Abrdn European Logistics Income (ASLI) has launched a placing under its share issuance programme to fund its near-term €142m pipeline of investments.
The group, which has recently deployed the £125m it raised in September 2021 on the acquisition of a logistics portfolio in Madrid, said the placing price will be 110 pence per share, a discount of 1.8% to last night’s closing price of 112 pence and a premium of 4.0% to its 30 September 2021 sterling net asset value per share of 105.8 pence.
The proceeds of the placing are intended to be spent on the acquisition of four assets located in the Netherlands and France, which the investment manager is in exclusive negotiations on, for an aggregate value of around €49m. The four assets are a mix of urban logistics and mid-box distribution properties, with three located in France, on long-term leases with a French national third-party logistics provider, and one in the Netherlands let to a food focused operator.
The proceeds will also be used to fund the development of phase four of Madrid portfolio acquisition, which is due in the second quarter of this year. This comprises a last-mile warehouse and delivery van parking station let to Amazon for a period of 25 years.
Additionally in the second quarter, ASLI will fund a 2,900 sqm extension to the Waddinxveen asset in the Netherlands on a pre-let basis to the current tenant, Combilo. The aggregate funding requirement for these two assets is around €78m.
The group will also look to pay down €15.5m on its revolving credit facility, which was drawn to part fund the acquisition of the Madrid portfolio. In total, the company said this near-term funding requirement totals around €142m.
ASLI’s portfolio comprises 24 European logistics assets, diversified across five countries and valued at €746m. The portfolio comprises 13 urban logistics warehouses and 11 mid-box logistics warehouses, with 18 of the company’s 24 assets constructed since 2018.
The tenant base is diversified across 50 tenants, consisting predominantly of third-party logistics providers, e-commerce and grocery-focused vendors. Following the completion of phase four of the Madrid portfolio in Q2 2022, Amazon is due to become the company’s largest tenant by rental income (10%). Around two-thirds of the company’s rental income is subject to uncapped annual CPI/ILAT inflation linkage, with a further 28% subject to capped inflation linkage and the remainder subject to threshold inflation linkage.
The portfolio has a high sustainability rating (four out of five stars awarded for 2021 by GRESB), with rooftop solar PV systems installed on 10 of the portfolio assets, with active discussions underway to increase this number.
The group estimates that its net asset value has increased by around 1.5% over the three months to 31 December 2021, following an independent portfolio valuation.
The placing is expected to close on 1 February 2022, with shares expected to commence trading on 4 February. Investors in the placing will be entitled to receive the company’s fourth interim dividend in respect of the three months to 31 December 2021, which is expected to be declared in February 2022.
Private investors can subscribe for new shares via PrimaryBid.
Tony Roper, chairman, said: “The Investment Manager’s swift deployment of September’s equity raise into the Amazon-anchored, last-mile logistics portfolio in Madrid again proved its origination and execution capabilities and was a significant development for the company. This is a high-quality, newly-constructed portfolio in a fast growing and dominant submarket, which further adds to the Company’s sector-leading sustainability credentials.
“The company’s modern portfolio of 24 urban and mid-box logistics assets offers a compelling investment proposition, with strong inflation-linked income. The Investment Manager’s Europe-wide presence and local knowledge continues to provide the company with a pipeline of attractive investment opportunities and we look forward to the additional scale and diversification benefits which this placing will afford.”
Evert Castelein, abrdn Investment Manager, added: “2021 was a standout year for European logistics real estate with record levels of take-up across the first nine months of the year. Over the same period, investment volumes were up 64% year-on-year and were double the five-year Q1-Q3 average, with vacancy rates remaining at record lows. Near term supply chain issues coupled with structural consumer behaviour shifts will continue to drive demand and with Continental Europe lagging the UK in terms of e-commerce penetration, it provides an excellent backdrop for further demand growth.
“In 2021, we deployed €274m of capital into 10 high-quality logistics assets, nine of which were last-mile logistics warehouses, the sub sector which we believe offers the strongest rental growth potential. This Placing will help fund the next stage of the Company’s growth and we are confident of providing shareholders with the continued strong performance achieved to date”.
ASLI : ASLI announces placing to fund €142m near-term pipeline