TIDMASLI
RNS Number : 8239E
Aberdeen Standard Eur Lgstc Inc PLC
12 July 2021
12 July 2021
LEI: 213800I9IYIKKNRT3G50
Aberdeen Standard European Logistics Income PLC
(the "Company" or "ASLI")
Company Update
ASLI acquires EUR18.8 million urban logistics asset in
Barcelona, Spain, delivers strong valuation uplift and provides
tenant update
Aberdeen Standard European Logistics Income PLC (LSE: ASLI), the
Company which invests in high quality European logistics
properties, today provides a business update. Alongside completing
the acquisition of a sixteenth logistics asset in Barcelona, Spain,
the Company expects to report a robust net unaudited portfolio
valuation uplift of 1.9% for the quarter ended 30 June 2021.
Barcelona urban logistics acquisition
ASLI is pleased to announce the acquisition of a modern urban
logistics warehouse in Barcelona, Spain's second most populous
city. The purchase price of EUR18.8 million reflects a net initial
yield of 3.7% and net reversionary yield of 4.7%.
This 13,907 square metre asset is located in the first ring of
Barcelona, within a 25 minute drive (27km) of the city centre and
is well positioned to benefit from the growth of e-commerce and the
scarcity of development opportunities, which provides strong rental
growth potential. The local market is characterised by a low
vacancy rate of 3%, which falls to 1% for the first ring,
reflecting naturally occurring land constraints, with the city
surrounded by the sea and mountains.
The asset is located on the Polinyà Logistic Park, a
strategically positioned and highly consolidated industrial area
just off the AP-7 motorway that connects Barcelona with France and
the wider European market in the north, and to the south to
Zaragoza, Madrid and other key cities along the Mediterranean coast
of Spain.
This freehold asset, which was built in 2019 and meets modern
specifications, is fully let to Mediapost, a subsidiary of LA POSTE
Group, the French state-owned company, serving as its Spanish
headquarters. The property offers a high-grade specification of
c.11.5 metres clear height in the warehouse area, high quality
office accommodation, 10 loading docks, LED lighting and a small
solar PV installation which the Company will seek to enhance,
making this a very sustainable investment. Accelerating e-commerce
penetration and favourable demand supply dynamics offers rental
growth potential at the first mutual break option in 2026 or at
lease expiry in 2029, whilst rental income is indexed from 2023
onwards.
This is the Company's third investment in Spain and its first in
Barcelona, providing further diversification and taking the
portfolio gross asset value to c.EUR500 million across sixteen
assets. The acquisition has been funded using the Company's credit
facility. The debt is due to be recapitalised through the addition
of asset level financing on existing loan facilities in the
Netherlands where financing costs are amongst the lowest in
Europe.
Meung-sur-Loire update
As noted in previous announcements, Office Dépôt France, the
sole tenant occupying the Company's Meung-sur-Loire asset in
France, had sought court protection and the appointment of an
administrator. While the Company is yet to receive definitive
confirmation from the administrator as to the final outcome from
the completed sales process, the Company believes it is
increasingly likely that the purchaser of the business will seek to
terminate its tenancy of the warehouse.
Whilst recognising that this temporary loss of income will
impact dividend cover for the full year 2021, the Investment
Manager and the Board are confident of a positive outcome for what
is a highly attractive asset located in an area with strong demand
fundamentals underpinning stable rents.
As previously announced, the Q4 2020 rent was paid in full and
since the appointment of the administrator, the rent due for
February and March 2021 together with that due for Q2 2021 has also
been paid in full. In total, one month's rent plus a small element
of deferred rent, amounting in aggregate to EUR258k, remains
outstanding and is not expected to be collected. The annual passing
rent on the property currently represents 5.8% of the overall
portfolio's annual contracted rent, with the Company benefitting
from a three month rental security deposit held at bank.
The warehouse is ideally located for national distribution just
south of Orleans and close to main motorways towards Bordeaux/
Northern Spain and towards Marseille/ Lyon/ Toulouse, in an area
which has grown in importance due to the lack of greenfield
locations in and around Paris. The process of appointing agents to
seek new tenants and indications of interest is underway and the
Investment Manager will provide a further update in due course.
Following discussions with the asset level lending bank
regarding any potential temporary covenant breach, the bank has
indicated that it is satisfied with the current position thereby
avoiding any potential rental income cash traps.
Portfolio Valuation Update
Whilst the Company's unaudited Q2 2021 NAV is not expected to be
released until mid-August 2021, an initial valuation of the
portfolio indicates continuing strong momentum. Despite the short
term impact of a reduction in the value of the Meung-sur-Loire
asset of EUR6.5 million due to the expected temporary vacancy, the
overall unaudited portfolio valuation is expected to increase by
c.EUR8.7 million, or 1.9%. Excluding the Meung-sur-Loire asset,
this represents a strong portfolio valuation increase of 3.5%.
Yield compression and considerable demand for logistics warehousing
continues to drive valuations.
Evert Castelein, Fund Manager for ASLI, commented: "Adding
another high quality, modern urban logistics asset to the Company's
portfolio is a significant milestone, taking the gross portfolio
value close to EUR500 million. This newly built asset further
enhances the Company's strong sustainability credentials, with ten
of the sixteen assets constructed in 2018 or later. Barcelona,
Spain's second largest city by population, is a key business hub
within Europe and lies at the heart of a highly industrialised and
populated area along the Mediterranean Corridor, and we are
confident that this well-located asset will deliver real
shareholder value in the coming years.
"With the Investment Manager's offices located throughout
Europe, we believe we are well placed to continue sourcing
attractive investment opportunities for our shareholders and
delivering on our ambition to significantly scale the Company."
Tony Roper, Chairman of the Company, added: "The diversified
nature of our portfolio of warehouses and its long term inflation
linked income continues to attract strong interest supporting the
Company's share price growth. There is no doubt that investors
recognise the strong structural tailwinds benefitting the European
logistics real estate sector.
"The portfolio continues to deliver attractive valuation gains
for our shareholders. This reflects the modern, fit for purpose
nature of the assets sourced by our Investment Manager and the
strong credit profile of our occupiers, the majority of which are
directly exposed to the e-commerce sector. Despite the near term
impact the Meung-sur-Loire vacancy will bring, we remain confident
in the ability of the portfolio to deliver long-term value and in
our Investment Manager's ability to leverage its network of local
teams across Europe to source further value enhancing
acquisitions."
-Ends-
For further information please contact:
Aberdeen Asset Management PLC +44 (0) 20 7463 6000
Luke Mason
Gary Jones
Investec Bank plc +44 (0) 20 7597 4000
Dominic Waters
Neil Brierley
Will Barnett
David Yovichic
Denis Flanagan
FTI Consulting +44 (0) 20 3727 1000
Dido Laurimore
Richard Gotla
James McEwan
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