abrdn European Logistics Income plc Update research from QuotedData
January 12 2023 - 11:13AM
RNS Non-Regulatory
TIDMASLI
abrdn European Logistics Income plc
12 January 2023
abrdn European Logistics Income - Update research from
QuotedData
12(th) January 2023
Negotiating choppy waters
High interest rates have hit the share prices of real estate
companies, with those in sectors with low investment yields, such
as logistics, particularly impacted. abrdn European Logistics
Income (ASLI) is no different and the market turmoil has seen its
share price discount to net asset value (NAV) widen to 34.0% - in
line with its UK peers. This is despite the fact that the spread
between property yields and the cost of debt is far wider in Europe
(property yields were higher in Europe than the UK and cost of debt
lower meaning rising interest rates would put less pressure on
property yields in Europe in comparison to the UK and suggesting
values will be less impacted).
The fundamentals of the European logistics sector remain strong.
A chronic shortage of supply (below 3% across Europe and as low as
2% in prime markets) and robust demand should see strong rental
growth remain. ASLI's income is linked to inflation, with 66% of it
uncapped (meaning rents increase annually in line with inflation),
which will feed through to stronger rental growth this year and
next. This should off-set inevitable valuation declines as
investment yields rise.
Meanwhile, ASLI's borrowings are fixed for an average of four
years at an interest rate cost of around 2%. The wide discount to
NAV and dividend yield on offer appears attractive for a long-term
investment.
Full Research:
https://quoteddata.com/research/abrdn-european-logistics-income-negotiating-choppy-waters-qd/
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NB: Marten & Co was paid to produce this note on abrdn
European Logistics Income Plc and it is for information purposes
only. It is not intended to encourage the reader to deal in the
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