Net Asset Value as at 30 June 2019

RNS Number : 7322K

Aberdeen Standard Eur Lgstc Inc PLC

30 August 2019

 

Aberdeen Standard European Logistics Income PLC

LEI: 213800I9IYIKKNRT3G50

Net Asset Value as at 30 June 2019

30 August 2019:  Aberdeen Standard European Logistics Income PLC (LSE: ASLI) (the "Company" or "ASLI") announces its unaudited quarterly Net Asset Value ("NAV") as at 30 June 2019.

Highlights

·     NAV per Ordinary share of €1.07 as at 30 June 2019 (31 March 2019 - €1.06) (GBP - 95.85p, 31 March 2019 GBP - 91.13p). Exchange rate £1:€1.11 (31 March 2019: £1:€1.16).

·     Portfolio capital value has increased by 1.7% since 31 March 2019 (after capital expenditure and acquisition costs, including those relating to the Leon warehouse acquired in the quarter). The Company's high quality and well-diversified European logistics portfolio is now valued at €272.7 million.

·     In July, the Company raised gross proceeds of £46.4 million (€51.8 million at the then prevailing exchange rate) through a placing, open offer and offer for subscription of Ordinary shares, with the proceeds expected to be deployed shortly in the acquisition of two logistics warehouses in Poland and the Netherlands.

·     A new 12-month share issuance programme put in place providing the Company with the flexibility to raise fresh equity proceeds for deployment in a timely and cost-effective fashion through the issue of up to 200 million Ordinary Shares and/or C Shares in aggregate.

·     The first interim dividend of 1.27 pence per Ordinary share in respect of the year ending 31 December 2019 was paid on 10 July 2019.

Completion of acquisitions and debt financing

·     During the quarter the Company completed three acquisitions with a net value of €60.25 million. The Company:

Ø Completed the acquisition of a newly built freehold logistics warehouse in Leon, Spain for a net value of €15.3 million, providing a net initial yield of 6.2%. The warehouse is located in a logistics park near Leon city centre and its airport with excellent road connections to the AP71, A66 and A231.

Ø Announced that the remaining forward funded project in Oss, the Netherlands, built in conjunction with developer Heembouw Breda B.V., had been handed over to its new tenant, Orangeworks, and that is therefore now fully income producing. The purchase price of €15.7 million provides a net initial yield of 5.3%.

Ø Completed on the newly built warehouse in Zeewolde, the Netherlands, for the previously indicated purchase price of €29.25 million, providing a net initial yield of 5.0%.

Since the quarter end, the Company has completed the acquisition of a freehold logistics warehouse in 's Heerenberg, the Netherlands, for a net purchase price of €24.0 million, providing an expected net initial yield of 5.0%. The acquisition was in part financed through a six year term loan from Berlin Hyp for a total value of €8.0 million, at an attractive all-in interest rate.

Share issuance

On 26 July 2019, the Company announced that it had raised gross proceeds of approximately £46.4 million (equivalent to approximately €51.8 million at the then prevailing exchange rate) through the issue of 47 million new Ordinary Shares pursuant to a placing, open offer and offer for subscription.

These proceeds will be used to help fund the pipeline of attractive investment opportunities identified by the Company's Investment Manager, in particular two logistics warehouses in Poland and the Netherlands.

The Company also put in place a new share issuance programme in July, pursuant to which it has the ability to issue up to 200 million Ordinary Shares and/or C Shares in aggregate. The programme is flexible and may have a number of closing dates, providing the Company with the ability to issue Shares on appropriate occasions over a 12 month period in a timely and cost-effective fashion to fund further acquisitions from its strong pipeline of investment opportunities.

Investment Manager Commentary

At the end of June, following the addition of the newly built warehouses in Oss and Zeewolde, together with the completion of Leon, the Company's portfolio consisted of ten properties, spread across five countries, with a total net market value of €272.7 million. In July, the portfolio increased to eleven properties following the completion of 's Heerenberg for €24 million.

ASLI's portfolio is geographically well-diversified, with assets located in the Netherlands, one of the most attractive logistics markets in Europe, representing the largest allocation in the portfolio (44% of gross asset value incl. 's Heerenberg). As at 30 June, the weighted average unexpired lease term of the portfolio was 9.1 years including breaks and 10.2 years excluding breaks (both incl. 's Heerenberg).

The debt strategy of the Company is to finance properties in countries such as the Netherlands, France and Germany, where funding costs are low. We were particularly pleased with the June financing, secured against assets in Ede, Oss and Waddinxveen for a total amount of €37.7 million over a fixed six year term, which was implemented at an attractive all-in interest rate of 1.22% per annum. In July, the €8 million fixed six year loan secured on 's Heerenberg proved even more competitive as Euribor slid further into negative territory.

The additional equity raised in July will enable us to acquire two newly built warehouses in the Netherlands and Poland where we have strong ties through our dedicated transaction managers. These acquisitions will further diversify the portfolio and tenant base, with completion announcements expected in September/October following the conclusion of our detailed due diligence process. After completion of these investments, gearing is expected to stay close to the targeted 35%.

Aberdeen Standard Investments is the second largest property investor in Europe (in terms of assets under management) and benefits from both transaction and asset management teams based locally across all major European logistics hubs, differentiating us from many other investors. Thanks to a team-based approach we have built a very well-diversified, high quality property portfolio (eight warehouses are newly built) with long leases to strong covenant tenants. Adding value to the portfolio is a key objective with the installation of solar photovoltaic cells a key focus over the next 12 months. We aim to further improve the Company's green performance with additional initiatives and we will maintain active engagement with our tenants to ensure their ongoing satisfaction with the properties they occupy. In addition, we will continue to pro-actively explore extension opportunities for certain properties with low site coverage, working closely with our tenants as they seek to grow their businesses.

The European logistics market continues to modernise rapidly with growing tenant demand fuelled by the rapid growth of e-commerce across Europe and the consequent supply chain reconfiguration as operators embrace the rapid pace of technological advancement. Of note is the acceleration of interest and demand amongst logistics occupiers to adhere to higher ESG standards and we recognise and embrace this fundamental change in occupational demand for suitable buildings.

We believe that there continues to be attractive occupier dynamics in the market that will support income growth, and ultimately increasing capital values, underpinned by longer, index-linked leases which typically offer annual CPI adjustments providing for transparent and predictable cash flows.

Breakdown of NAV movement

Set out below is a breakdown of the change to the unaudited net asset value per Ordinary share calculated under International Financial Reporting Standards ("IFRS") over the period from 1 April 2019 to 30 June 2019.

Aberdeen Standard European Logistics Income	Per  Share (€cents)	Attributable Assets (€m)	Comment
Net assets as at 31 March 2019	105.8	198.3
Unrealised increase in valuation of property portfolio	10.1	18.9	Portfolio of 10 assets, capital value increased 1.7% (after capital expenditure and acquisition costs) compared to March 2019 and including the property acquired in Leon in the quarter. The forward funding assets in Oss and Zeewolde both completed in the quarter and represent the majority of capital expenditure incurred.
Capital expenditure during the period	(7.9)	(14.8)
Income earned for the period	1.5	2.9	Income from the increased property portfolio and associated running costs.
Expenses for the period	(0.8)	(1.3)
FX hedge mark to market revaluation	(0.2)	(0.4)	Movement in the mark to market value of a dividend hedge entered into in Q1 2019 to fix the EUR:GBP conversion of the annual dividend.
Dividend declared 12 June 2019	(1.4)	(2.7)	First interim dividend of 1.27 pence per Ordinary Share.
Net assets as at 30 June 2019	107.1	200.9

The EPRA NAV per share is 107.3 Euro cents, which excludes deferred tax and fair value of the FX derivative.

Net Asset Value analysis as at 30 June 2019 (unaudited)

	€m	% of net assets
Total Property Portfolio	272.7	135.8%
Adjustment for lease incentives	(0.4)	(0.2%)
Fair value of Property Portfolio	272.3	135.6%
Cash	23.7	11.8%
Other Assets	10.4	5.2%
Total Assets	306.4	152.6%
Bank Loans	(92.9)	(46.3%)
Current liabilities	(11.8)	(5.9%)
Deferred tax liability	(0.8)	(0.4%)
Total Net Assets	200.9	100%

The NAV per share is based on the external valuation of the Company's direct property portfolio undertaken by CBRE.

The NAV per share at 30 June 2019 is based on 187,500,001 shares of 1 pence each, being the total number of shares in issue at that time.

Tony Roper, Chairman, commented:

"Based on healthy fundamentals, the medium to long term outlook for the logistics sector remains very favourable. Structural shifts in consumption patterns in Europe, which have lagged the UK's progress, and overall demand drivers are expected to remain supportive. Our portfolio of high-quality, well-located, warehouses with long indexed leases should underpin yield and capital growth expectations.

The recent equity issue, with the relevant gearing applied, will enable the Investment Manager to secure two additional newly built warehouses, further diversifying the portfolio by asset and tenant base. It is particularly pleasing to note the quality of the assets assembled in the portfolio by our Investment Manager. As market conditions allow, the intention remains to grow the portfolio with additional acquisitions through further capital raises using the twelve month share issuance programme approved recently by our shareholders."

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014).  Upon the publication of this announcement via a Regulatory Information Service this inside information is now considered to be in the public domain.

Details of the Company may also be found on the Company's website which can be found at: http://www.eurologisticsincome.co.uk

For further information please contact:

Charles Mearns

Aberdeen Asset Management PLC

0131 528 4000

The above information is unaudited.

 

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