REG - abrdn Euro Logistics - Portfolio Sales Update

abrdn European Logistics IncomeAnnouncement

24/01/2025 07:00

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RNS Number : 5260U  abrdn European Logistics Income plc  24 January 2025

24 January 2025

abrdn European Logistics Income plc
LEI: 213800I9IYIKKNRT3G50

Portfolio Sales Update

24 January 2025 - abrdn European Logistics Income plc (the "Company" or
"ASLI"), the Company which is invested in a diversified portfolio of European
logistics real estate, announces the sale of three assets as it pursues the
Shareholder approved managed wind-down.

In the NAV update released on 28 November 2024, the Company announced that the
Investment Manager had commenced sales processes for six assets with
discussions at an advanced stage regarding the disposal of three of these
assets. The Board is pleased to announce that the Company has now completed
the disposal of these three assets, as detailed here:

Sale of warehouse in Oss, The Netherlands

The Company announces that it has concluded the sale of the freehold of the
12,384 square metre warehouse located in Oss, The Netherlands, for
consideration of €15.7 million.

The asset, constructed in 2019 and strategically located between the Port of
Rotterdam and the Ruhr area, has been sold to the current tenant, Orangeworks.

The sale price was in line with the latest available valuation for Q3 2024
and, following the completion of the transaction, the Company has paid down
€9.9 million of the outstanding €44.2 million debt, which is cross
collateralised with Ede and Waddinxveen, provided by Berlin Hyp.

Sale of warehouses in Barcelona and Madrid, Spain

The Company also announces the sale of two assets located in Spain following a
competitive open sales process to Fidelity Real Estate Logistics for aggregate
consideration of €29.7 million, 11.9% ahead of the Q3 2024 valuation.

The 6,805 square metre building in Coslada, Madrid, was acquired by the
Company in 2019. It is a cross-dock warehouse built in 1999 and leased to DHL
(Spain) located in a prime location near Madrid Barajas Airport, within the
A-2 Corridor del Henares - considered the first logistics ring in Madrid.

The 13,907 square metre warehouse in Polinyà, Barcelona was constructed in
2018 and acquired by the Company in 2021. It is located in a prime area within
the first logistics ring 20 minutes from the city centre of Barcelona, close
to the AP-7 highway and is leased to Mediapost.

Of the net proceeds from the sale of these two Spanish properties, €17.7
million will be applied in paying down a portion of the €51 million ING Bank
secured debt, which is cross collateralised with Gavilanes, Madrid, Unit 4
occupied by Amazon, reducing the Company's gearing further.

Continued sales process

Detailed due diligence is ongoing over three assets in the Company's portfolio
representing some 90,000 square metres of rentable area and further details
will be released as sales complete.

Further assets are marked for sale with agents appointed with a view to
effecting further sales by the end of Q2. In parallel, the Investment Manager
continues to have an open dialogue with parties interested in prime logistics
space.

Leasing

The Company update dated 28 November 2024 noted that effective from 15 October
2024, MCR relocated and expanded from the Company's Unit 2B asset (7,718
square metres) in Getafe, Madrid, taking up the tenancy at the vacant Unit 3A
with increased space of 16,500 square metres. The agreed rent per annum is
€1,039,500 for a 7-year term lease with upward only CPI movements. MCR's
previous lease for Unit 2B had an approaching lease break in June 2025.

Simultaneously, Molecor, an international company in solutions for
infrastructure, building and waste treatment, took up the tenancy at Unit 2B
agreeing a 5-year lease with an annual rent per annum of €509,388, with
upward only CPI adjustments.

Both leasing deals were in line with the market ERV, reduced the vacancy rate
from 6.6% to 3.7% and improved the portfolio WAULT.

The Company is in advanced discussions on agreeing terms with an occupier for
Unit 3C and a refreshed marketing campaign, combined with a change of leasing
agent at Unit 1B, is expected to deliver increased enquiries.

This accretive leasing activity improved the Company's WAULT and further
enhanced the positioning of the portfolio in Getafe, Madrid, ahead of the
planned disposal in 2025. The Investment Manager continues to seek to enhance
value through such leasing initiatives prior to sales being advanced.

Managed Wind-Down

On 22 November 2024, approval was granted by Shareholders for the Company to
issue and redeem up to £300 million of B Shares. The Board believes that one
of the fairest and most efficient ways of returning substantial amounts of
cash to Shareholders remains by means of a bonus issue of redeemable B Shares.

The quantum and timing of a return of capital to Shareholders under a B Share
Scheme is dependent on the realisation of the Company's investments, the
repayment of liabilities and funding general working capital requirements. The
adoption of a B Share scheme will not limit the ability of the Company to
return cash to Shareholders by using other mechanisms and, if the B Share
scheme is adopted, the Board will continue to review its tax effectiveness and
cost efficiency over time.

The Company is in the process of repatriating the net proceeds from these
recent sales to the Parent company in a tax efficient manner, ensuring no
withholding tax issues, and will update Shareholders as soon as possible as to
the expected timing of an initial return of capital, which is expected later
in Q1 2025 at the latest.

 

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
 

Ben
Heatley
                    +44 (0) 20 7156 2382

Investec Bank
plc
                +44 (0) 20 7597 4000

David Yovichic

Denis Flanagan

FTI
Consulting
+44 (0) 20 3727 1000

Dido Laurimore

Richard Gotla

Oliver Parsons

 

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