abrdn Euro Logistics - Unaudited NAV as at 30 June 2022

abrdn European Logistics Income

22/08/2022 07:05

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RNS Number : 6772W  abrdn European Logistics Income plc  22 August 2022

 

LEI: 213800I9IYIKKNRT3G50

 

abrdn European Logistics Income plc

 

Unaudited Net Asset Value as at 30 June 2022, portfolio update and dividend

 

Increased weighting to high growth urban logistics sector and portfolio's
attractive indexation characteristics underpins compelling investment
proposition

 

22 August 2022 - abrdn European Logistics Income plc (LSE: ASLI), the Company
which invests in high quality European logistics real estate, announces its
unaudited quarterly Net Asset Value ("NAV") for the quarter ended 30 June
2022.

 

Highlights

 

·     Portfolio valuation of €680.4 million, a marginal decrease of
0.35%

 

·     NAV per Ordinary share decreased by 0.5% to 130.9c (GBp - 112.4p1)
(31 March 2022: 131.6c (GBp - 111.3p1)), reflecting a NAV total return of
10.6% (in Euro terms) for the 12 months to 30 June 2022

 

·     EPRA Net Tangible Assets2 decrease by 0.5% to 138.7c per Ordinary
share

 

·     Second interim dividend for 2022 of 1.41c (GBp - 1.20p) declared,
payable on 23 September 2022

 

·     Income enhancing asset management successes including:

 

o  Five year lease agreed with ADER on 7,375 sqm of previously vacant space
at Madrid Phase II, ahead of business plan

 

o  Completion of Madrid Phase IV Amazon hub

 

o  Delivery of highly sustainable warehouse extension at Waddinxveen, the
Netherlands

 

 

·     Acquisition of two well-located logistics properties, in Bordeaux
and Niort, for €23 million

 

·    Heads of Terms signed to acquire a further French logistics asset,
expected to complete late September 2022, following which the portfolio will
comprise 14 urban logistics warehouses and 12 mid-box logistics warehouses

 

·    €40m three-year debt facility agreed with ING Bank, secured against
Phases I to III of Spanish Madrid portfolio, at an all-in interest rate of
2.57%.

 

 

Evert Castelein, Fund Manager, abrdn, commented:

"The European logistics growth story remains highly compelling, fuelled by the
dual demands of e-commerce penetration and the way companies are reconfiguring
their supply chains. Importantly, vacancy rates remain at historically low
levels, with urbanised areas in particular facing acute supply shortages,
given the greater demand from other land uses.

"Alongside highly selective acquisitions, our primary focus is executing on
our pipeline of value-enhancing asset management initiatives, which have
included adding ADER to our tenant roster in Madrid and completing the
Waddinxveen extension with our tenant Combilo. We are also starting to see a
material benefit from the portfolio's attractive indexation characteristics,
which, in the unprecedented inflationary environment, is a clear and appealing
differentiator for investors."

 

Performance

The unaudited portfolio valuation decreased by a marginal €2.4 million in
the quarter, or 0.35%. This follows the appointment of Savills as valuation
advisor for the Company's Netherlands portfolio for Q1. Under the Company's
rotation policy, Savills has been engaged as sole valuer and has now valued
all portfolio properties for this quarter.

 

For the 12 month period to 30 June 2022, the Company's net asset value total
return was 10.6% in Euro terms (10.9% in sterling terms).

 

As at 30 June 2022, the Company's share price was 99.6p. At the close of
business on 19 August 2022 the share price was 103.4p.

 

Dividend

The Directors have declared a second interim distribution for the year ending
31 December 2022 of 1.41 euro cents (equivalent to 1.20 pence) per Ordinary
share. This second interim dividend will be paid in sterling on 23 September
2022 to Ordinary shareholders on the register on 2 September 2022 (ex-dividend
date of 1 September 2022).

 

Rent collection

100% of the expected rental income for the quarter ended 30 June 2022 has been
collected.

 

Madrid Portfolio

The Company announced in December 2021 the acquisition of a portfolio of newly
constructed last-mile logistics warehouses with excellent sustainability
credentials, located in the first ring of Madrid, Spain. Phase 4 of the
portfolio, which has been developed as an exclusive hub for Amazon and
benefits from a 25 year lease, was completed in July 2022.

 

On 10 August the Company agreed a new 5 year lease with ADER at the previously
vacant Unit 3, within Phase II at its Gavilanes site, Madrid. ADER provides
distribution services to companies in the freight and logistics sector and is
consolidating its operations in the Gavilanes area with the leasing of this
second, 7,375 sqm building. The letting is fully CPI indexed and accretive to
performance having completed well in advance of the guarantee timing
assumptions and at a rental level ahead of underwriting.

 

French acquisitions

On 1 August 2022 the Company announced the completion of the purchase of two
well-located freehold logistics properties in Bordeaux and Niort, France. The
aggregate purchase price of circa €23 million reflects a net initial yield
of 4.0%.

 

Both buildings are leased to the same German-owned global third party
logistics provider, operating as Dachser France. This long standing 3PL
operator has a strong financial covenant and both leases provide for annual
indexation. Site coverage is also low, at 22% and 9% respectively, providing
excellent opportunities for expansion in the future.

 

Waddinxveen extension completion

On 10 August the Company also announced that it had signed the purchase
agreement for the acquisition of the recently completed warehouse extension at
Waddinxveen, the Netherlands, for a total net purchase price of €4.9
million.

 

The extension provides an additional c. 2,400 sqm of cooled warehouse space
and 157 sqm of office space. This will allow Combilo to service its growing
client base, including a Swedish supermarket chain. The lease runs concurrent
with the original, with over 11 years remaining, and will generate additional
rent of c. €250,000 per annum, reflecting a yield of 5%. The extension
complies with the latest energy neutrality standards in the Netherlands and
includes 16 rooftop solar panels, resulting in an A+++ energy rating.

 

This asset management initiative is expected to be immediately value accretive
and enhances the income producing qualities of this modern, well-located
asset.

 

Debt Financing

On 7 July 2022 the Company secured a new €40m debt facility against Phases I
to III of its Spanish Madrid portfolio. A three-year term was agreed with ING
Bank at an all-in interest rate of 2.57%, effected using an interest rate
swap.

 

Post quarter end, the Company has drawn €50 million of its €70 million RCF
with Investec Bank, enabling completion of the final phase of the Madrid
portfolio. This increases the LTV to 30.1% (as at 19 August 2022), comfortably
below the Company's long term target of c. 35%. The Company intends to repay
the RCF with the planned debt financing of the now operational Phase IV.

 

The new ING facility provides additional flexibility around the Company's debt
strategy and the current all-in interest rate for the portfolio (excluding the
RCF) now sits at 1.66%.

 

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 April 2022 to 30 June 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 31 March 2022                               131.6                  542.2
 Unrealised change in valuation of property portfolio         (0.6)                  (2.4)                       Portfolio of 23 assets. Capital values decreased 0.35% to €680.4m, adjusted
                                                                                                                 by a true up of the Madrid Phase I-III acquisition
 Acquisition and capital expenditure costs during the period  0.3                    1.2
 Income earned during the period                              1.6                    6.8                         Income from the property portfolio and associated running costs
 Expenses for the period                                      (0.9)                  (3.7)
 Deferred tax liability                                       0.1                    0.5                         Net deferred tax liability on the difference between book cost and fair value
                                                                                                                 of the portfolio
 Distribution paid on 24 June 2022                            (1.4)                  (5.8)                       First interim dividend of 1.41 euro cents (1.19 pence) per Ordinary share
 Foreign currency gain                                        0.2                    0.7                         Foreign currency gain in the period
 Other movement in reserves                                   0.0                    0.1                         Movement in lease incentives in the quarter
 Net assets as at 30 June 2022                                130.9                  539.6

 

EPRA Net Tangible Assets per share is 138.7 Euro cents, which excludes
deferred tax liability.

 

Net Asset Value analysis as at 30 June 2022 (unaudited)

                                   €m       % of net assets
 Property Portfolio                680.4    126.1
 Adjustment for lease incentives   (4.7)    (0.9)
 Fair value of property portfolio  675.7    125.2
 Cash                              44.2     8.2
 Other Assets                      25.2     4.7
 Total Assets                      745.1    138.1
 Bank Loans                        (160.6)  (29.8)
 Other Liabilities                 (13.0)   (2.4)
 Deferred Tax Liability            (31.9)   (5.9)
 Total Net Assets                  539.6    100.0

 

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

 

The NAV per share at 30 June 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 30 June 2022 and the date of publication of this
statement which would have a material impact on the financial position of the
Company.

 

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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