Aberdeen Standard European Logistics announces launch of issue – The board of Aberdeen Standard European Logistics (ASLI), has announced a proposed open offer, placing, offer for subscription and intermediaries offer targeting gross issue proceeds of approximately £75m at a price of 109p per new ordinary share.
This represents a discount of 8.4% to the closing mid-market share price of 119p per share as at 7 September, and a premium of 2.7% to its 30 June NAV per share of 106.1p per share.
Existing Shareholders can subscribe for one new ordinary share for every four ordinary shares held, as well as further new ordinary shares through the excess application facility.
The proposal comes as ASLI feels continental European logistics real estate is well-positioned to continue outperforming other asset classes, offering a compelling investment proposition. The sector is characterised by a critical shortage of Grade A stock, which has been exacerbated as businesses seek to future proof their operations in response to changing consumer behaviour, a trend that has been accelerated by the pandemic.
Aberdeen Standard Investments is currently performing due diligence on a pipeline of mid-box and urban logistics warehouses with an aggregate value in excess of €165m. Additionally, following ASLI’s recent acquisition of an urban logistics warehouse in Barcelona, its revolving credit facility is drawn down as to €19.5m.
ASLI’s portfolio of 16 mid-box and urban logistics warehouses, located across five European countries continues to perform strongly, delivering an NAV total return of 14.6% in euros to the year to 30 June 2021.
Statement from the chair:
At IPO in December 2017, the Company’s investment proposition was centred on the premise that e-commerce penetration in Europe was significantly behind the UK, and that the inevitable growth to follow would lead to strong returns for investors with exposure to high quality European logistics real estate. While this investment thesis was already playing out as forecast prior to 2020, COVID-19 has accelerated the trend and we have been ideally positioned to capture this growth. With e-commerce penetration in Europe continuing to lag the UK and with industry estimates of c. 300 million sq ft of additional logistics space required to meet rising demand over the next five years, we remain steadfast in our conviction in the sector’s future growth prospects.
To date we have built a diversified portfolio of 16 modern, high quality logistics warehouses with long term, inflation linked income characteristics, which has underpinned year on year valuation gains and attractive returns for shareholders. As investors recognise the structural tailwinds benefitting the sector, we look forward to the further scale and diversification benefits which this fundraise will afford.
Further information:
The Company launched in December 2017 raising gross proceeds of £187.5 million, with the investment objective of providing an attractive level of income return and capital growth from investing in high quality mid-box and urban logistics real estate in Continental Europe. Since then, the Company has delivered on its objectives and strategy and the Directors believe that an investment in the Company offers the following attractive characteristics:
- Exposure to a Portfolio of 16 high quality European logistics real estate assets, diversified across five countries and 44 tenants, valued at €492.7 million. The portfolio consists of eleven mid-box logistics assets and five urban logistics warehouses:
- Ten of the 16 assets have been constructed in 2018 or later, ensuring predictable capital expenditure requirements and a future-fit portfolio positioned to capture the long-term growth forecast across the sector;
- The Portfolio is diversified across the Netherlands, France, Germany, Spain and Poland, mitigating country specific risks while leaving a significant investment universe from which to select portfolio additions. Other European geographies remain under active consideration;
- A highly diversified tenant base, with 44 tenants spread across a wide range of sectors, with a strong focus on third party logistics providers and food related logistics. Inflation-linked income through annual CPI/ILAT indexation in lease agreements;
- Delivered a total shareholder return of 45.9 per cent. since IPO in December 2017¹ and 18.5 per cent. in the 12 months to 30 June 2021. Net Asset Value total return of 14.7 per cent. (in Euro terms) in the 12 months to 30 June 2021;
- An attractive 5.64 euro cents dividend for the most recent financial year, with a first and second interim dividend in respect of the year ending 31 December 2021 paid in line with expectations
- Aberdeen Standard Investments is one of the largest real estate investors in Europe, managing €45 billion of real estate, including €17 billion of logistics assets. ASI has over 225 real estate investment professionals and transaction managers, across eight European offices. This local knowledge and feet on the ground continues to provide the Company with an active source of on and off-market acquisition opportunities;
- A strong focus on sustainability, demonstrated by the Company’s four out of five star GRESB rating for 2020. Rooftop solar is now installed on nine of the portfolio’s 16 assets, generating on-site renewable energy;
- Competitive investment management fee of 0.75 per cent. of the Net Asset Value up to €1.25 billion and 0.60 per cent. thereafter.
The Investment Manager has acquired two newly built logistics warehouses since the start of 2021, for a combined value of €46.8m, including a mid-box warehouse located on the Bosch-Siemens campus in Lodz, Poland for €28m and a newly built urban logistics warehouse in Barcelona.
The manager is actively exploring a number of expansion opportunities for portfolio assets on adjoining or adjacent plots, on a pre-let basis, likely in collaboration with neighbouring landlords or landowners. While these discussions are at an early-stage, a number of the Company’s tenants have experienced significant growth over the past 18 months, presenting the company with the opportunity to provide additional space at an attractive yield on cost.
The manager expects to have substantially deployed the net proceeds from the Initial Issue within three to six months of admission.
The Issue
Under the Placing, the Open Offer, the Offer for Subscription and the Intermediaries Offer, the Company is seeking to issue up to approximately 68.8 million new Ordinary Shares at an issue price of 109 pence per new Ordinary Share. The Issue Price of 109 pence represents a premium of approximately 2.7 per cent. to the Net Asset Value per Ordinary Share of 106.1 pence as at 30 June 2021 and a discount of approximately 8.4 per cent. to the closing price of 119 pence per Ordinary Share on 7 September 2021, the latest practicable date prior to this announcement.
The Directors have reserved the right, in consultation with Investec and the Investment Manager, to increase the size of the Issue in the event that overall demand for the new Ordinary Shares exceeds the target size and the Investment Manager believes that additional funds are capable of being deployed in a timely manner. The maximum amount to be raised under the Issue will not exceed £100 million.
Each of the Directors have confirmed that they intend to subscribe for new Ordinary Shares under the Issue, on the following basis: Tony Roper 20,000 new Ordinary Shares, Caroline Gulliver 12,500 new Ordinary Shares, John Heawood 10,000 new Ordinary Shares and Diane Wilde 15,000 new Ordinary Shares.
The Open Offer
Under the Open Offer, up to an aggregate amount of approximately 65.7 million new Ordinary Shares will be made available to Qualifying Shareholders at the Issue Price pro rata to their holdings of Existing Ordinary Shares, on the terms and subject to the conditions of the Open Offer, on the basis of:
1 new Ordinary Share for every 4 Existing Ordinary Shares held at the Record Date (expected to be as at the close of business on 6 September 2021).
The balance of the new Ordinary Shares to be made available under the Issue, together with any new Ordinary Shares not taken up pursuant to the Open Offer, will be made available under the Excess Application Facility, the Placing, the Offer for Subscription and/or the Intermediaries Offer at the absolute discretion of the Company, in consultation with Investec.
The latest time and date for acceptance and payment in full in respect of the Open Offer is expected to be 11.00 a.m. on 28 September 2021. Valid applications under the Open Offer will be satisfied in full up to applicants’ Open Offer Entitlements. Qualifying Shareholders are also being offered the opportunity to subscribe for new Ordinary Shares in excess of their Basic Entitlements under the Excess Application Facility. Investec has agreed to use reasonable endeavours to procure investors for new Ordinary Shares under the Placing, at the Issue Price. The Placing is not underwritten.
The Placing is expected to close at 11.00 a.m. on 29 September 2021 (or such later date as the Company and Investec may agree).
The Offer for Subscription
The Offer for Subscription is being made in the UK only but, subject to applicable law, the Company may allot and issue new Ordinary Shares on a private placement basis to applicants in other jurisdictions. The latest time and date for receipt of completed Offer for Subscription Application Forms is expected to be 11.00 a.m. on 28 September 2021.
Applications under the Offer for Subscription must be made using the Offer for Subscription Application Form and must be for a minimum of 1,000 new Ordinary Shares, although the Board may accept applications below the minimum amounts stated above in their absolute discretion.
The Intermediaries Offer
In connection with the Offer for Subscription, Investec will appoint certain Intermediaries to market the Ordinary Shares to potential retail investors in the United Kingdom. Each Intermediary will submit a single Application Form pursuant to the Offer for Subscription in its own name, as nominee, for the aggregate number of Ordinary Shares procured by it via subscriptions from underlying retail investors.
Applications for Admission
Applications will be made to the Financial Conduct Authority and to the London Stock Exchange plc for the new Ordinary Shares to be issued pursuant to the Issue to be admitted to the premium segment of the Official List and to trading on the Main Market. It is expected that Initial Admission will become effective, and that dealings will commence in respect of the new Ordinary Shares, at 8.00 a.m. on 1 October 2021.
The Share Issuance Programme
The Company also intends to put in place a Share Issuance Programme with the flexibility to issue up to a further 250 million Ordinary Shares and/or C Shares in aggregate.
The Share Issuance Programme will be flexible and may have a number of closing dates in order to provide the Company with the ability to issue Shares on appropriate occasions over a period of time. The Share Issuance Programme is intended to satisfy market demand for the Shares and to raise further money for investment in accordance with the Company’s investment policy. The Share Issuance Programme is designed to give the Board the flexibility to include pre-emptive elements in any future issue.
General Meeting
The Issue and the Share Issuance Programme are conditional on Shareholders approving the Resolution to be put to the General Meeting, which is expected to be convened for 11.00 a.m. on 30 September 2021. The Notice convening the General Meeting will be set out in the Circular.
ASLI : Aberdeen Standard European Logistics announces launch of issue