master loan undrawn at year end.
The Company's fixed debt facilities totalled €270.3 million at an average
all-in interest rate of 2.0% with the earliest re-financing required in
mid-2025

 

·      Post quarter end, completed a 4,000 sqm long-term lease renewal
in Niort, France, significantly ahead of ERV

 

Troels Andersen, Fund Manager, abrdn, commented:

"The portfolio valuation fell in the final quarter of 2022 as property yields
moved out and values weakened across all parts of the real estate sector, a
result of rapid central bank rate rises. Despite this, the portfolio has
demonstrated its resilience versus the greater declines witnessed in the wider
listed sector, reflecting the strategic location of our assets, the strength
of the occupational market supported by historically low vacancy rates and
that the majority of our leases are subject to annual indexation. Whilst we
expect the macroeconomic uncertainty to persist in the first half of 2023, the
critical undersupply of Grade-A space and continued supply chain
reconfiguration should underpin ongoing rental growth."

 

Performance

The unaudited portfolio valuation decreased by €48.6 million in the quarter,
or 6.0%, with activity in the markets of the Netherlands and Spain reflecting
slightly greater yield expansion compared to those of France, Germany and
Poland.

 

For the 12 month period to 31 December 2022, the Company's net asset value
total return with distributions reinvested was -3.8% in Euro terms (+1.7% in
sterling terms, calculated on a quarterly basis). Despite the negative Euro
NAV total return for 2022, the Company has delivered an annualised NAV total
return of 5.2% since launch in Euro terms (5.3% in sterling).

 

Dividend

As previously announced, the Directors have declared a fourth interim
distribution for the year ended 31 December 2022 of 1.41 euro cents
(equivalent to 1.20 pence) per Ordinary share, which is unchanged from the
previous period. The fourth interim dividend will be paid in sterling on 24
March 2023 to Ordinary shareholders on the register on 3 March 2023
(ex-dividend date of 2 March 2023).

 

Rent collection & Asset management

100% of the expected rental income due for the quarter ended 31 December 2022
has been collected.

 

Post the quarter end, the Company agreed a new 9.5 year lease with Dachser
France at its La Creche, Niort, property. The new rent is 3% ahead of previous
annual rent payable and significantly ahead of the 30 September 2022 ERV,
reinforcing the value of this asset to the tenant, the strategic significance
of the location and the continued upward pressure on real rents. Uncapped
annual ILAT indexation has been agreed, with the next uplift effective 2025.
This will backdate to January 2023 when calculated.

 

The Company is in advanced discussions on a new lease extension at another of
its French assets and will provide further details in due course.

 

Debt Financing

At the end of the quarter, the Company's fixed debt facilities totalled
€270.3 million at an average all-in interest rate of 2.0% and with a loan to
value of 34%. The Company's secured fixed rate debt supports its investment
objective with the earliest re-financing of debt required in mid-2025.

 

Breakdown of NAV movement

Set out below is a breakdown of the change to the unaudited net asset value
per Ordinary Share over the period from 1 October 2022 to 31 December 2022.
The unaudited net asset value has been prepared under International Financial
Reporting Standards ("IFRS").

 

                                                              Per Share (€cents)     Attributable Assets (€m)    Comment

 Net assets as at 30 September 2022                           129.2                  532.5
 Unrealised decrease in valuation of property portfolio       (11.8)                 (48.6)                      Portfolio of 27 assets. Capital values decreased by 6%
 Acquisition and capital expenditure costs during the period  (0.1)                  (0.5)
 Income earned during the period                              2.1                    8.5                         Income from the property portfolio and associated running costs
 Expenses for the period                                      (1.3)                  (5.4)
 Deferred tax liability                                       1.9                    8.0                         Net deferred tax liability on the difference between book cost and fair value
                                                                                                                 of the portfolio
 FX hedge mark to market revaluation                          (0.0)                  (0.0)                       Movement in the mark to market value of a dividend hedge in Q4 2022 to fix the
                                                                                                                 EUR:GBP conversion of the 2022 dividend
 Interest rate swaps and caps/ floors - mark to market        0.3                    1.2                         Movement in the mark to market value of interest rate swap and options hedge

                                                                                                               maturing in 2025 to fix interest rates of bank loans drawn by Spanish SPV's
 revaluation
 Distribution paid on 30 December 2022                        (1.4)                  (5.8)                       Third interim dividend for 2022 of 1.20 pence (1.41 euro cents) per

                                                                                                                 Ordinary Share
 Foreign currency gain                                        0.1                    0.5                         Foreign currency gain in the period
 Other movements in reserves                                  (0.1)                  (0.4)                       Movement in lease incentives in the quarter
 Net assets as at 31 December 2022                            118.9                  490.0

 

EPRA Net Tangible Assets per share is 125.5 Euro cents, which excludes
deferred tax liability.

 

Net Asset Value analysis as at 31 December 2022 (unaudited)

                                   €m       % of net assets
 Property Portfolio                758.7    154.8
 Adjustment for lease incentives   (4.7)    (1.0)
 Fair value of property portfolio  754.0    153.8
 Cash                              20.3     4.1
 Other Assets                      25.6     5.3
 Total Assets                      799.9    163.2
 Bank Loans                        (270.3)  (55.2)
 Other Liabilities                 (15.2)   (3.1)
 Deferred Tax Liability            (24.4)   (4.9)
 Total Net Assets                  490.0    100.0

 

The property portfolio valuation is based on the independent external
valuation of the Company's direct property portfolio undertaken wholly by
Savills (UK) Limited.

 

The NAV per share at 31 December 2022 is based on 412,174,356 shares of 1
pence each, being the total number of Ordinary shares in issue at that time.
As at the date of this announcement, the Company's share capital consists of
412,174,356 Ordinary shares with voting rights.

 

The Board is not aware of any other significant events or transactions which
have occurred between 31 December 2022 and the date of publication of this
statement which would have a material impact on the financial position of the
Company.

 

Footnotes:

1 Exchange rate £1 : €1.13 (30 September 2022: £1 : €1.13)

2 EPRA Net Tangible Assets focuses on reflecting a company's tangible assets
and the calculation assumes entities buy and sell assets, thereby
crystallising certain levels of deferred tax liability

 

Details of the Company and its property portfolio may be found on the
Company's website at: http://www.eurologisticsincome.co.uk

 

For further information please contact:

abrdn Fund Managers Limited
                +44 (0) 20 7463 6000

Luke Mason

Gary Jones

 

Investec Bank
plc
                +44 (0) 20 7597 4000

David Yovichic

Denis Flanagan

 

FTI
Consulting
+44 (0) 20 3727 1000

Dido Laurimore

Richard Gotla

James McEwan

 

The above information is unaudited

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