24 January 2025
abrdn European Logistics Income plc
LEI: 213800I9IYIKKNRT3G50
Portfolio Sales Update
24 January 2025 - abrdn European
Logistics Income plc (the "Company" or "ASLI"), the Company
which is invested in a diversified portfolio of European logistics
real estate, announces the sale of three assets as it pursues the
Shareholder approved managed wind-down.
In the NAV update released on 28
November 2024, the Company announced that the Investment Manager
had commenced sales processes for six assets with discussions at an
advanced stage regarding the disposal of three of these assets. The
Board is pleased to announce that the Company has now completed the
disposal of these three assets, as detailed here:
Sale
of warehouse in Oss, The Netherlands
The Company announces that it has
concluded the sale of the freehold of the 12,384 square metre
warehouse located in Oss, The Netherlands, for consideration of
€15.7 million.
The asset, constructed in 2019 and
strategically located between the Port of Rotterdam and the Ruhr
area, has been sold to the current tenant, Orangeworks.
The sale price was in line with the
latest available valuation for Q3 2024 and, following the
completion of the transaction, the Company has paid down €9.9
million of the outstanding €44.2 million debt, which is cross
collateralised with Ede and Waddinxveen, provided by Berlin
Hyp.
Sale
of warehouses in Barcelona and Madrid, Spain
The Company also announces the sale
of two assets located in Spain following a competitive open sales
process to Fidelity Real Estate Logistics for aggregate
consideration of €29.7 million, 11.9% ahead of the Q3 2024
valuation.
The 6,805 square metre building in
Coslada, Madrid, was acquired by the Company in 2019. It is a
cross-dock warehouse built in 1999 and leased to DHL (Spain)
located in a prime location near Madrid Barajas Airport, within the
A-2 Corridor del Henares - considered the first logistics ring in
Madrid.
The 13,907 square metre warehouse in
Polinyà, Barcelona was constructed in 2018 and acquired by the
Company in 2021. It is located in a prime area within the first
logistics ring 20 minutes from the city centre of Barcelona, close
to the AP-7 highway and is leased to Mediapost.
Of the net proceeds from the sale of
these two Spanish properties, €17.7 million will be applied in
paying down a portion of the €51 million ING Bank secured debt,
which is cross collateralised with Gavilanes, Madrid, Unit 4
occupied by Amazon, reducing the Company's gearing
further.
Continued sales process
Detailed due diligence is ongoing
over three assets in the Company's portfolio representing some
90,000 square metres of rentable area and further details will be
released as sales complete.
Further assets are marked for sale
with agents appointed with a view to effecting further sales by the
end of Q2. In parallel, the Investment Manager continues to have an
open dialogue with parties interested in prime logistics
space.
Leasing
The Company update dated 28 November
2024 noted that effective from 15 October 2024, MCR relocated and
expanded from the Company's Unit 2B asset (7,718 square metres) in
Getafe, Madrid, taking up the tenancy at the vacant Unit 3A with
increased space of 16,500 square metres. The agreed rent per annum
is €1,039,500 for a 7-year term lease with upward only CPI
movements. MCR's previous lease for Unit 2B had an approaching
lease break in June 2025.
Simultaneously, Molecor, an international company in solutions
for infrastructure, building and waste treatment, took up the
tenancy at Unit 2B agreeing a 5-year lease with an annual rent per
annum of €509,388, with upward only CPI adjustments.
Both leasing deals were in line with
the market ERV, reduced the vacancy rate from 6.6% to 3.7% and
improved the portfolio WAULT.
The Company is in advanced
discussions on agreeing terms with an occupier for Unit 3C and a
refreshed marketing campaign, combined with a change of leasing
agent at Unit 1B, is expected to deliver increased
enquiries.
This accretive leasing activity
improved the Company's WAULT and further enhanced the positioning
of the portfolio in Getafe, Madrid, ahead of the planned disposal
in 2025. The Investment Manager continues to seek to enhance value
through such leasing initiatives prior to sales being
advanced.
Managed Wind-Down
On 22 November 2024, approval was
granted by Shareholders for the Company to issue and redeem up to
£300 million of B Shares. The Board believes that one of the
fairest and most efficient ways of returning substantial amounts of
cash to Shareholders remains by means of a bonus issue of
redeemable B Shares.
The quantum and timing of a return of
capital to Shareholders under a B Share Scheme is dependent on the
realisation of the Company's investments, the repayment of
liabilities and funding general working capital requirements. The
adoption of a B Share scheme will not limit the ability of the
Company to return cash to Shareholders by using other mechanisms
and, if the B Share scheme is adopted, the Board will continue to
review its tax effectiveness and cost efficiency over
time.
The Company is in the process of
repatriating the net proceeds from these recent sales to the Parent
company in a tax efficient manner, ensuring no withholding tax
issues, and will update Shareholders as soon as possible as to the
expected timing of an initial return of capital, which is expected
later in Q1 2025 at the latest.
Details of the Company and its
property portfolio may be found on the Company's website
at: http://www.eurologisticsincome.co.uk
For
further information please contact:
abrdn Fund Managers
Limited
Ben
Heatley
+44 (0) 20 7156 2382
Investec Bank
plc
+44 (0) 20 7597 4000
David Yovichic
Denis Flanagan
FTI
Consulting
+44 (0) 20 3727 1000
Dido Laurimore
Richard Gotla
Oliver Parsons
