TIDMASLI
RNS Number : 5068A
Aberdeen Standard Eur Lgstc Inc PLC
30 September 2020
ABERDEEN STANDARD EUROPEAN LOGISTICS INCOME PLC (the
"Company")
Legal Entity Identifier (LEI): 213800I9IYIKKNRT3G50
HALF YEARLY REPORT FOR THE PERIODED 30 JUNE 2020
The Directors of Aberdeen Standard European Logistics Income PLC
today announce the half yearly results for the period from 1
January 2020 to 30 June 2020.
HIGHLIGHTS AND FINANCIAL CALAR
FINANCIAL HIGHLIGHTS
30 June 31 December
2020 2019
Total assets (EUR'000) 454,933 382,981
Equity shareholders' funds (EUR'000) 270,266 260,277
Share price - Ordinary share (pence) 105.00p 90.40p
Net asset value per Ordinary share (EUR) 1.13 1.11
Share price premium/(discount) to sterling
net asset value (%)1 1.9 (4.0)
1 Premium / (discount) to net asset value is calculated using
the share price (GBP) and net asset value (GBP).
Performance (total return)
Six months ended Year ended Since inception
30 June 2020 31 December 2019 to 30 June 2020
NAV total return (EUR) per Ordinary
Share (%)2 4.20 8.63 9.68
Share price total return (%)2 19.68 (6.99) 15.41
2 Considered to be an Alternative Performance Measure (see
Glossary on page 26 of the published Half Yearly Report for more
information).
Financial Calendar
30 September 2020 Announcement of unaudited half yearly results
25 September 2020 Payment of second interim distribution for
year ending 31 December 2020
October 2020 Half Yearly Report posted to shareholders
30 December 2020 Payment of third interim distribution for
year ending 31 December 2020
26 March 2021 Payment of fourth interim distribution for
year ending 31 December 2020
April 2021 Announcement of Annual Financial Report for
the year ending 31 December 2020
May 2021 Annual Report available on line (and posted
to those registered shareholders who have
requested hard copies)
June 2021 Annual General Meeting in London
June 2021 Payment of first interim distribution for
the year ending 31 December 2021
INTERIM BOARD REPORT - CHAIRMAN'S STATEMENT
Overview
I am pleased to be presenting the Company's half yearly report
for the six months ended 30 June 2020.
As I write this report, despite the easing of the stringent
lockdowns that we have seen across Europe and the World, the
COVID-19 pandemic still looks set to have far-reaching consequences
for many people and businesses globally. I would reiterate though
that many of our tenants are involved in key logistic supply chains
whether that be in food supply, pharmaceuticals or the ever
increasing direct to home delivery services. Despite strong rental
income collection to date, we cannot be complacent and our
Investment Manager remains in regular communication with our
tenants to ensure that they are available to address any concerns
that the tenants may have and are supportive where possible.
The Company completed the acquisition of its latest urban
located logistics warehouse in Den Hoorn, the Netherlands, in
January for a net value of EUR49.9 million. This newly built
warehouse is ideally located between the cities of the Hague and
Rotterdam with LED lighting and solar roof panels adding
sustainable credentials to the investment. This purchase took the
portfolio to a total of fourteen properties valued at EUR404.9
million spread across five countries with 33 tenants resulting in
the Company being fully invested.
The Investment Manager has built a portfolio of properties with
predominantly long indexed leases which supports a durable and
growing income stream for our shareholders. The Company's assets,
diversified by geography and tenant base, are predominantly well
located at established distribution hubs within close proximity to
cities with excellent transport links providing attractive
facilities for current and potential tenants.
Details on the Company's portfolio are provided in the
Investment Manager's Report.
Results
The unaudited Net Asset Value ("NAV") per Share as at 30 June
2020 was EUR1.13 (GBp - 103.00p), compared with the NAV per Share
of EUR1.11 (GBp - 94.21p) at the end of 2019, reflecting, with the
interim dividends declared, a NAV total return of 4.2% for the six
month period under review, in euro terms.
The closing Ordinary share price at 30 June 2020 was 105.00p (31
December 2019 - 90.40p), representing a premium to the NAV per
share of 1.9%. At the date of this report the closing price was
105.0p.
Rent collection
During the Q2 period, the Company successfully concluded
negotiations with certain tenants negatively impacted by the
COVID-19 pandemic and following the conclusion of the quarter, the
Company confirmed that 85% of Q2 rental income due was collected,
slightly in excess of the forecast collection percentage of
82%.
As previously reported, for the remaining outstanding rental
income, the Investment Manager has agreed short-term rent deferrals
and a small number of rent-free periods, in exchange for material
lease extensions.
It is pleasing to report that no new requests for support have
been received from tenants and rent collection remains strong.
We have now seen total rent collection of 100% in Q1, 85% in Q2
and 96% in Q3 as at mid-September. All rents due under the terms of
deferral agreements have been paid on time. With the majority of
the deferred rents to be received in H2 2020 or early 2021, 97% of
full year 2020 rental income is expected to be received by year
end.
Dividend
On 26 May 2020 the Directors declared a first interim
distribution of 1.41 euro cents (equivalent to 1.24p) per Ordinary
share in respect of the year ending 31 December 2020. This was paid
in sterling on 26 June 2020.
On 25 August 2020 a second interim distribution of 1.41 euro
cents (equivalent to 1.24p per Ordinary share was declared, paid in
sterling on 25 September 2020 with a record date of 4 September
2020 (ex-dividend date of 3 September 2020).
It is very encouraging to note both the rent collection
statistics to date and the agreements that our Investment Manager
has negotiated with some of our tenants with respect to rent
deferrals and lease extensions in return for rent free periods. The
Board is of course rightly mindful of any further impact to tenants
from the COVID-19 virus but it remains the intention to continue to
pay quarterly interim dividends in line with our policy.
Dividends continue to be declared in respect of the quarters
ending on the following dates: 31 March, 30 June, 30 September and
31 December in each year.
Share issuance
The Investment Manager continues to review a steady pipeline of
possible acquisitions for the Company for which additional capital
will be required and for which a proposed new banking agreement,
referred to below, may be used for temporary acquisition
financing.
Pleasingly, on 23 June 2020 the Board announced the issue of
five million new Ordinary shares at a price of 105 pence per share
in response to specific investor demand. On 30 July 2020 the
Company issued a further five million new Ordinary shares at a
price of 104 pence. In aggregate these issues raised an additional
GBP10.45 million (equivalent to approximately EUR11.5 million)
which may be used for further asset purchases. Following the
issues, shareholder authority remains to issue an additional
18,450,000 new Ordinary shares on a non-pre-emptive basis to
satisfy future demand.
Such shares will only be issued at a premium to the NAV per
Ordinary share at the time of issue.
Following the issue of these new Ordinary shares, the total
number of shares in issue and therefore of voting rights in the
Company is now 244,500,001 shares.
Revolving Credit Facility
The Company is in advanced discussions with Investec Bank
regarding the provision of a EUR40 million Revolving Credit
Facility ("RCF"). The RCF will increase the Company's flexibility
to acquire new assets prior to raising fresh equity, and will
reduce the impact of cash drag on the Company's investment returns.
Further details will be announced by the Company when the agreement
has been signed.
Financing
The Investment Manager's treasury team has sourced fixed term
debt from banks which is secured on certain assets or groups of
assets within the portfolio.
These non-recourse loans range in maturities between six and ten
years with interest rates ranging between 0.94% and 1.62% per
annum.
As part of the acquisition of the property in Den Hoorn, the
Company finalised and drew down long term financing secured on the
properties at Den Hoorn and Zeewolde in the Netherlands. The
secured facility was arranged with Berlin HYP AG for a total value
of EUR35.7 million at an all-in interest rate of 1.25% and fixed
for an eight year term, bringing asset level gearing to 33.5%,
slightly below the Company's target level of 35%.
The current average interest rate on the total fixed term debt
arrangements of EUR144.6 million is 1.4%. The Board continues to
keep the level of borrowings under review, calculated at the time
of drawdown for a property purchase. The actual level of gearing
may fluctuate over the Company's life as and when new assets are
acquired or whilst short term asset management initiatives are
being undertaken. Banking covenants are reviewed by the Investment
Manager and the Board on a regular basis.
ESG and Asset Management
ESG (environmental, social and governance) is embedded in our
business processes, not only for the Company and Investment Manager
but also with our investors and the tenants in our portfolio. The
Investment Manager has continued to work on a strategy with an
action plan for each warehouse with an ambition to reduce carbon
emissions. A focal point for the Company has been to implement
Green Lease agreements with our tenants.
This creates a commitment for the landlord and tenants to
maintain and use the buildings in a green way. A really important
component is the obligation for the tenant to share volumetric data
on energy use, waste disposal and water consumption so that we can
see where potential improvements to the building could have most
impact.
Information collected, through the use of smart meters, will
help us understand how much carbon is produced and where reductions
can be made.
The Investment Manager also continues to follow up on its tenant
satisfaction survey to understand crucially our tenants views on
properties and services and to gauge where there may be room for
improvements with a special focus on ESG. The Company learns from
such communications and this helps create strong long-term
relationships.
The addition of solar panels for green energy and other
initiatives should enhance our scoring for the GRESB Survey whilst
both the Company and its tenants seek to concentrate efforts on
sustainability issues.
Asset management will add and maintain value across our
portfolio. Our Investment Manager continues to engage with our
tenants where additional warehousing space will be required.
Several of our assets provide the option for extensions for tenants
and we will support these initiatives where we are able to add
value for tenants and shareholders.
Now more than ever the Investment Manager's people on the ground
act as an important conduit to our tenants, seeking to maintain
clear communication links to understand how they are operating, any
ongoing concerns and their requirements for the future.
EPRA Index Inclusion
During the review period, it was pleasing to advise shareholders
that effective from 22 June 2020 the Company was included in the
FTSE EPRA/NAREIT Global Real Estate Index Series. This can only be
beneficial for the Company, helping to increase the liquidity of
the Ordinary shares by further broadening the Company's investor
base.
Outlook
The Board and the Investment Manager continue to observe strong
structural tailwinds benefitting the European logistics sector and
believe these have been further reinforced following the
experiences of the COVID-19 pandemic.
Notwithstanding the unprecedented economic environment we are
now operating within, the Board and Investment Manager continue to
believe that logistics will remain one of the most favoured sectors
for real estate investors in the coming years. The logistics
industry has and is experiencing unprecedented disruption as a
result of systemic changes to the way global economies are
functioning and these challenges are manifesting themselves in
different ways across different sectors. So far, logistics assets
have benefited from additional occupier demand arising from
necessary supply chain restructuring.
New technology is creating challenges for supply chains as
clients demand frequency and more complexity whilst the nature of
e-commerce, where Europe has lagged the UK, has increasingly
required operators to adapt faster to future shifts in consumption,
particularly so since the European lockdowns. Our Investment
Manager has built a portfolio of properties, predominantly around
30,000 square metres in size located close to cities, airports and
major motorway routes. These urban fringe facilities while
structured for current tenants tend to be in the more liquid part
of the sector where reconfiguration is easier and tenant demand
strongest helping to provide facilities with optionality at the
maturity of a lease.
Leasing 'tension' has been robust and land values under pressure
from competing uses with income growth prospects potentially
stronger than for 'ultra big-boxes' where risk is higher at
maturity of the lease as the number of potential occupiers are
limited.
The European logistics sector continues to grow with the
increasing demand from market participants for newer, quality
warehousing driven by their demand for increased space, both for
re-shoring of operations and to address the rise in e-commerce
demands. The sustainable income and inflation protection that we
see from our longer term, predominantly indexed, leases should give
shareholders assurance of the income and growth strategy that the
Company is pursuing. Our Investment Manager continues to see
opportunities across a variety of European countries and the
intention remains to grow the Company through regular equity raises
as and when market conditions allow.
Details on the Company and its portfolio, together with up to
date information including the latest share price can be found at:
eurologisticsincome.co.uk
Tony Roper
Chairman
29 September 2020
INTERIM BOARD REPORT - INVESTMENT MANAGER'S REVIEW
Overview
The first half of 2020 witnessed unprecedented challenges with
the recognition and spread of COVID-19 and its disruptive impact
felt on supply chains and economies worldwide. Despite this, the
Company ("ASELI") has performed strongly, delivering NAV growth and
an impressive shareholder total return.
As a sector, European logistics has outperformed most other
European real estate sectors, benefitting from the shift to working
from home and the social distancing rules. Strong growth in
e-commerce and the restructuring of supply chains are key drivers
supporting the demand for logistics warehouse space, which is
increasingly becoming a favoured asset class among investors. With
a portfolio of fourteen high quality assets, spread across five
European countries, ASELI is in a strong position going
forward.
Over the first half of 2020, the Investment Manager has focused
on protecting future cash flows through closely liaising and where
necessary, supporting our tenants. While a large proportion of our
tenants have experienced steady or increased trading volumes, a
number of our tenants required some form of support through the
early stages of the COVID-19 pandemic. These tenants were supported
through a small number of rent deferrals or rent free periods in
return for material lease extensions. The Investment Manager is
pleased with the results of the rent collections for the first half
of the year and also for Q3 2020 so far. This, in turn, has given
the Board the confidence to declare interim dividends in line with
guidance at the start of the year. Notably, this, together with the
demand for good quality European logistics exposure has resulted in
the share price consistently trading at a small premium to the NAV
since June.
Our ambition remains to grow the portfolio and create further
country and tenant diversification whilst continuing to improve the
overall green credentials of the portfolio.
A strong logistics sector
The European economy is working its way through a sudden and
unexpected recession due to COVID-19. The depth of this downturn is
very hard to quantify, but our best estimate is that GDP will have
contracted by approximately 20% over the first half of 2020.
The recovery over the second half of the year and beyond is
likely to be slower than the initial shock. Euro member states that
have been able to control the virus more rapidly, such as Germany
and the Netherlands where the portfolio has a high allocation of
assets, should experience shallower recessions and quicker
recoveries; while those with larger outbreaks, such as Italy and
Spain, seem to be facing deeper recessions and slower
recoveries.
Long term drivers for the logistics story remain strong, with
the recent pandemic accentuating and accelerating the positive
trends already witnessed. The immediate impact was a disruption of
the global supply chain, not only for more internationally exposed
companies but also for businesses operating in the discretionary
retail, automotive industries and restaurant sub-sectors.
Businesses related to groceries, pharmaceuticals and packaging
have shown more stable or growing sales, particularly where
e-commerce spending has surged as more people have become
accustomed, often through necessity, to buying more online.
Over the medium and long-term, we expect the sector to benefit
from de-globalisation and the moves to bring production closer to
home, with inventory building, both to make the supply chain more
resilient to shocks and to address further expected growth in
e-commerce. This will further support demand for logistics space in
Europe going forwards.
In general the European logistics market remains undersupplied
with average vacancy rates below 4%. There is a lack of modern
warehousing stock with limited speculative developments taking
place.
Prudent asset selection
With an income driven strategy, our key focus has been on
generating consistent durable income streams.
This means the Company should never comprise on quality and
liquidity although at the same time realising that we are not
always able to buy the best asset in the best location with the
longest lease. 'Absolute Core' is the area of the market where
competition is strongest and sometimes dominated by the application
of indiscriminate capital. We believe that we can be smarter by
using the deep market knowledge and sourcing skills of our local
European-based transaction managers. Out of the fourteen warehouses
currently in the portfolio, nine were sourced on an off-market
basis where we negotiated directly with the owner or developer
resulting in limited direct competition from other buyers in a
bidding round. Our network with developers is strong, illustrated
by the eight brand-new buildings we have added to the portfolio
since inception structured as either a forward funding or forward
commitment deal. A good example of our strategy was the largest
warehouse the Company owns which we bought in January 2020 in Den
Hoorn, the Netherlands, for a total net purchase price of EUR49.9
million. This new building is centrally located within the Randstad
region, the most densely populated area in the Netherlands, close
to the cities of the Hague and Rotterdam with access to the A4
connecting Den Hoorn with the port of Rotterdam and Schiphol
airport.
This urban profile is ideal for last-mile deliveries making this
an attractive asset. The building is currently leased out to a
strong covenant transport company with a long history and benefits
from a fully indexed ten year lease.
Given its location and liquid lot size of 43,280 square metres,
with the flexibility to split into two parts if required, the
warehouse has a good second life option making it well positioned
to generate a durable income stream. We are working on further
value creation by adding solar panels to the roof and at the same
time seeking to minimise the carbon footprint of the building.
For this purchase the Company used long term debt financing
secured on this warehouse in a cross- collateralised portfolio
financing with the warehouse owned in Zeewolde. This secured loan
facility has been arranged with Berlin Hyp for a total value of
EUR35.7 million and is fixed for an eight year term at an
attractive all-in interest rate of 1.25%. The other warehouses in
the portfolio have comparable characteristics with locations
alongside main transport corridors and modern specifications. By
the end of June 2020, the portfolio was valued at EUR404.9 million,
unchanged from 30 March 2020, with investments diversified across
five countries.
The Netherlands, considered one of the most attractive logistics
markets in Europe by the Investment Manager, has the largest
allocation in the portfolio with 47% by portfolio value, followed
by France (18%), Germany (15%), Poland (13%) and Spain (7%). We see
ourselves as 'stock-pickers' trying to find the best possible deal
at the right price. The country allocation is partly a result of
this bottom-up approach although the overweight position to the
Netherlands is deliberate and supported by our macro view. The
Netherlands plays a crucial role for logistics in Europe given its
strategic geographical position as gateway to the European market
with the port of Rotterdam being one of the largest ports in the
world. In addition, land for new developments in this densely
populated country is scarce, further fuelled by the current debate
on the impact of big-box logistics on the landscape and some very
strict EU regulations related to nitrogen emissions. We consider
that this puts ASELI in a good position with the six Dutch assets
already held in the portfolio.
Liquidity of this high quality portfolio is also reflected in
the property valuations which have held up well reflecting the
strong position of logistics as an asset class.
The portfolio's average lease length is 8.4 years including
break options and 9.2 years excluding break options, all with
indexed leases creating an effective inflation hedge on future
cashflows.
Property portfolio
WAULT WAULT excluding
incl breaks in %
breaks in yrs of Fund
Country Location Built yrs
France Avignon 2018 7.1 9.9 11.7
France Meung sur Loire 2004 6.3 6.3 6.2
Germany Erlensee 2018 4.7 8.2 9.3
Germany Flörsheim 2015 4.6 6.7 5.9
Netherlands Den Hoorn 2020 9.5 9.5 12.8
Netherlands Ede 1999/ 2005 7.4 7.4 7.0
Netherlands Oss 2019 14.0 14.0 4.0
Netherlands s Heerenberg 2009/ 2011 11.5 11.5 6.6
1983/ 1994/
Netherlands Waddinxveen 2002/ 2018 13.4 13.4 9.1
Netherlands Zeewolde 2019 14.0 14.0 7.5
Poland Krakow 2018 3.4 4.3 6.4
Poland Warsaw 2019 7.1 7.1 6.7
Spain Leon 2019 8.7 8.7 4.3
Spain Madrid 1999 6.5 9.5 2.5
TOTAL 8.4 9.2 100
Loan portfolio 30 June 2020
Existing
loan End date Duration Interest
Property Bank EUR million Loan Years (incl margin)
Country
Germany Erlensee DZ Hyp 17.8 February 2029 10.0 1.62%
Germany Flörsheim DZ Hyp 12.4 February 2026 7.0 1.54%
Avignon + Meung sur
France Loire BayernLB 33.0 February 2026 7.0 1.57%
Netherlands Ede + Oss + Waddinxveen Berlin Hyp 37.7 June 2025 6.0 1.18%
Netherlands s Heerenberg Berlin Hyp 8.0 June 2025 6.0 0.94%
Netherlands Den Hoorn + Zeewolde Berlin Hyp 35.7 January 2028 8.0 1.25%
Total 144.6 7.3 1.36%
Healthy rent collection supports dividend
The Investment Manager is pleased with the rent collection over
the first half of the year. The COVID-19 pandemic has impacted
economies worldwide with disruptive effects on supply chains and
significant negative effects for retail and hospitality oriented
companies. Conversely, many companies focused on food distribution,
pharmaceuticals and home deliveries have experienced materially
increased levels of trading demand. While the majority of the
Company's tenants continued to see strong trading demand following
the onset of the pandemic, as expected, a number of tenants were
negatively impacted and requested short-term rent amendments.
Aberdeen Standard Investments has 25 offices across Europe and
employs over 250 real estate professionals, including over 80 real
estate asset managers and 29 transaction managers. These local
"feet on the ground" ensure that we are close to these tenants and
have an excellent ongoing understanding of their business
operations. The relationships our asset managers have built with
tenants, coupled with a deep understanding of their local logistics
markets, ensured that all tenant discussions were highly productive
from the start.
Following these discussions, the Company agreed on six rent
deferrals and seven rent free periods in exchange for material
lease extensions resulting in a total rent collection of 100% in
Q1, 85% in Q2 and 96% in Q3 as at mid-September. All rents due
under the terms of these agreements have been paid on time and no
new requests have been made for further rent amendments.
The successful conclusion of these discussions, alongside the
continued impressive NAV performance, supported the Board's
decision to declare interim dividends in respect of Q1 and Q2 2020
in line with guidance given at the start of the year. Based on
current data, we believe the net impact on short-term cash flows
will be limited as the majority of the deferred rents will be
received in H2 2020 or early 2021. 97% of full year 2020 rental
income is expected to be received by year end.
Discussions on lease prolongations in exchange for rent-free
periods were mainly with smaller tenants in our multi-tenant
buildings, typically with shorter lease durations. The Investment
Manager is pleased with the outcome of these negotiations and
believes that these agreements strike a satisfactory balance
between assisting our tenants and securing future longer-term
income for the Company.
Since restrictions have eased, the Investment Manager has not
received and does not envisage further requests from tenants to
amend payment terms. However, if a situation arose where a tenant
needed to be replaced, we are in a good position to find a
replacement quickly given the quality of the locations and the size
of the warehouses held in the portfolio.
ESG one of key focus areas
Environmental and Social Governance (ESG) is one of the key
strategic goals where the Investment Manager wants to distinguish
itself from its peer group. Our ambition remains to obtain an
additional green star in the Global Real Estate Sustainability
Benchmark assessment (GRESB), which is used to measure the
portfolio's ESG performance against a peer group of comparable
funds. In the first submission for the year 2018, the Company's
previously much smaller portfolio earned two out of the maximum
five stars, which was close to the market average.
Results from the 2019 submission, with thirteen warehouses then
incorporated, should be received shortly. We have an ambition to
reduce the Company's carbon footprint and add ESG credentials to
the portfolio where possible. Good examples here are the progress
made on solar panel projects in Den Hoorn and Ede which are due to
be operational in Q1 of next year, the collection of energy and
water consumption statistics which is monitored and analysed in a
program called Envizi, light sustainability audits in Erlensee and
Waddinxveen and a regular tenant satisfaction survey. Based upon
the conversations we have with our tenants, we recognise that ESG
is not only important to us but also to our tenants and their
underlying customer base. An increased focus here should increase
the 'stickiness'
of our tenants and their desire to stay beyond the term of the
lease.
Our regular tenant survey continuously improves our
understanding of our tenants' thoughts and requirements and the
consumption data collated guides us to where improvements and
savings can be made. This is clearly good for reporting but also
for our tenants when better energy efficiency and cost savings will
help support their businesses.
Outlook
The pandemic has had a very direct and disruptive effect on
global supply chains with economies falling into deep recessions.
Clearly, there are short-term challenges for companies that have
links to parts of the economy that have been hit hardest such as
retail, restaurants or the automotive industry. However, demand for
logistics is, and continues to be, supported by strong growth in
online sales, the re-shoring of manufacturing activities and the
building of inventory levels to make supply chains more resilient.
This and the undersupplied market across Europe makes logistics one
of the preferred sectors for many real estate investors with a
focus on quality and 'Core' logistics. This gives confidence that
the logistics market is well-positioned to outperform the majority
of the real estate market.
Our on-the-ground asset managers remain in close dialogue with
our 33 tenants, regularly discussing value enhancement
opportunities. Discussions are on-going regarding the expansion of
our warehouse in Meung-sur-Loire.
Aberdeen Standard Investments' European real estate research
team underpins and supports our views not only on the logistics
sector but also the most favourable country locations for growth.
We continue to engage regularly to better understand the likely
impact of changing global trade on regions where we do or indeed
may invest.
The pipeline of possible purchases remains strong despite the
competitive market and discussions continue over new acquisition
options including short term development opportunities. It remains
our desire to increase the size of the portfolio to provide
increased country and tenant diversification and provide
shareholders with solid, reliable returns from what is an exciting
area of the real estate market.
Aberdeen Standard Investments Ireland Limited
29 September 2020
PROPERTY PORTFOLIO
Property Tenure Principal Tenant
1 France, Avignon (Noves) Freehold Biocoop
2 France, Meung sur Loire Freehold Office Depot
3 Germany, Erlensee Freehold Bergler
4 Germany, Flörsheim Freehold DS Smith
5 Poland, Krakow Freehold Lynka
6 Poland, Warsaw Freehold DHL
7 Spain, Leon Freehold Decathlon
8 Spain, Madrid Freehold DHL
9 the Netherlands, Ede Freehold AS Watson (Kruidvat)
10 the Netherlands, Oss Freehold Orangeworks
11 the Netherlands, 's Heerenberg Freehold JCL Logistics
12 the Netherlands, Waddinxveeen Freehold Combilo
13 the Netherlands, Zeewolde Freehold VSH Fittings
14 the Netherlands, Den Hoorn Leasehold van der Helm
INTERIM BOARD REPORT - DISCLOSURES
Principal Risks and Uncertainties
The principal risks and uncertainties affecting the Company are
set out on pages 10 to 14 of the Annual Report and Financial
Statements for the year ended 31 December 2019 (the "2019 Annual
Report") together with details of the management of the risks and
the Company's internal controls. These risks have not changed and
can be summarised as follows:
- Strategic Risk: Strategic Objectives and Performance;
- Investment and Asset Management Risk: Investment Strategy;
- Investment and Asset Management Risk: Developing and Refurbishing Property;
- Investment and Asset Management Risk: Health and Safety;
- Investment and Asset Management Risk: Environment;
- Financial Risk: Macroeconomic;
- Financial Risk: Gearing;
- Financial Risk: Liquidity and FX Risk;
- Financial Risk: Credit Risk;
- Financial Risk: Insufficient Income Generation;
- Regulatory Risk: Compliance
- Regulatory Risk: Service Providers; and
- Operational risk: Business Continuity.
The Board also has a process in place to identify emerging
risks. If any of these are deemed to be significant, these risks
are categorised, rated and added to the Company's risk matrix.
The Board has reviewed the risks related to the COVID-19
pandemic. COVID-19 is continuing to impact the underlying tenants
in the Company's warehouse portfolio in varying degrees due to the
disruption of supply chains and demand for products and services,
increased costs and potential issues around changes in cash flow
forecasts.
The pandemic has significantly impacted world stock markets as
well as creating uncertainty around the timing of future revenues.
However, the Board notes the Investment Manager's robust and
disciplined investment process which continues to focus on high
quality warehouses located across Europe and prudent cash flow
management. The pandemic has also impacted the Company's third
party service providers, with business continuity and home working
plans having been implemented. The Board, through the Manager, has
been closely monitoring all third party service arrangements and is
pleased to report that it has not seen any reduction in the level
of service provided to the Company to date.
There remains uncertainty surrounding Brexit in the run up to
the expiry of transitional arrangements on 31 December 2020. The
Board will continue to monitor developments.
Related Party Transactions
ASFML acts as Alternative Investment Fund Manager, Aberdeen
Standard Investments Ireland Limited acts as Investment Manager and
Aberdeen Asset Management PLC acts as Company Secretary to the
Company; details of the service and fee arrangements can be found
in the 2019 Annual Report, a copy of which is available on the
Company's website. Details of the transactions with the Manager
including the fees payable to Aberdeen Standard group companies are
disclosed in note 16 of this Half Yearly Report.
Going Concern
In accordance with the Financial Reporting Council's Guidance on
Risk Management, Internal Control and Related Financial and
Business Reporting, the Directors have undertaken a rigorous review
and consider that there are no material uncertainties and that the
adoption of the going concern basis of accounting is appropriate.
This review included the additional risks relating to the ongoing
COVID-19 pandemic and, where appropriate, action taken by the
Manager and Company's service providers in relation to those risks.
An analysis of the level of rental payments from tenants together
with operational and other Company costs has been modelled covering
a range of potential COVID-19 scenarios. In addition, the Company
maintains an overdraft facility with Societe Generale which allows
the Company to draw down additional funds if unexpected short term
liquidity issues were to arise. The Board notes that the Manager
remains in regular contact with tenants and third party suppliers
and continues to have a constructive dialogue with all parties.
Accordingly, the Directors believe that the Company has adequate
financial resources to continue in operational existence for the
foreseeable future and at least 12 months from the date of this
Half Yearly Report. Accordingly, the Directors continue to adopt
the going concern basis in preparing these financial
statements.
Directors' Responsibility Statement
The Directors are responsible for preparing this half-yearly
financial report in accordance with applicable law and regulations.
The Directors confirm that to the best of their knowledge:
- the condensed set of financial statements contained within the
half-yearly financial report has been prepared in accordance with
International Accounting Standard 34 'Interim Financial Reporting'
and gives a true and fair view of the assets, liabilities,
financial position and net return of the Company as at 30 June
2020; and
- the Interim Board Report (constituting the interim management
report) includes a fair review of the information required by rule
4.2.7R of the UK Listing Authority Disclosure Guidance and
Transparency Rules (being an indication of important events that
have occurred during the first six months of the financial year and
their impact on the condensed set of financial statements and a
description of the principal risks and uncertainties for the
remaining six months of the financial year) and 4.2.8R (being
related party transactions that have taken place during the first
six months of the financial year and that have materially affected
the financial position of the Company during that period).
Tony Roper
Chairman
29 September 2020
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE
INCOME
For the period ended 30 June 2020
1 January 1 January
to to
Revenue Capital 30 June Revenue Capital 30 June
2020 2019
Total Total
=============================
Notes EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
================================== ======== ======== ========= ========== ========= =========
REVENUE
Rental Income 9,896 - 9,896 5,058 - 5,058
Property service charge
income 1,492 - 1,492 936 - 936
Other operating income 88 - 88 6 - 6
============================= === ======== ======== ========= ========== ========= =========
Total Revenue 2 11,476 - 11,476 6,000 - 6,000
============================= === ======== ======== ========= ========== ========= =========
GAINS ON INVESTMENTS
Gains on Revaluation
of
investment properties 8 - 7,218 7,218 - 2,226 2,226
============================= === ======== ======== ========= ========== ========= =========
Total Income and gains on
investments - 7,218 7,218 6,000 2,226 8,226
================================== ======== ======== ========= ========== ========= =========
EXPITURE
Investment management
fee (993) - (993) (755) - (755)
Direct property expenses (597) - (597) (1,127) - (1,127)
Property service charge
exposure (1,492) - (1,492) - - -
SPV property management
fee (63) - (63) (56) - (56)
Other expenses (481) - (481) (1,049) - (1,049)
============================= === ======== ======== ========= ========== ========= =========
Total expenditure (3,626) - (3,626) (2,987) - (2,987)
================================== ======== ======== ========= ========== ========= =========
Net operating return before
finance costs 7,850 7,218 15,068 3,013 2,226 5,239
================================== ======== ======== ========= ========== ========= =========
FINANCE COSTS
Finance costs 3 (1,226) - (1,226) (461) - (461)
============================= === ======== ======== ========= ========== ========= =========
Net return before taxation 6,624 7,218 13,842 2,552 2,226 4,778
================================== ======== ======== ========= ========== ========= =========
Taxation 4 (124) (2,024) (2,148) - (720) (720)
============================= === ======== ======== ========= ========== ========= =========
Net return for the period 6,500 5,194 11,694 2,552 1,506 4,058
================================== ======== ======== ========= ========== ========= =========
OTHER COMPREHENSIVE INCOME
TO BE RECLASSIFIED TO
PROFIT OR LOSS
Currency translation
differences on initial
capital proceeds - 190 190 70 203 273
Currency translation
on conversion of
distribution payments (783) 7 (776) - - -
Effect of foreign exchange
differences (243) - (243) - - -
============================= === ======== ======== ========= ========== ========= =========
Other comprehensive income (1,026) 197 (829) 70 203 273
================================== ======== ======== ========= ========== ========= =========
Total comprehensive return
for the period 5,474 5,391 10,865 2,622 1,709 4,331
================================== ======== ======== ========= ========== ========= =========
Basic and diluted earnings
per share 6 2.77c 2.21c 4.98c 1.36c 0.80c 2.16c
============================= === ======== ======== ========= ========== ========= =========
The accompanying notes are an integral part of the Financial
Statements.
The total column of the Condensed Statement of Comprehensive
Income is the profit and loss account of the Company.
All revenue and capital items in the above statement derive from
continuing operations
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE
INCOME (Cont'd)
1 January to
31 December
Revenue Capital 2019
Total
=======================================
Notes EUR'000 EUR'000 EUR'000
============================================ ========= ========= ============
REVENUE
Rental Income 13,376 - 13,376
Property service charge income 2,233 - 2,233
Other operating income 23 - 23
======================================= === ========= ========= ============
Total Revenue 2 15,632 - 15,632
======================================= === ========= ========= ============
GAINS ON INVESTMENTS
Gains on Revaluation of
investment properties 8 - 16,852 16,852
======================================= === ========= ========= ============
Total Income and gains on investments 15,632 16,852 32,484
============================================ ========= ========= ============
EXPITURE
Investment management fee (1,695) - (1,695)
Direct property expenses (265) - (265)
Property service charge exposure (2,233) - (2,233)
SPV property management fee (154) - (154)
Other expenses (1,728) - (1,728)
======================================= === ========= ========= ============
Total expenditure (6,075) - (6,075)
============================================ ========= ========= ============
Net operating return before finance
costs 9,557 16,852 26,409
============================================ ========= ========= ============
FINANCE COSTS
Finance costs 3 (1,411) - (1,411)
======================================= === ========= ========= ============
Net return before taxation 8,146 16,852 24,998
============================================ ========= ========= ============
Taxation 4 (415) (4,662) (5,077)
======================================= === ========= ========= ============
Net return for the period 7,731 12,190 19,921
============================================ ========= ========= ============
OTHER COMPREHENSIVE INCOME TO
BE RECLASSIFIED TO PROFIT OR
LOSS
Currency translation differences
on initial
capital proceeds - 136 136
Currency translation on conversion
of
distribution payments - (328) (328)
Effect of foreign exchange differences (300) - (300)
======================================= === ========= ========= ============
Other comprehensive income (300) (192) (492)
============================================ ========= ========= ============
Total comprehensive return for the
period 7,431 11,998 19,429
============================================ ========= ========= ============
Basic and diluted earnings per
share 6 3.72c 5.86c 9.58c
======================================= === ========= ========= ============
The accompanying notes are an integral part of the Financial
Statements.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEET
30 June 30 June 31 December
2020 2019 2019
=================================
Notes EUR'000 EUR'000 EUR'000
===================================== ========= ========= ===========
NON-CURRENT ASSETS
Investment properties 8 423,509 272,314 348,519
Deferred tax asset 4 1,323 - -
================================= ========= ========= ===========
Total non-current assets 424,832 272,314 348,519
===================================== ========= ========= ===========
CURRENT ASSETS
Trade and other receivables 9 11,193 10,387 9,883
Cash and cash equivalents 10 18,705 23,702 24,579
Other Assets 203 - -
================================= ========= ========= ===========
Total current assets 30,101 34,089 34,462
===================================== ========= ========= ===========
Total assets 454,933 306,403 382,981
===================================== ========= ========= ===========
CURRENT LIABILITIES
Lease liability 11 550 - -
Trade and other payables 12 9,689 9,110 9,352
Derivative financial instruments 243 - 8
================================= ========= ========= ===========
Total current liabilities 10,482 9,110 9,360
===================================== ========= ========= ===========
NON-CURRENT LIABILITIES
Bank Loans 13 143,425 92,900 107,916
Lease liability 11 22,751 - -
Deferred tax liability 4 8,009 845 5,428
================================= ========= ========= ===========
Total non-current liabilities 174,185 93,745 113,344
===================================== ========= ========= ===========
Total liabilities 184,667 102,855 122,704
===================================== ========= ========= ===========
Net assets 270,266 203,548 260,277
===================================== ========= ========= ===========
SHARE CAPITAL AND RESERVES
Share capital 14 2,700 2,122 2,645
Share premium 56,047 - 50,364
Special distributable reserve 187,707 200,835 191,579
Capital reserve 13,609 (2,071) 8,218
Revenue reserve 10,203 2,662 7,471
================================= ========= ========= ===========
Equity shareholders' funds 270,266 203,548 260,277
===================================== ========= ========= ===========
Net asset value per share 7 EUR 1.13 EUR 1.09 EUR 1.11
================================= ========= ========= ===========
The accompanying notes are an integral part of the Financial
Statements.
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN
EQUITY
For the period ended 30 June 2020
Special
Share Share distributable Capital Revenue
capital premium reserve reserve reserve Total
============================
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
============================ ========= ========= ============== ========= ========= =========
Balance at 1 January 2020 2,645 50,364 191,579 8,218 7,471 260,277
Share Issue 55 5,741 - - - 5,796
Share Issue costs - (58) - - - (58)
Total Comprehensive return
for the period - - - 5,391 5,474 10,865
Interim Distributions paid - - (3,872) - (2,742) (6,614)
============================ ========= ========= ============== ========= ========= =========
Balance at 30 June 2020 2,700 56,047 187,707 13,609 10,203 270,266
============================ ========= ========= ============== ========= ========= =========
Balance at 1 January 2019 2,122 - 203,691 (3,780) 40 202,073
Total Comprehensive return
for the period - - - 1,709 2,622 4,331
Interim Distributions paid - - (2,856) - - (2,856)
============================ ========= ========= ============== ========= ========= =========
Balance at 30 June 2019 2,122 - 200,835 (2,071) 2,662 203,548
============================ ========= ========= ============== ========= ========= =========
Balance at 1 January 2019 2,122 - 203,691 (3,780) 40 202,073
Share Issue 523 51,147 - - - 51,670
Share Issue costs - (783) - - - (783)
Total Comprehensive return
for the year - - - 11,998 7,431 19,429
Dividends paid - - (12,112) - - (12,112)
============================ ========= ========= ============== ========= ========= =========
Balance at 31 December 2019 2,645 50,364 191,579 8,218 7,471 260,277
---------------------------- --------- --------- -------------- --------- --------- ---------
The accompanying notes are an integral part of the Financial
Statements.
UNAUDITED CONDENSED CONSOLIDATED CASH FLOW STATEMENT
As at 30 June 2020
1 January 1 January to 1 January to
to 30 June 31 December
30 June 2019 2019
2020
=========================================
Notes EUR'000 EUR'000 EUR'000
============================================= ========= ============ ============
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss for the period before
taxation 13,842 4,058 19,921
Adjustments for:
Gains on investment properties 8 (7,218) (2,226) (16,852)
Amortisation of tenant incentives and
leasing costs (1,512) - -
Decrease in Land Leasehold Liability 126 - -
Increase in operating trade and other
receivables 983 1,292 1,796
Increase/(Decrease) in operating trade
and other payables 799 (1,323) 6,123
Decrease in operating other assets (156) - -
Finance costs 3 1,226 461 1,411
========================================= ========= ============ ============
Cash generated by operations (5,752) (1,796) 12,399
============================================= ========= ============ ============
Net cash outflow from operating activities 8,090 2,262 12,399
============================================= ========= ============ ============
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of investment properties 8 (46,972) (118,549) (182,749)
Derivative financial instruments (8) - 8
Currency translation differences (564) 273 (492)
========================================= ========= ============ ============
Net cash outflow from investing activities (47,544) (118,276) (183,233)
============================================= ========= ============ ============
CASH FLOWS FROM FINANCING ACTIVITIES
Dividends paid 5 (6,614) (2,856) (12,112)
Finance costs 3 (1,226) (461) (1,411)
Bank loans drawn 35,682 92,900 107,916
Proceeds from share issue 5,796 - 51,670
Issue costs relating to share issue (58) - (783)
========================================= ========= ============ ============
Net cash inflow from financing activities 33,580 89,583 145,280
============================================= ========= ============ ============
Net (decrease)/increase in cash and
cash equivalents (5,874) (26,431) (25,554)
============================================= ========= ============ ============
Opening balance 24,579 50,133 50,133
============================================= ========= ============ ============
Closing cash and cash equivalents 10 18,705 23,702 24,579
========================================= ========= ============ ============
REPRESENTED BY
============================================= ========= ==========================
Cash at bank 18,705 23,702 24,579
============================================= ========= ============ ============
The accompanying notes are an integral part of the Financial
Statements.
NOTES TO THE FINANCIAL STATEMENTS
1. Accounting Policies
The Unaudited Consolidated Financial Statements have been
prepared in accordance with International Financial Reporting
Standard ("IFRS") IAS 34 'Interim Financial Reporting' and are
consistent with the accounting policies set out in the statutory
accounts of the Group for the year ended 31 December 2019.
The condensed Unaudited Consolidated Financial Statements for
the six months ended 30 June 2020 do not include all of the
information required for a complete set of IFRS financial
statements and should be read in conjunction with the Consolidated
Financial Statements of the Group for the year ended 31 December
2019, which were prepared under full IFRS requirements as adopted
by the EU. The financial information in this Report does not
comprise statutory accounts within the meaning of Section 434 - 436
of the Companies Act 2006. Those financial statements have been
delivered to the Registrar of Companies and included the report of
the auditor which was unqualified and did not contain a statement
under either section 498(2) or 498(3) of the Companies Act 2006.
The financial information for the six months ended 30 June 2020 and
the period ended 30 June 2019 has not been audited or reviewed by
the Company's auditor.
2. Revenue
Half year ended Half year ended Year ended
30 June 2020 30 June 2019 31 December
2019
================================
EUR'000 EUR'000 EUR'000
================================ =============== =============== ============
Rental income 9,896 5,058 13,376
Other income 88 6 23
Property service charge income 1,492 936 2,233
================================ =============== =============== ============
Total revenue 11,476 6,000 15,632
================================ =============== =============== ============
3. Finance costs
Half year ended Half year ended Year ended 31
30 June 2020 30 June 2019 December 2019
==============================
EUR'000 EUR'000 EUR'000
============================== =============== =============== ==============
Liquidity fund interest paid - 58 37
Interest on bank loans 968 403 1,158
Bank interest 158 - 98
Amortisation of loan costs 100 - 118
============================== =============== =============== ==============
Total finance costs 1,226 461 1,411
============================== =============== =============== ==============
4. Taxation
-- Tax charge in the Group Statement of Comprehensive Income
Half year ended 30 Half year ended Year ended
June 2020 30 June 2019 31 December 2019
====================
Revenue Capital Total Revenue Capital Total Revenue Capital Total
====================
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
==================== ========== ========= ========= ======= ======= ======= ======== ======== ========
Current taxation:
Overseas taxation 124 - 124 - - - 415 - 415
Deferred taxation:
Overseas taxation - 2,024 2,024 - 720 720 - 4,662 4,662
==================== ========== ========= ========= ======= ======= ======= ======== ======== ========
Total taxation 124 2,024 2,148 - 720 720 415 4,662 5,077
==================== ========== ========= ========= ======= ======= ======= ======== ======== ========
-- Tax in the Group Balance Sheet
As at 30 June 2020 As at 30 June 2019 As at 31 December
2019
=============================
Revenue Capital Total Revenue Capital Total Revenue Capital Total
=============================
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
============================= ======== ======= ======== ======== ======== ======= ======= ======= ========
Deferred tax assets:
============================= =========================== =======================================================
On tax losses - 1,323 1,323 - - - - 766 766
============================= ======== ======= ======== ======== ======== ======= ======= ======= ========
Deferred tax liabilities:
============================= ====================================================================================
Differences between
tax and property
revaluation - 8,009 8,009 - 845 845 - 5,428 5,428
============================= ======== ======= ======== ======== ======== ======= ======= ======= ========
5. Distributions
30 June 2020
EUR'000
===================================================== ============
2019 Fourth Interim dividend of 1.27p per Share paid
27 March 2020 3,307
===================================================== ============
2020 First Interim dividend of 1.24p per Share paid
26 June 2020 3,307
===================================================== ============
Total Dividends Paid 6,614
===================================================== ============
A fourth quarterly interim dividend for 2019 of 1.27p per Share
was paid on 27 March 2020 to shareholders on the register on 6
March 2020. The distribution was split 0.90p dividend income and
0.37p qualifying interest income.
A first quarterly interim dividend for 2020 of 1.24p per Share
was paid on 26 June 2020 to shareholders on the register on 5 June
2020. The distribution was split 1.05p dividend income and 0.19p
qualifying interest income.
A second quarterly interim dividend for 2020 of 1.24p per Share
was paid on 25 September 2020 to shareholders on the register on 4
September 2020. The distribution was split 0.93p dividend income
and 0.31p qualifying interest income. In line with International
Financial Reporting Standards, this dividend will be recorded in
the period paid.
6. Earnings per share (basic and diluted)
30 June 30 June 31 December
2020 2019 2019
============================================ =========== =========== ===========
Revenue net return attributable to Ordinary
shareholders (EUR'000) 6,500 2,552 7,731
Weighted average number of shares in issue
during the period 234,692,309 187,500,001 207,845,206
============================================ =========== =========== ===========
Total revenue return per ordinary share 2.77c 1.36c 3.72c
============================================ =========== =========== ===========
Capital return attributable to Ordinary
shareholders (EUR'000) 5,194 1,506 12,190
Weighted average number of shares in issue
during the period 234,692,309 187,500,001 207,845,206
============================================ =========== =========== ===========
Total capital return per ordinary share 2.21c 0.80c 5.86c
============================================ =========== =========== ===========
Total return per ordinary share 4.98c 2.16c 9.58c
============================================ =========== =========== ===========
Earnings per Share is calculated on the revenue and capital loss
for the period (before other comprehensive income) and is
calculated using the weighted average number of Shares in the
period.
7. Net asset value per share
30 June 30 June 31 December
2020 2019 2019
======================================== =========== =========== ===========
Net assets attributable to shareholders
(EUR'000) 270,266 203,548 260,277
Number of shares in issue 239,500,001 187,500,001 234,500,001
======================================== =========== =========== ===========
Net asset value per share (EUR) 1.13 1.09 1.11
======================================== =========== =========== ===========
8. Investment properties
30 June 30 June 31 December
2020 2019 2019
==========================================
EUR'000 EUR'000 EUR'000
========================================== ======= ======= ===========
Opening carrying value 348,519 148,918 148,918
Purchase at costs 44,471 121,170 182,749
Gains/losses on revaluation to fair value 7,218 2,226 16,852
Leasehold 23,301 - -
========================================== ======= ======= ===========
Total Carrying value 423,509 272,314 348,519
========================================== ======= ======= ===========
The fair value of the investment properties amounted to
EUR428,201,000. The difference between the fair value and the value
per the condensed consolidated balance sheet consists of accrued
income relating to the pre-payment for rent free periods recognised
over the life of the leases totaling EUR4,692,000 which is
separately recorded in the financial statements within trade and
other receivables.
On 14 January 2020 the Company acquired a property based in Den
Hoorn, the Netherlands. The property was acquired on a leasehold
agreement, the present value the future leasehold obligations as at
30 June 2020 amounted to EUR23,301,000. The maturity date of this
leasehold agreement is 1 July 2044. The annual ground lease
payments amount to EUR531,000 per annum and are paid quarterly. The
Company reserves the option to acquire the freehold ownership pre 1
July 2044 for the total sum of EUR15,983,000.
Investment property valuation methodology is unchanged from the
detailed methodology included in the company's 31 December 2019
annual report.
9. Trade and other receivables
30 June 30 June 31 December
2020 2019 2019
========================
EUR'000 EUR'000 EUR'000
======================== ======= ======= ===========
Rents receivable 2,652 2,189 3,327
Accrued income - 310 160
VAT receivable 266 - 3,310
Cash held by Solicitors - - 165
Lease incentives 4,693 346 1,606
Deferred tax - - 766
Other receivables 3,582 7,542 549
======================== ======= ======= ===========
Total receivables 11,193 10,387 9,883
======================== ======= ======= ===========
10. Cash and cash equivalents
30 June 30 June 31 December
2020 2019 2019
================================
EUR'000 EUR'000 EUR'000
================================ ======= ======= ===========
Cash at bank 18,705 23,702 24,579
================================ ======= ======= ===========
Total cash and cash equivalents 18,705 23,702 24,579
================================ ======= ======= ===========
11. Leasehold Liability
30 June 2020
=============================================================
EUR'000
============================================================= ============
Maturity analysis - contractual undiscounted cash flows
Less than one year 688
One to five years 2,201
More than five years 26,440
============================================================= ============
Total undiscounted lease liabilities 29,329
============================================================= ============
Lease liability included in the statement of financial
position
Current 550
Non - Current 22,751
============================================================= ============
Total lease liability included in the statement of financial
position 23,301
============================================================= ============
12. Trade and other payables
30 June 30 June 31 December
2020 2019 2019
==========================================
EUR'000 EUR'000 EUR'000
========================================== ======= ======= ===========
Rental income received in advance 2,453 1,513 2,224
Accrued acquisition and development costs 891 2,621 1,521
Management fee payable 993 1,311 471
VAT payable 625 - 670
Trade Creditors 1,338 - 1,948
Tenant Deposits 1,196 - 1,197
Other payables - - 11
All other fees payable - - 651
Accruals 1,982 - 659
Other fees payable 211 3,665 -
========================================== ======= ======= ===========
Total payables 9,689 9,110 9,352
========================================== ======= ======= ===========
13. Bank Loans
30 June 30 June 31 December
2020 2019 2019
====================
EUR'000 EUR'000 EUR'000
==================== ======= ======= ===========
External Bank Loans 143,425 92,900 107,916
==================== ======= ======= ===========
Total payables 143,425 92,900 107,916
==================== ======= ======= ===========
The total drawdown of the bank loans amounted to EUR144,600,000.
The difference between the external loans drawdowns and the value
per the condensed consolidated balance sheet consists of financing
fees and the amortised portion related to the external bank loans
totaling EUR1,175,000. It is recorded in the financial statements
in the same line as bank loans.
14. Share capital
Half year ended Half year ended Year ended
30 June 30 June 31 December
2020 2019 2019
=======================
EUR'000 EUR'000 EUR'000
======================= =============== =============== ============
Opening balance 2,645 2,122 2,122
Ordinary shares issued 55 - 523
======================= =============== =============== ============
Ending balance 2,700 2,122 2,645
======================= =============== =============== ============
Ordinary Shareholders participate in all general meetings of the
Company on the basis of one vote for each Share held. Each Ordinary
share has equal rights to dividends and equal rights to participate
in a distribution arising from a winding up of the Company. The
Ordinary Shares are not redeemable.
The total number of Shares authorised, issued and fully paid is
239,500,001. The nominal value of each Share is GBP0.01. Share
proceeds in respect of five million additional shares issued at
GBP1.05 were received on 23 June 2020 and converted to Euro at a
rate of GBP1:EUR1.104.
15. Financial instruments and investment properties Fair value hierarchy
IFRS 13 requires the Group to classify its financial instruments
held at fair value using a hierarchy that reflects the significance
of the inputs used in the valuation methodologies. These are as
follows:
Level 1 - quoted prices in active markets for identical
investments;
Level 2 - other significant observable inputs (including quoted
prices for similar investments, interest rates, prepayments, credit
risk, etc.); and
Level 3 - significant unobservable inputs.
The following table shows an analysis of the fair values of
investment properties recognised in the balance sheet by level of
the fair value hierarchy:
Total fair
Level 1 Level 2 Level 3 value
EUR'000 EUR'000 EUR'000 EUR'000
====================== ======== ======== ======== ==========
30 June 2020
Investment properties - - 423,509 423,509
30 June 2019
Investment properties - - 272,314 272,314
31 December 2019
Investment properties - - 348,519 348,519
====================== ======== ======== ======== ==========
The lowest level of input is the underlying yields on each
property which is an input not based on observable market data.
The fair value of investment properties as at 30 June 2020
amounted to EUR428,201,000. The difference between the fair value
and the value per the condensed consolidated balance sheet consists
of accrued income relating to the pre-payment for rent free periods
recognised over the life of the leases totaling EUR4,692,000 which
is separately recorded in the financial statements as trade and
other receivables.
The following table shows an analysis of the fair values of
derivative financial instruments recognised in the balance sheet by
level of the fair value hierarchy:
Total fair
Level 1 Level 2 Level 3 value
EUR'000 EUR'000 EUR'000 EUR'000
================================= ======== ======== ======== ==========
30 June 2020
Derivative Financial Instruments - 243 - 243
30 June 2019
Derivative Financial Instruments - - - -
31 December 2019
Derivative Financial Instruments - 8 - 8
================================= ======== ======== ======== ==========
The lowest level of input is EUR:GBP exchange rate.
The Company used forward foreign exchange contracts to mitigate
potential volatility of income returns and to provide greater
certainty as to the level of Sterling distributions expected to be
paid in respect of the period covered by the relevant currency
hedging instrument. Derivatives are measured at fair value
calculated by reference to forward exchange rates for contracts
with similar maturity profiles.
16. Related party transactions
The Company's Alternative Investment Fund Manager ('AIFM')
throughout the period was Aberdeen Standard Fund Managers Limited
("ASFML"). Under the terms of a Management Agreement dated 17
November 2017 the AIFM is appointed to provide investment
management, risk management and general administrative services
including acting as the Company Secretary. The agreement is
terminable by either the Company or ASFML on not less than 12
months' written notice.
Under the terms of the agreement portfolio management services
are delegated by ASFML to Aberdeen Standard Investments Ireland
Limited ('ASIIL'). The total management fees charged to the
Consolidated Statement of Comprehensive Income during the period
were EUR993,000, of which EUR993,000 was payable at the period
end.
Under the terms of a Global Secretarial Agreement between ASFML
and Aberdeen Asset Management PLC ('AAM PLC'), company secretarial
services are provided to the Company by AAM PLC.
The Directors of the Company received fees for their services
totaling EUR83,000.
17. Post balance sheet events
On 30 July 2020, the Company announced that it had raised gross
proceeds of approximately GBP5.2 million (equivalent to
approximately EUR5.7 million at the then prevailing exchange rate)
through the issue of 5,000,000 new Ordinary shares under the
general authority to allot shares granted by shareholders at the
AGM held on 30 June 2020.
A second quarterly interim dividend for 2020 of 1.24p per Share
was paid on 25 September 2020 to shareholders on the register on 4
September 2020. The distribution was split 0.93p dividend income
and 0.31p qualifying interest income.
18. Ultimate parent company
In the opinion of the Directors on the basis of shareholdings
advised to them, the Company has no immediate or ultimate
controlling party.
19. This Half Yearly Report was approved by the Board and
authorised for issue on 29 September 2020.
The Half Yearly Report will be printed and issued to
shareholders and further copies will be available at Bow Bells
House, 1 Bread Street, London EC4M 9HH and on the Company's website
eurologisticsincome.co.uk*
* Neither the Company's website nor the content of any website
accessible from hyperlinks on it (or any other website) is (or is
deemed to be) incorporated into, or forms (or is deemed to form)
part of this announcement.
By order of the Board
ABERDEEN ASSET MANAGEMENT PLC, SECRETARY
29 September 2020
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END
IR EANNNAESEEFA
(END) Dow Jones Newswires
September 30, 2020 02:00 ET (06:00 GMT)
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