abrdn European Logistics Income (ASLI) has acquired two logistics warehouses – in Dijon, France, and Horst, the Netherlands – for a total of €21.4m.
Constructed in 2004 and refurbished in 2021, the 5,069 sqm Dijon property was acquired for €9.3m, reflecting a net initial yield of 4.2%. The building is leased to Dachser Intelligent Logistics, the German-owned global third party logistics provider founded in 1930, operating as Dachser France, on a 10 year term. The lease benefits from annual French ILAT indexation, offering attractive long term income.
The asset sits on a total plot size of 27,000 sqm, providing opportunities for future expansion. This is the fund’s third recent acquisition in France, following the purchase of two other Dachser-let properties last month.
The Horst property totals 6,900 sqm, including office space, and has been acquired for €12.1m as part of a sale and leaseback deal with Limax, a producer, packager and distributor of soft fruits and mushrooms. Serving as its headquarters, the tenant-critical asset with cold storage lies between Venlo and Venray, an area which is well known for its agrofood and agricultural businesses. It is considered the gateway to the European hinterland, close to barge and rail terminals and the A73 to Nijmegen and A67 to Antwerp/ Duisburg.
The property, which covers a total land plot of 40,500 sqm, provides ample scope for future extensions and benefits from a 10 year lease term subject to annual CPI capped indexation, with the price reflecting a net initial yield of 3.8%. It features rooftop solar panels which enhance the portfolio’s sustainability credentials, in line with the company’s strategy.
Loan to value
These purchases have been financed through cash reserves and expected additional asset level debt drawn with ING bank at 3.05% for a shorter three year term. This puts the company’s asset level fixed debt at €261.6m, with the loan to value (LTV) ratio using 30 June 2022 valuations at 31%. The average cost of debt across the portfolio is now 1.98%. In addition, the company is finalising special purpose vehicle (SPV) financings, and while this in progress the company will draw €25m against its short term revolving credit facility leaving the total debt LTV ratio at 32.9% until repayment, following which it will fall back to 31% (well within the company’s target asset level LTV of 35%).
Evert Castelein, fund manager for ASLI, said: “These assets fit with our strict investment criteria, being excellently located with direct access to major routes and standing on large plots allowing for future expansion. The portfolio now totals 28 properties across five countries, adding further diversity to our strategy.
“Longer term leases with CPI indexation and our quality diversified asset base across Continental Europe continues to underpin the company’s strategy and should deliver shareholder value with our increasing tilt towards urban locations close to major population centres.”
ASLI : abrdn European Logistics Income buys in France and Netherlands