REG - abrdn Euro Logistics - Portfolio Update and NAV as at 31 March 2024

abrdn European Logistics IncomeAnnouncement

29/05/2024 07:00

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20240529:nRSc1585Qa&default-theme=true

RNS Number : 1585Q  abrdn European Logistics Income plc  29 May 2024

29 May 2024

LEI: 213800I9IYIKKNRT3G50

 

abrdn European Logistics Income plc

 

Portfolio Update and Unaudited Net Asset Value as at 31 March 2024

 

29 May 2024 - abrdn European Logistics Income plc (the "Company" or "ASLI"),
the Company which invests in a diversified portfolio of European logistics
real estate, announces its unaudited Net Asset Value ("NAV") for the quarter
ended 31 March 2024.

 

Summary

 -  Post period end, the Board announced the outcome of the Strategic Review on 20
    May 2024, concluding that it would be in the best interests of Shareholders as
    a whole to put forward a proposal for a managed wind-down of the Company

 -  The portfolio value declined 1.6% on a like-for-like basis to €606.29
    million (31 December 2023: €633.81 million), driven by continued, albeit
    slowing, outward yield movement, predominantly related to the assets in France
    and Germany

 -  NAV per Ordinary share decreased by 1.7% to 91.8c (GBp - 78.5p) (31 December
    2023: 93.4c (GBp - 81.2p))

 -  EPRA Net Tangible Assets decreased by 2.1% to 93.7c per Ordinary share (30
    December 2023 - 95.7c*)

 -  Interim dividend for 2024 of 1.41c (GBP - 1.21p) declared, payable on 5 July
    2024

 -  Completed the sale of the vacant French warehouse in Meung sur Loire, for
    €17.5 million, in line with the 31 December 2023 valuation and reflecting a
    modest discount to the 30 September 2023 valuation

 -  Proceeds from the sale of Meung sur Loire were used to pay down €11 million
    of a securitised loan with Bayern LB, reducing Loan to Value ('LTV') to 38.2%
    - fixed debt facilities totalled €248.5 million at an average all-in
    interest rate of 2.0%, with no major refinancings until mid-2025

 -  Completed a new three plus two year lease for 5,131 sqm of highly sustainable
    logistics space in Gavilanes, Madrid, 8.7% above the previous passing rent,
    with Spanish transportation company METHOD Advanced Logistics

 *Based on revised figures following 2023 audit

 

 

Troels Andersen, Lead Fund Manager, abrdn, commented:

"Market expectation is mounting that the ECB will start cutting interest rates
at its next monetary policy meeting in June, and despite a small valuation
decrease this last quarter, economic indicators are more positive for the
second half of this year. With the improving backdrop, and key long-term
structural drivers underpinning the logistics sector's rental and capital
growth prospects, we expect to see increasing investment activity for this
high conviction asset class. In the near-term, we are focused on letting up
the remaining vacant space in Madrid and leveraging our local expertise to
deliver indexation-driven rental uplifts, which reflect the strength of sub
markets where the portfolio is located."

 

Performance

The independent unaudited external valuation of the Company's property
portfolio undertaken by Savills (UK) Limited decreased on a like-for-like
basis by €10 million, or 1.6%, in the quarter. The French and German assets
witnessed the biggest declines (-5.2% and -4.2% respectively) with the balance
of the portfolio broadly flat.

 

For the year ended 31 March 2024, the Company's net asset value total return
with quarterly distributions reinvested was -13.9% in Euro terms (-16.2% in
sterling terms). As at 31 March 2024, the Company's share price was 60.8p, and
as at the date of this announcement the share price was 62.8p.

 

Rent Collection & Portfolio Update

As at the date of this announcement, 96% of the expected rental income for the
quarter ended 31 March 2024 has been collected.

 

During the quarter, the Company concluded discussions and agreed a surrender
of the lease agreement with Arrival, taking full possession of Units 3A, B and
C, Gavilanes, Madrid. As previously indicated, both the Investment Manager and
the Board believe that this was the best outcome, due to persistent
non-payment of rent and Arrival's financial situation, allowing the Company to
take full control of these units and progress an active leasing programme.

 

Reflecting the demand for Grade-A, sustainable logistics space in Spain, the
Company signed a new lease for 5,131 sqm of space, at Unit 3B with Spanish
transportation company METHOD Advanced Logistics ("METHOD"), completed 8.7%
above the previous passing rent. METHOD operates a fully flexible shipment
operation including large, complex bulky goods, as well as smaller, nimble,
last mile options. The new lease provides for a three plus two year agreement.
METHOD is implementing a capex programme at its own expense to deliver four
new docks in the façade of the building. The Investment Manager's
locally-based team continues to actively market the remaining units with
strong interest in the adjoining c. 6,000 sqm and c. 16,500 sqm units at Phase
3, Gavilanes.

 

During the quarter, the Company also completed the sale of its 30,180 sqm
vacant warehouse in Meung sur Loire, France, to Castignac. The €17.5 million
disposal price was in line with the 31 December 2023 valuation and reflected a
c. 7% discount to the 30 September 2023 valuation. The transaction increased
the portfolio occupancy rate and represented the Company's second disposal in
the last 12 months. The proceeds from the sale and associated repayment of an
€11 million securitised loan with Bayern LB reduced the Company's LTV to
38.2%, with an all-in interest rate of 2.0%, as well as improving the
Company's cash position.

 

The weighted average unexpired lease term (to break) now stands at 6.8 years
with the weighted average lease term (to expiry) now 8.1 years.

 

Debt Financing

At the end of the quarter, the Company's fixed rate debt facilities totalled
€248.5 million at an average all-in interest rate of 2.0%, the earliest
refinancing of debt is required in mid-2025. The current loan-to-value of
38.2% is marginally above the Company's target of c. 35%.

 

Interim Dividend

Following the conclusion of the Strategic Review, the Company announced an
interim dividend for 2024 of 1.41c (GBP - 1.21p), payable on 5 July 2024 to
shareholders on the register on 7 June 2024 (ex-date of 6 June 2024).

 

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 2024 to 31 March 2024. The
unaudited net asset value has been prepared under International Financial
Reporting Standards ("IFRS").

 

EPRA Net Tangible Assets per share is 93.7 euro cents, which excludes deferred
tax liability.

 

 

 

                                                                      Per Share (€ cents)     Attributable Assets (€m)    Comment
 Net assets as at 31 December 2023                                    93.4                    384.9
 Unrealised and realised decrease in valuation of property portfolio  (2.5)                   (10.0)                      Portfolio of 25 assets - capital values decreased by 1.6% over the quarter
 Realised loss on disposal of property                                -                       (0.2)                       Realised loss on sale of Meung sur Loire
 Income earned for the period                                         1.8                     7.4                         Income from the property portfolio and associated running costs
 Expenses for the period                                              (1.2)                   (4.7)
 Deferred tax liability                                               -                       (0.2)                       Net deferred tax liability on the difference between book cost and fair value
                                                                                                                          of the portfolio
 Interest rate swaps and caps/floors mark to market revaluation       0.1                     0.3                         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
 Other movements in reserves                                          0.2                     0.9                         Movement in lease incentives in the quarter
 Net assets as at 31 March 2024                                       91.8                    378.4

 

 

Net Asset Value analysis as at 31 March 2024 (unaudited)

                                    €m       % of net assets
 Fair value of Property Portfolio*  602.7    159.3%
 Cash                               28.4     7.5%
 Other Assets                       18.8     5.0%
 Total Assets                       649.9    171.8%
 External Debt                      (246.0)  -65.0%
 Other Liabilities                  (15.2)   -4.0%
 Deferred tax liability             (10.3)   -2.8%
 Total Net Assets                   378.4    100.0%

 

*After lease incentive adjustment

 

The NAV per share at 31 March 2024 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 2024 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
 

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

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  PFUQVLFLZELFBBD