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ASLI reaffirms dividend after better than expected rent collection

Aberdeen Standard European Logistics Income (ASLI) has reaffirmed its dividend policy in a company update.

The group said it intends to pay its quarterly dividend for the second quarter in line with its policy after higher than expected rent collection figures.

It collected 85% of rental income that was due in Q2, ahead of its forecast of 82%. For the outstanding rental income, the company has agreed short-term rent deferrals and a small number of rent free periods, in exchange for material lease extensions.

It paid a first quarter dividend of 1.24p (equivalent to 1.41 euro cents) on 26 June and the Q2 dividend is expected to be declared in late-August 2020.

Portfolio Valuation

As at 31 March 2020, the company’s portfolio was valued at €404.9m and consists of 14 assets located across five European countries. The next valuation update for the quarter to the end of June 2020 will no longer be subject to a “material uncertainty clause” after the Royal Institute of Chartered Surveyors (RICS) concluded that there was enough up-to-date comparable market evidence in the industrial and logistics sector to base opinions of value. The valuation for 30 June 2020 is expected to be released in mid-August 2020.

Revolving Credit Facility

The company is in advanced discussions with a number of debt providers regarding the provision of an enlarged 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 of this facility are likely to be announced in Q3 2020.

[QD Comment: This will be welcome news for ASLI shareholders as they will immediately benefit from the income-producing assets without any cash drag, which is so often the case with property companies due to the length of time it takes to complete a property transaction.]

Share Issuance

ASLI issued 5 million new ordinary shares in the company at a price of 105 pence per share on 23 June 2020 in response to specific investor demand. 

At its 2020 AGM, shareholders approved a fresh authority to issue up to 23,450,000 shares (representing 10% of the issued share capital). The company said that such shares would only be issued at a premium to the NAV per ordinary share at the time of issue.

EPRA Index Inclusion

On 22 June 2020, the company was added to the FTSE EPRA/NAREIT Global Real Estate Index Series, having satisfied the required eligibility criteria. [Inclusion within this series is expected to result in increased liquidity in the shares and will help broaden the company’s investor base.]

Outlook

The company said strong structural tailwinds that are benefitting the European logistics sector have been reinforced by the covid-19 pandemic. Its three largest tenants by rental income operate in the food distribution sector and continue to experience significant demand. In addition, five of the Company’s 14 properties incorporate cold storage facilities and this particular characteristic, the company said, has proven extremely resilient during the covid-19 pandemic.

It added the investment manager has an acquisition pipeline of well-located “mid-box” and urban logistics assets throughout Europe and is reviewing sale and leaseback opportunities.

ASLI : ASLI reaffirms dividend after better than expected rent collection

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