Net Asset Value as at 30 September 2019

RNS Number : 0576W

Aberdeen Standard Eur Lgstc Inc PLC

06 December 2019

 

Aberdeen Standard European Logistics Income PLC

LEI: 213800I9IYIKKNRT3G50

Net Asset Value as at 30 September 2019

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

Highlights

·    NAV per Ordinary share of €1.07 as at 30 September 2019 (30 June 2019 - €1.07) (GBP -94.95p, 30 June 2019 GBP - 95.85p). Exchange rate £1:€1.13 (30 June 2019: £1:€1.12).

·    Portfolio capital value has increased by 1.2% since 30 June 2019 (on a like for like basis including capital expenditure). The Company's high quality and well-diversified European logistics portfolio is now valued at €300.7 million.

·    The Company raised gross proceeds of £46.4 million (€50.9 million after costs) through a placing, open offer and offer for subscription of Ordinary shares.

·    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 manner through the issue of up to 200 million Ordinary Shares and/or C Shares in aggregate.

·    The second interim distribution of 1.27 pence per Ordinary Share in respect of the year ending 31 December 2019 was paid on 7 October 2019.

Acquisitions and debt financing

During the quarter 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 a favourable all-in interest rate of 0.94%. The warehouse has an attractive income profile and is fully leased to third-party logistics operator JCL Logistics Benelux B.V., a wholly owned subsidiary of JCL Switzerland AG. The lease has a remaining term of 12.5 years and is fully CPI indexed.

Since the quarter end, the Company completed the acquisition of a newly built fully income producing logistics warehouse in Warsaw, Poland, for a purchase price of €27.5 million providing a net initial yield, with payments in euros, of 5.64% and representing the deployment of over half of the amount raised under the fundraising that took place in July. This consists of two buildings of which one is a cross-dock facility used by DHL who have selected this area as it is closely located to the city centre and ideal for city distribution.

The Company is also close to signing a sale and purchase agreement on an asset located between The Hague and Rotterdam, one of the most urbanised areas in the Netherlands, and has also signed a letter of intent over an asset just outside Madrid, Spain. It is expected that, on completion of the purchase of these prime assets, the Company will have fully invested the equity proceeds raised earlier in the year with structural gearing still at or around the indicated 35% level.

Investment Manager Commentary

With the signing of the contract to purchase our latest asset in Warsaw we now have a portfolio of twelve warehouses, with two more in the pipeline, all income producing and in excellent locations with a strong and diversified tenant base. The logistics sector remains a compelling asset class thanks to strong market fundamentals, especially in the most liquid part of the market where we have positioned the portfolio.

Strong demand from investors continues and the lack of modern facilities for logistics companies should support values and capital growth, especially with greater planning restrictions over new developments, as is the case in the Netherlands.

Completion of the latest property purchases that we are working on will bring the portfolio to fourteen assets in total spread across five countries. Madrid continues to be an important and attractive hub whilst the Netherlands, where we will have exposure for almost 50% of the portfolio, is seen as the gateway to the Western European market thanks to its strategic location in Europe with the port of Rotterdam, the largest port in Europe, and Schiphol airport playing an important role in serving cross-border and domestic supply chains.

The quality of our real estate and its locations combined with the longer indexed leases and size of the investments gives us confidence that we have bought into the most liquid part of the logistics market which should enable us to generate a durable income stream for our shareholders and value accretion.

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 June 2019 to 30 September 2019. The unaudited net asset value has been prepared under International Financial Reporting Standards ("IFRS"), except for the recognition of the 2^nd interim distribution paid on 7 October 2019, ex-dividend date 19 September 2019.

Aberdeen Standard European Logistics Income	Per  Share (€cents)	Attributable Assets (€m)	Comment
Net assets as at 30 June 2019	107.1	200.9
Unrealised increase in valuation of property portfolio	1.4	3.3	Portfolio of 11 assets, capital value increased 1.2% including capital expenditure on a like for like basis excluding the one acquisition at 's Heerenberg in the quarter. Capital expenditure predominantly related to acquisition costs of 's Heerenberg.
Capital expenditure during the period	(0.6)	(1.4)
Income earned for the period	1.8	4.0	Income from the property portfolio and associated running costs
Expenses for the period	(0.7)	(2.0)
FX hedge mark to market revaluation	0.0	0.1	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  on: 6 September 2019	(1.4)	(3.4)	Second interim dividend of 1.27p per Ordinary Share
Share Issue	-	50.9	Net proceeds of Placing and Open Offer in July 2019
Foreign currency loss	(0.3)	(0.7)	Predominantly related to the FX loss on the share issue in the quarter
Net assets as at 30 September 2019	107.3	251.7

The EPRA NAV per share is 107.5 Euro cents, which excludes deferred tax and fair value of the FX derivative.

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

	€m	% of net assets
Total Property Portfolio	300.7	119.4%
Adjustment for lease incentives	(1.3)	(0.5%)
Fair value of Property Portfolio	299.4	118.9%
Cash	57.4	22.8%
Other Assets	7.8	3.1%
Total Assets	364.6	144.8%
Bank Loans	(100.9)	(40.1%)
Current liabilities	(11.2)	(4.4%)
Deferred tax liability	(0.8)	(0.3%)
Total Net Assets	251.7	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 September 2019 is based on 234,500,001 shares of 1 pence each, being the total number of shares in issue at that time.

Tony Roper, Chairman, commented:

"Our Investment Manager has built a portfolio of quality properties with predominantly long indexed leases which supports a durable and growing income stream for shareholders. With the next acquisitions in the pipeline aimed to complete in late December, the Company will own fourteen warehouses diversified by geography and tenant base in well located and established distribution hubs. All of these lie in close proximity to cities with excellent transport links making them attractive to prospective tenants.

Demand for such mid-size logistics properties and the continued low cost of financing continues to help to underpin our policy and provide shareholders with a level of comfort of attractive income profiles with fully CPI indexed lease terms. Asset selection, price and tenant quality are key considerations on which our Investment Manager has focused as the portfolio has been built out.

As supply chain management gains importance due to growing e-commerce and ongoing urbanisation, prime logistics space will become scarce. Beyond this, asset management possibilities can add value and we expect solar roof panels in many locations to add to incremental revenues over the coming months as licences are obtained and development work completed. Where the building footprint allows, the Investment Manager will liaise closely with tenants as they seek to support the expansion plans of their businesses and as further space becomes necessary.

The Investment Manager is continuing to source new investment opportunities to add to the existing portfolio. We are confident of securing further attractive investments to provide shareholders with a more liquid and diversified investment opportunity in this flourishing sector."

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 and its property portfolio may also be found on the Company's website which can be found at: http://www.eurologisticsincome.co.uk

For further information please contact:

Luke Mason / Gary Jones

Aberdeen Asset Management PLC

0207 463 6000

The above information is unaudited.

 

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