abrdn Euro Logistics - Unaudited Q1 2022 NAV and Company Update

abrdn European Logistics Income

30/05/2022 07:00

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RNS Number : 1475N  abrdn European Logistics Income plc  30 May 2022

 

LEI: 213800I9IYIKKNRT3G50

 

abrdn European Logistics Income plc

 

Unaudited Q1 2022 NAV and Company Update

 

Occupational demand and increasing focus on urban warehousing underpinning
further valuation and NAV growth

 

30 May 2022 - abrdn European Logistics Income plc (LSE: ASLI), the Company
which invests in high quality European logistics properties, announces its
unaudited quarterly Net Asset Value ("NAV") for the quarter ended 31 March
2022.

 

Highlights

 

·     Portfolio valuation increased by 2.5%, or €16.8 million to
€682.8 million, reflecting inflation-linked rental growth and further yield
compression

 

·     NAV per Ordinary share increased by 1.9% to 131.6c (GBp - 111.3p 1)
(31 December 2021: 129.1c (GBp - 108.5p 1)), reflecting a NAV total return of
13.0% (in Euro terms) for the 12 months to 31 March 2022

 

·     EPRA Net Tangible Assets2 increased by 2.2% to 139.4c per Ordinary
share (31 December 2021: 136.4c)

 

·     100% of Q1 2022 rent collected

 

·     First interim dividend for 2022 of 1.41c (GBp - 1.19p) declared,
payable on 24 June 2022

 

·     Construction of Madrid Phase IV scheduled to complete in late Q2
2022, increasing portfolio valuation to €763 million, using agreed purchase
price

 

·     Agreement signed for the purchase of three French urban logistics
assets, for €32.5 million, on completion of which the portfolio will
comprise 16 urban logistics warehouses and 11 mid-box logistics warehouses

 

·     Issue of new equity raising £38 million (€45.6 million) to
support near-term acquisition strategy

 

Evert Castelein, Fund Manager, abrdn, commented:

 

"It is very pleasing to report another quarter of NAV growth. This reflects
both the strength of the European logistics market and the high quality nature
of our diversified, modern portfolio.

 

"Logistics is a long-term growth story, fuelled by the acceleration of
e-commerce across Europe, and increasingly the changes in how companies manage
their supply chains. There continues to be an acute supply-demand imbalance
across the entire European logistics market, with vacancy rates sitting at
historically low levels and this is particularly true in urban areas where
there is greater demand from other land uses. Our portfolio is also well
positioned to benefit from rising inflation, with 70% of the portfolio's
current income subject to full annual indexation."

 

Performance

The unaudited portfolio valuation increased by €16.8 million in the quarter,
or 2.5%, on a like-for-like basis.

 

For the 12 month period to 31 March 2022, the Company's net asset value total
return was 13.0% in Euro terms (12.1% in sterling terms).

 

As at 31 March 2022, the Company's share price was 110.0p.

 

Dividend

On 24 May 2022, the Directors declared a first interim distribution for the
year ending 31 December 2022 of 1.41 euro cents (equivalent to 1.19 pence) per
Ordinary share. This first interim dividend will be paid in sterling on 24
June 2022 to  shareholders on the register on 6 June 2022 (ex-dividend date
of 1 June 2022).

 

Madrid Last-mile Portfolio

On 14 December 2021, the Company announced 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 IV of the
portfolio is pre-let to Amazon on a 25-year lease and final completion is
expected in late June, following which it will be fully income producing for
ASLI.

 

French acquisition

In May the Company signed a purchase agreement for the acquisition of three
well located urban logistics assets for a total consideration of €32.5
million. The properties are leased to a well-established global third party
logistics provider, and all three leases include annual indexation linkage.
Site coverage across this portfolio of assets is low offering longer-term
value add opportunities. Completion of this acquisition is expected to be
announced in Q3.

 

Equity raise

On 4 February 2022, the Company issued 34,545,455 new Ordinary shares at a
price of 110.0 pence per new share. This issue raised an additional £38
million (€45.6 million) enabling the Company to continue with its near-term
acquisition strategy. As at 30 May 2022, the Company's share capital consists
of 412,174,356 Ordinary shares with voting rights.

 

Pipeline

The Investment Manager remains in exclusivity on a 6,900 sqm distribution
warehouse located in the Netherlands, leased to a well-established food
focused operator. With a growing tenant and low site coverage, the Investment
Manager believes the asset offers attractive medium-term asset management
opportunities.

 

Debt Financing

The Company's revolving credit facility agreement with Investec Bank,
totalling €70 million, remains available and provides flexibility for the
acquisition of new properties. As at 31 March 2022, the Company level loan to
value ("LTV") ratio was 21.5%. The Investment Manager is currently working
with the Company's lenders to put long term debt in place over the portfolio's
Spanish assets which will provide additional financing for further
acquisitions. The Company's target LTV remains at or around 35%.

 

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 January 2022 to 31 March 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 December 2021                            129.1                  487.5
 Unrealised change in valuation of property portfolio         4.1                    16.8                        Capital values increased 2.5% or €16.8 million on a like-for-like basis

 Acquisition and capital expenditure costs during the period  (0.0)                  (0.1)
 Income earned during the period                              1.7                    7.2                         Income from the property portfolio and associated running costs
 Expenses for the period                                      (0.6)                  (2.6)
 Deferred tax liability                                       (1.2)                  (4.9)                       Net deferred tax liability on the difference between book cost and fair value
                                                                                                                 of the portfolio
 FX hedge mark to market revaluation                          0.0                    (0.1)                       Movement in the mark to market value of a hedge entered into to fix the
                                                                                                                 EUR:GBP conversion of the 2021 dividend
 Distribution paid on 25 March 2022                           (1.4)                  (5.8)                       Fourth interim dividend of 1.41 euro cents (1.21 pence) per Ordinary share
 Share issuance on 4 February 2022                            (0.1)                  44.2                        Issue of 34,545,455 new Ordinary shares
 Net assets as at 31 March 2022                               131.6                  542.2

 

EPRA Net Tangible Assets per share is 139.4 Euro cents, which excludes
deferred tax liability.

 

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

                                   €m       % of net assets
 Property Portfolio                682.8    125.9
 Adjustment for lease incentives   (5.0)    (0.9)
 Fair value of property portfolio  677.8    125.0
 Cash                              51.6     9.5
 Other Assets                      20.9     3.9
 Total Assets                      750.3    138.4
 Bank Loans                        (160.5)  (29.6)
 Other Liabilities                 (15.2)   (2.8)
 Deferred Tax Liability            (32.4)   (6.0)
 Total Net Assets                  542.2    100.0

 

The property portfolio valuation is based on the independent external
valuation of the Company's direct property portfolio undertaken by CBRE GmbH
and Savills Aguirre Newman Valoraciones y Tasaciones, S.A.U.

The Company recently published a supplementary prospectus approved by the
Financial Conduct Authority (the "Supplementary Prospectus"). The publication
of the Supplementary Prospectus is a regulatory requirement under the
Prospectus Regulation Rules following the publication of the Company's audited
annual financial report and accounts. The Supplementary Prospectus is
supplemental to, and should be read in conjunction with, the prospectus
published by the Company on 8 September 2021 in respect of the Company's Share
Issuance Programme.

A copy of the Supplementary Prospectus will shortly be available for
inspection at the National Storage Mechanism which is located at
https://data.fca.org.uk/#/nsm/nationalstoragemechanism.

The Supplementary Prospectus is also available in electronic form on the
Company's website at www.eurologisticsincome.co.uk

The NAV per share at 31 March 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 March 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 also be found on the
Company's website which can be found at: http://www.eurologisticsincome.co.uk

 

For further information please contact:

Aberdeen Standard 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

 

1 Exchange rate £1 : €1.19 (31 December  2021: £1 : €1.19)

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

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