abrdn European Logistics Income has reported NAV total return in 2021 of 12.4%, as the European logistics sector continues to benefit from a supply-demand imbalance.
The group’s NAV increased 7.5% to €1.29 per share, while it paid out dividends in the year of 5.64 euro cents.
IFRS earnings were 15.4 euro cents per share for 2021 (2020: 14.8 euro cents). Earnings are set to be further boosted this year through the portfolio’s lease indexation profile. Around 70% of the portfolio’s leases are subject to annual uplifts linked to inflation, which has taken off in Europe and is expected to grow further this year.
The group has a low loan to value (LTV) ratio of 25.1%, with an all in cost of debt of 1.4%.
Operational highlights
- Portfolio valued at €661m (2020: €425m), reflecting yield compression and new acquisitions. On a like for like basis, the portfolio value increased by 9.1%.
- Acquired 10 warehouses during the year, totalling €274.1m, taking the total portfolio to 24 properties (including one currently under construction leased to Amazon), including the €227.3m acquisition of a newly constructed last-mile logistics warehouse portfolio in Madrid, a 31,500 sqm warehouse in Lodz, Poland, for €28.1m, and the €18.7m acquisition of a modern urban logistics warehouse in Barcelona, Spain.
- The portfolio’s weighted average unexpired lease term (WAULT) is 8 years (2020: 11 years).
- Group received 100% of rent due for the year.
Sustainability credentials
- GRESB (global real estate sustainability benchmark) score of 84/100, which compares to the 73/100 overall average 2021 GRESB score across the real estate sector.
- Long-term solar panel leases at the company’s Ede and Den Hoorn assets delivered a capital uplift of around €1m.
Tony Roper, chairman, said:
“2021 was a stand-out year for the company and for the wider European logistics real estate asset class. While the onset of the pandemic in early 2020 created significant uncertainty across all sectors, this ultimately led to an acceleration of the key structural drivers underpinning the logistics sector. Having been a first mover in the UK listed arena, making our initial investments in early 2018, the company continues to benefit from sector tailwinds, delivering a double-digit net asset value total return for the second year running. The company’s 2021 sector leading GRESB rating was a further endorsement of our strategy.”
Evert Castelein, lead fund manager, added:
“With more than half the portfolio by value now weighted to high growth urban logistics assets, following the milestone Madrid acquisition which deployed the proceeds of September’s capital raise within three months, the company is well positioned to deliver further shareholder value. The attractive indexation characteristics of the portfolio leases and competitive advantage afforded by abrdn’s extensive network of local real estate professionals across Europe further underpin the compelling investment case. 2021 was a record year for European logistics take up, with record low vacancy seen across a number of markets. We expect 2022 to continue in this vein, supporting favourable rental and capital growth.”
ASLI : abrdn European Logistics Income posts 12.4% NAV total return