RCS - abrdn Euro Logistics - Update research from QuotedData

abrdn European Logistics Income

12/01/2023 17:13

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RNS Number : 5919M  abrdn European Logistics Income plc  12 January 2023

 

 

 

 

 

abrdn European Logistics Income - Update research from QuotedData

12(th) January 2023

Negotiating choppy waters

High interest rates have hit the share prices of real estate companies, with
those in sectors with low investment yields, such as logistics, particularly
impacted. abrdn European Logistics Income (ASLI) is no different and the
market turmoil has seen its share price discount to net asset value (NAV)
widen to 34.0% - in line with its UK peers. This is despite the fact that the
spread between property yields and the cost of debt is far wider in Europe
(property yields were higher in Europe than the UK and cost of debt lower
meaning rising interest rates would put less pressure on property yields in
Europe in comparison to the UK and suggesting values will be less impacted).

The fundamentals of the European logistics sector remain strong. A chronic
shortage of supply (below 3% across Europe and as low as 2% in prime markets)
and robust demand should see strong rental growth remain. ASLI's income is
linked to inflation, with 66% of it uncapped (meaning rents increase annually
in line with inflation), which will feed through to stronger rental growth
this year and next. This should off-set inevitable valuation declines as
investment yields rise.

Meanwhile, ASLI's borrowings are fixed for an average of four years at an
interest rate cost of around 2%. The wide discount to NAV and dividend yield
on offer appears attractive for a long-term investment.

Full Research:

https://quoteddata.com/research/abrdn-european-logistics-income-negotiating-choppy-waters-qd/
(https://quoteddata.com/research/abrdn-european-logistics-income-negotiating-choppy-waters-qd/)

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NB: Marten & Co was paid to produce this note on abrdn European Logistics
Income Plc and it is for information purposes only. It is not intended to
encourage the reader to deal in the security or securities mentioned in this
report. Please read the important information at the back of this note.
QuotedData is a trading name of Marten & Co Limited which is authorised
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