Aberdeen Standard Eur Lgstc Inc PLC Company Update (1047L)
December 20 2018 - 3:17AM
UK Regulatory
TIDMASLI
RNS Number : 1047L
Aberdeen Standard Eur Lgstc Inc PLC
20 December 2018
Aberdeen Standard European Logistics Income PLC (LSE: ASLI) (the
"Company")
LEI: 213800I9IYIKKNRT3G50
Company Update
Introduction
As announced on 19 November 2018, with the exchange of contracts
on the assets in Zeewolde and Waddinxveen in the Netherlands, the
Company has invested, or committed to invest, the whole of the net
equity proceeds raised at the time of the Company's initial public
offering in December 2017. The most recent addition to the
portfolio (a warehouse in Meung-Sur-Loire in France) was announced
on 23 November 2018 and the Company is in the final stages of due
diligence to acquire an asset in Poland. The addition of the Polish
asset would see the portfolio increase to ten freehold assets, five
of which are brand new high-quality warehouses, located across five
countries with a total purchase value of over EUR265 million, an
average net initial yield of 5.1% and a weighted average unexpired
lease term (WAULT) in excess of ten years. As previously
highlighted, the pipeline of investment opportunities for the
Company remains strong.
With the Manager at an advanced stage of due diligence on a
number of potential acquisitions, the Company is close to
concluding the process of putting in place debt facilities, secured
on certain properties within the portfolio, to provide financing
for an additional asset and to fund stage payments that are
required for forward funded projects expected to complete in
mid-2019 in Spain and the Netherlands. The Board and the Manager
are convinced of the high quality of the assets purchased to date,
and are confident that the durable income streams that these
properties provide under their long index-linked leases will
benefit the Company and its shareholders. Europe maintains a clear
advantage over UK logistics assets in terms of yields and low
financing costs, with the strong underlying fundamentals expected
to drive further growth in logistics demand, ultimately supporting
rental and capital growth.
Shareholder update
The Board has closely monitored the development of the European
logistics market over the past twelve months and, as noted in the
Company's announcement of 19 November, is conscious of the very
strong market demand for logistics assets across much of developed
Europe. This has resulted in a material degree of yield
compression. At the same time, ongoing demand for assets of the
high quality seen in the Company's portfolio is expected to result
in a marked uplift in their capital value over time, adding to the
total return. The breadth and depth of the Manager's real estate
operations across Europe has enabled it to build the high quality
portfolio of assets now held by the Company and which the Board has
been closely involved with through regular reporting and meetings.
During the Manager's recent series of investor updates with leading
shareholders, discussion focused on the Company's total return
characteristics and distribution targets, and, in particular,
whether the current level of gearing and/or target return should be
reviewed given the market conditions referred to above. Following
shareholder feedback, the Board has determined that it would be in
the best interests of shareholders as a whole to maintain gearing
at or around 35 per cent. of gross assets, rather than implementing
a higher gearing strategy at this stage of the market cycle in an
effort to counteract the effects of falling yields. The Board will
keep the level of borrowings under review and the aggregate
borrowings will always be subject to the absolute maximum set at
the time of the Company's launch, calculated at the time of
drawdown for a property purchase, of 50 per cent. of Gross
Assets.
As a corollary, the Board has concluded that the Company's
current distribution target should be amended. This will ensure
that the Company can achieve a sustainable and fully covered
dividend over the long term and maintain sufficient cash reserves,
without compromising on the very high quality of the Company's
portfolio as and when further logistics assets are acquired. The
Company will therefore seek to target for an investor at launch an
annual yield of 5.0 per cent. per Ordinary Share and a total
shareholder return of 7.5 per cent. per annum (each in Euro terms).
For the avoidance of doubt, the Board still expects to pay, in
aggregate, distributions of no less than 3.0 pence per Ordinary
Share in respect of the period from initial admission to 31
December 2018.
Future growth
The Board and the Manager remain confident that the market for
European logistics assets will continue to offer many attractive
investment opportunities in the future, and the intention remains
to seek to grow the Company through further equity issuance in the
coming months, alongside the deployment of the associated debt in
accordance with the Company's prevailing gearing guidelines. The
European logistics market is sizeable and growing, with the sector
benefiting from rapid take-up of facilities and long
inflation-linked leases to quality tenants.
Management fee
As the Company seeks to grow into the fast-moving sector of
European real estate, the Board and the Manager have agreed that
the annual management fee applied to the first EUR500 million of
assets will be reduced from 0.95 per cent. to 0.75 per cent. of the
net asset value as calculated under the management agreement.
For further information:
Aberdeen Fund Managers Limited
0207 463 6000
William Hemmings
Gary Jones
Canaccord Genuity Limited
0207 523 8000
David Yovichic
Will Barnett
Neil Brierley
Dominic Waters
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 or visit www.rns.com.
END
UPDKBLBLVLFFFBE
(END) Dow Jones Newswires
December 20, 2018 04:17 ET (09:17 GMT)
Abrdn European Logistics... (LSE:ASLI)
Historical Stock Chart
From Apr 2024 to May 2024
Abrdn European Logistics... (LSE:ASLI)
Historical Stock Chart
From May 2023 to May 2024