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3 Jun 2019 07:00
Aberdeen Standard European Logistics Income PLC
LEI: 213800I9IYIKKNRT3G50
Net Asset Value as at 31 March 2019
31 May 2019: Aberdeen Standard European Logistics Income PLC (LSE: ASLI) (the "Company" or "ASLI") announces its unaudited quarterly Net Asset Value ("NAV") as at 31 March 2019.
Highlights
· NAV per share of €1.06 as at 31 March 2019 (31 December 2018 - €1.08) (GBP - 91.13p, 31 December 2018 GBP - 96.7p). Exchange rate £1:€1.16 (31 December 2018: £1:€1.11)
· Well diversified property portfolio with ten warehouses in five different countries and 26 tenants, one further asset in advanced due diligence
· The Company's high quality, unique and well diversified European logistics portfolio is valued at €238.4 million as at 31 March 2019. Like-for-like portfolio capital value increase of 0.7% (after acquisition costs) compared to 31 December 2018 year end valuation.
· From purchase, property values have increased in aggregate by 1.4% to the end of March 2019, based on quarter end valuations and purchase prices excluding acquisition costs
· The third interim dividend of 1.3 pence per Ordinary share was paid on 22 March 2019 in respect of the period from 15 December 2017 (the date of the Company's initial admission to the London Stock Exchange) to 31 December 2018
Completion of Acquisitions
· During the quarter the Company completed three acquisitions:
Ø A freehold logistics warehouse near Krakow, Poland for a net value of €24.5 million, providing a net initial yield of 6.8%. This property is situated in an established logistics area benefiting from proximity to Krakow, its international airport and also from easy motorway access to Silesia, Germany and the Czech Republic. The warehouse has an attractive income profile and is fully leased to nine tenants, all with Euro denominated CPI indexed leases
Ø A new development in Erlensee, Germany for a net value of €32.3 million, providing a net initial yield of 5.2%. This acquisition was completed in February 2019 and is situated in the modern logistics hub of Erlensee Langendiebach, not far from Frankfurt in the prosperous Rhine/Main metropolitan region
Ø A freehold logistics warehouse located in Meung-sur-Loire, France, purchased for €23.5 million, providing a net initial yield of 4.7%. The property is fully let on a fully indexed lease to Office Depot France until 2026.
Since the quarter end, the Company has completed the acquisition of the previously announced newly built logistics warehouse in Leon, Spain, 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.
The Company is also in advanced due diligence on a further warehouse in the Netherlands.
Successful Debt Financing
· During the quarter, the Company arranged €63.2 million of competitive long term financing predominantly secured at local level over the Company's assets in France and Germany:
Ø €33.0 million was secured against the Company's two French assets with BayernLB. The cross-collateralised loan facility has been drawn for a 7 year term at an attractive all-in fixed interest rate of 1.56%, highlighting the quality and durable income streams provided by these assets
Ø €30.2 million has also been secured against the Company's two German assets arranged with DZ HYP AG. The loan facility secured over the Company's Erlensee property has been arranged for a total value of €17.8 million and fixed for a 10 year term at an all-in interest rate of 1.62% per annum. The Flörsheim debt facility is for a total value of €12.4 million and fixed for a seven year term at an all-in interest rate of 1.539% per annum
Ø Gross gearing as at 31 March 2019 was 23%
· The Company is also in advanced negotiations on a loan facility of €33 million secured against a portfolio of its Dutch assets on attractive terms with an expected drawdown of the facility in early June 2019
· Closing of the deal currently in due diligence will require a small loan facility for which a term-sheet has been signed. This would bring the Loan-To-Value ratio (LTV) to at or around the target LTV of 35%
· Facility arranged with Societe Generale, undrawn at 31 March 2019, for an amount of £6 million for efficient cash management purposes
Continued strong demand for the Company's shares. As at 30 May 2019 the share price was GBP 98.0p - a premium to the 31 March 2019 sterling NAV of 4.1%.
Investment Manager Commentary
All proceeds from the Initial Public Offering ("IPO") were invested in line with the timeframe envisioned at IPO and first financings were put in place to fund the three deals which were closed in Q1 2019. Including the acquisition that is in advanced due diligence, the Company will have 11 warehouses with modern specifications spread across 5 different countries, all located in established locations highly sought after by both tenants and investors. As our forward funding projects in Oss and Zeewolde near completion, we believe that this attractive portfolio, with long indexed leases and strong covenant tenants, will generate a solid and sustainable income stream. Asset level gearing is expected to continue to be at, or around, the target LTV of 35% assuming the successful closing of the transaction currently in due diligence.
The logistics sector remains popular amongst investors and its popularity is likely to continue, reflecting the growth in e-commerce and the globalisation trend. Strong occupier demand in combination with a lack of suitable product within the European logistics market gives us confidence that there is further scope for capital and income growth in the years ahead. The flow of logistics opportunities that fit our investment criteria remains strong. We are currently reviewing potential acquisitions that amount to approximately €250 million in aggregate value. Whilst not all of these will survive our stringent investment process, the breadth of opportunity demonstrates that the logistics market remains sound.
Breakdown of NAV movement
Set out below is a breakdown of the change to the unaudited net asset value per share calculated under International Financial Reporting Standards ("IFRS") over the period from 1 January 2019 to 31 March 2019.
Aberdeen Standard European Logistics Income | Per Share (€cents) | Attributable Assets (€m) | Comment |
Net assets as at 31 December 2018 | 107.8 | 202.1 | |
Unrealised increase in valuation of property portfolio | 0.9 | 1.8 | Portfolio of 9 assets, capital value increase of 1.2% compared to prior quarter value or purchase price for the three assets acquired in the period. Capital expenditure representing the costs of completing these acquisitions. |
Capital expenditure during the period | (1.9) | (3.6) | |
Income earned for the period | 1.2 | 2.3 | Income from the increased property portfolio and associated running costs. |
Expenses for the period | (0.6) | (1.2) | |
Deferred tax liability | (0.4) | (0.8) | Deferred tax liability on the difference between book cost and fair value of Krakow asset, which was acquired via an SPV acquisition in the period. |
FX hedge mark to market revaluation | 0.2 | 0.4 | Dividend hedge entered into in the quarter to fix the EUR:GBP conversion rate for the next 4 quarterly dividends. |
Dividend paid on 22 March 2019 | (1.5) | (2.9) | Third interim dividend of 1.3p per Ordinary Share. |
Foreign currency gain / (loss) | 0.1 | 0.2 | |
Net assets as at 31 March 2019 | 105.8 | 198.3 |
The EPRA NAV per share is €1.06, which excludes the deferred tax liability and fair value of FX contracts.
Net Asset Value analysis as at 31 March 2019 (unaudited)
€m | % of net assets | |
Total Property Portfolio | 238.4 | 120.3% |
Adjustment for lease incentives | (0.3) | (0.2%) |
Fair value of Property Portfolio | 238.1 | 120.1% |
Cash * | 22.4 | 11.3% |
Other Assets | 12.9 | 6.5% |
Total Assets | 273.4 | 137.9% |
Bank Loans | (62.6) | (31.6%) |
Current liabilities | (11.7) | (6%) |
Deferred tax liability | (0.8) | (0.3%) |
Total Net Assets | 198.3 | 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 31 March 2019 is based on 187,500,001 shares of 1p each, being the total number of shares in issue at that time.
Pascal Duval, Chairman, commented:
"Quality of location and building are key areas of focus together with lease length and the covenant strength of our tenants. Our portfolio manager and the wider team has built a quality portfolio of ten freehold assets spread across five countries, with six of these assets being new. Leases are indexed and our manager believes that the undersupplied logistics market in Europe underpins rental growth in the future. Healthy market fundamentals, low interest rates and strong investor demand provides confidence for the future of ASLI and its potential for growth from here.
Despite strong competition in certain regions we remain convinced of the European logistics story. Strong fundamentals give us reason to believe that the Company can continue to grow and further diversify what is already a very attractive portfolio. The pipeline of potential logistics assets that fit the investment criteria remains strong and the Board together with the Investment Manager continues to believe that the Company will grow through further issuance over time. The Board will seek to update shareholders regarding further fundraising in the near future".
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 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.