Abrdn European Logistics... Share Discussion Threads

[hpcg] 17/6/2020 13:37

Well liked by the looks of it. I don't know if this is still index buying, I thought that sort of thing was widely anticipated. Anyway, it is still on my radar if sentiment takes it back below NAV.

[gateside] 12/6/2020 12:54

Well timed sell!

[redponza] 12/6/2020 01:58

Can definitely buyback lower now?

[hpcg] 11/6/2020 21:12

Having made that comment yesterday I sold both today. ASLI because it is at a premium and has had what looks like an index related bump up, and EBOX because ASLI looks better. Ideally I'll be able to buy back lower.

[hpcg] 09/6/2020 16:47

Good to see it is now in the EPRA index, and quite possibly what has been driving recent strength. It seems to have had a better pandemic than EBOX, having spent most of the time since they listed somewhat under-performing.

[masurenguy] 04/6/2020 10:13

Aberdeen Standard Eur Lgstc Inc PLC

02 June 2020

Resilient to covid-19

The logistics sector, in which Aberdeen Standard European Logistics Income (ASLI) invests, would appear to be one of the few property sectors that could see occupier demand increase in the long term as a result of the coronavirus pandemic. With some form of a lockdown enforced in most European countries, there has been a spike in ecommerce orders. A whole new group of people have been introduced to online retailing, which is expected to speed up penetration rates across Europe and reinforce long-term systemic changes in the logistics sector.

Full research:

[redponza] 29/5/2020 11:12

One potential problem with this trust is the currency discrepancy in trading currency GBP in the stock exchange and the underlying revenue in EUR

[speedsgh] 26/5/2020 10:40

Net Asset Value as at 31 March 2020 and Dividend Declaration -

· NAV per Ordinary share of 112.7c (GBp - 99.92p) as at 31 March 2020 (31 December 2019: 111.0c (GBp - 94.21p)). Exchange rate £1 : €1.13 (31 December 2019: £1 : €1.18).

· Portfolio capital value has increased by 0.7% since 31 December 2019 (on a like-for-like basis including capital expenditure). The Company's well located and diversified European logistics portfolio of 14 assets was valued at €404.9 million as at 31 March 2020.

· A fourth interim distribution of 1.27 pence (equivalent to 1.41 euro cents) per Ordinary share in respect of the year ended 31 December 2019 was paid on 27 March 2020.

· First interim distribution of 1.41 euro cents (equivalent to 1.24 pence) per Ordinary share in respect of the year ending 31 December 2020 declared.

At the valuation date of 31 March 2020 Europe was in the early stages of lockdown due to COVID-19 and the investment market had come to a near standstill. There was a lack of relevant transactional evidence and so, in line with market practice, the independent valuers report from CBRE has noted "material uncertainty" relating to property valuations.

... Q2 Rental Collection Update

At the time of the last COVID-19 update, the Company announced that all rents had been collected for Q1 2020 and 67% of those due for Q2 had then been received, with twelve tenants requesting discussions around their short term financial positions. This collection figure has now increased to 75% with an expectation that this will shortly rise to 82%.

Of the remaining 18% currently unpaid, representing approximately €1 million in monthly and quarterly rental payments, it has been agreed in principle that approximately €820,000 of this will be deferred, with €720,000 of this deferred rent due for payment by December 2020 and €100,000 of this due prior to June 2022.

The remaining €180,000 of unpaid rent relates to six tenants who have requested rent free periods. It is expected that this rent will be forgiven for Q2, along with an additional €210,000 for the remainder of 2020 and €130,000 in respect of 2021/22, in exchange for material lease extensions. The manager is in the final stages of negotiations with these tenants and lease extensions are expected to be agreed for up to five years.

As a result, the Company currently expects that it will collect approximately 95% of Q2 rental income by December 2020, with an additional 2% payable in the period to June 2022 and the remaining 3% forgiven, in exchange for material lease extensions. The Investment Manager considers this to be a positive result for shareholders and expects to conclude all of these discussions shortly.

Dividends

Following a thorough review of the latest rent collection statistics and the recent tenant discussions, the Board has today declared a first interim dividend in respect of the year ending 31 December 2020 of 1.41 euro cents per Ordinary share (equivalent to 1.24 pence). This will be paid in sterling on 26 June 2020 to Ordinary shareholders on the register on 5 June 2020 (ex-dividend date of 4 June 2020). Of this first interim dividend declared of 1.24 pence per Ordinary share, 1.05 pence is declared as dividend income with 0.19 pence treated as qualifying interest income.

The Board, through the Investment Manager, continues to monitor the situation and the impact this is having on all of our tenants. While it remains the Board's intention to pay quarterly interim dividends in line with the dividend policy, the quantum of these distributions will ultimately depend on the ability of our tenants to maintain rental payments in line with the expected agreed terms. The Board views these terms to be favourable to both shareholders and the impacted tenants, while permitting the Company to maintain quarterly dividend payments in line with policy.

[speedsgh] 21/5/2020 11:30

#ASLI #BBOX #EBOX

Bargain trusts and big yields -

In his latest weekly column, Ian Cowie finds high-yielding bargains exposed to the biggest and most long-lasting of all the consequences of the coronavirus crisis.

[speedsgh] 28/4/2020 08:47

Q1 2020 rents collected in full. Currently collected 67% of rents in respect of Q2. Negotiations ongoing with some tenants experiencing short-term financial difficulties; significant proportion of tenants (those in food, pharmaceuticals and delivery sectors) continue to see high demand for their goods/services.

Dividend under review. Possible longer term positives as the manager predicts that the crisis may lead to an acceleration of adoption of e-commerce on the continent and increased demand for logistics warehousing in an already constrained market...

Portfolio Update -

Financial Position

In line with the Company's gearing policy, the Company's loan-to-value as at 31 March 2020 is approximately 35%, with an overall average fixed interest rate of 1.36%. Across the Company's six debt facilities, the weighted average debt maturity is 6.5 years, with the first refinancing date occurring in 2025. The Company maintains significant headroom on both its interest coverage and loan-to-value debt covenants. Interest coverage covenants range from 250% to 300% and rental income would therefore have to fall by 69% on average before a breach of covenant would occur. Loan-to-value covenants range from 45% to 65% and asset valuations would have to fall by 21% on average before a soft covenant breach would occur and 31% on average before breaching a hard covenant. The Company continues to maintain an open dialogue with its banks.

Dividends

The Board is acutely aware of the importance of quarterly dividends to shareholders and on 27 March 2020, the fourth 2019 quarterly dividend of 1.27p was paid in full to shareholders. As detailed above, the Company remains in a favourable position with a number of underlying tenants experiencing unprecedented trading demand. Despite 100% rent collection for Q1 2020, it is clear that a number of our tenants will continue to experience some trading difficulties at least in the short to medium term. The Board will continue to monitor rent collection closely and the evolution of COVID-19 and its impact on the Company's tenants. While the Board remains committed to the payment of quarterly dividends, the level of these payments over the short-term will remain under review as the Company finalises its negotiations with the tenants who have sought assistance for their short term financial challenges. The Company expects to conclude these negotiations in the coming weeks and will provide more specific dividend guidance at that time.

Outlook

Notwithstanding the COVID-19 pandemic which has impacted the world greatly during the initial phases of government imposed lock downs, the Board and the Investment Manager believe that the European market will continue to offer attractive opportunities as the logistics segment grows. There will clearly be a period of time where many businesses will be severely impacted through the effective halting of trade and the shutdown of economies as governments attempt to tackle the pandemic. During this difficult period, however, we see that businesses involved in essential services and supplies like food production and supply, pharmaceuticals and parcel deliveries to homes and businesses are faring well and are often requiring additional logistics facilities or space. This crisis will likely see businesses speeding up their adoption of e-commerce use with a resultant increase in take-up of warehouse capacity. We believe that the size segment that we are invested into is the most attractive and liquid part of the logistics sector with the urbanisation trend across Europe driving demand and growth.

With previously close to 10% of retail sales on average in the EU resulting from online transactions and with a double digit growth rate, the economic pressures on the demand side of the logistics sector prior to the crisis were evident, particularly on urban freight infrastructure.

Despite what will no doubt be some short-term headwinds, we expect the current environment to accelerate this demand led growth and this gives confidence that we are well positioned in an expanding area of the real estate market.

[masurenguy] 05/3/2020 08:16

Quarterly XD date today @1.27p.

[masurenguy] 28/2/2020 13:37

Took a modest initial position @84.2p this morning.

[cwa1] 28/2/2020 07:18

From this morning's update:-

Evert Castelein, Aberdeen Standard Investments, commented:

"It is particularly pleasing to see the strong uplift in the portfolio valuation over the final quarter of 2019. This 4% quarterly valuation increase illustrates the continued supply demand imbalance for quality real estate within key European logistics hubs and highlights the level of investor demand within this growing sector. While largely driven by a contraction in yields, an increase in market rents, particularly in Germany, was also a key driver in this portfolio valuation uplift. Our strategy has been to focus on what we believe to be the most liquid part of the market, with warehouse sizes up to around 40,000 square metres, where we see the best dynamics in terms of leasing transactions and tenant availability. The portfolio is now well-diversified with 14 investments located across five countries in Europe. Coupled with a strong covenant tenant base and an all-in average fixed cost of debt of approximately 1.3%, I believe we have built a robust inflation linked income stream, with potential for further capital appreciation. In addition, our local teams remain focussed on adding value to our portfolio through active asset management initiatives.

Subsequent to the quarter end, I was very pleased to complete the acquisition of the newly built Den Hoorn asset and following this acquisition, alongside the Madrid and Warsaw assets acquired in Q4, all funds raised in July 2019 have now been fully deployed. Notably, all acquisitions made since this fundraise, have been for assets with an urban logistics angle. As the proportion of online European retail sales continues to rise, these smaller sized, urban focused logistics assets are expected to become increasingly valuable. Our team of transaction managers, based locally in key logistics markets throughout Europe, continue to source a strong pipeline of interesting investment opportunities, particularly in this urban logistics space".

[belgraviaboy] 27/2/2020 13:59

First lot bought just under 83p

[speedsgh] 26/2/2020 16:08

Unaudited quarterly NAV as at 30/9/2019 was EUR 1.07 which translated into 94.95p (presumably using the official x-rate on the same date).

EUR 1.07 is today worth just 90.01p which may partly explain some of the ongoing share price weakness.

Of course other factors (Coronavirus/Eurozone economy fears) will also be at play but x-rate movements add another layer of risk here.

[lord mandelbaum] 21/1/2020 12:44

Establishing a position is ASLI.

It's European focused so not getting "our" bounce but since the sector is re-rating it looks a juicy prospect at current levels.

Chart suggests it'll move in an orderly fashion like its sector bedfellows

[speedsgh] 02/1/2020 16:15

Acquisition of New Warehouse in Spain (30/12/19) -

The Company is pleased to announce that it has acquired an urban located cross-dock logistics warehouse in Coslada, Madrid, for a value of €9.2 million, providing a net initial yield of 5.0%.

The asset is located in Coslada, to the east of Madrid. This is one of the best locations for last-mile logistics in Spain due to its 15kms proximity to the city centre and 1km distance from Barajas airport together with the population size of the Madrid metropolitan area of over 6 million which this building may serve. Urban logistics units are typically smaller in size, reflected in the building size of 6,785 square metres which includes 1,892 square metres of office space. As a cross-dock warehouse, the building has loading bays/doors on both sides of the building, 37 in total. This is ideal for city distribution with lorries bringing in goods at the front end of the building and smaller delivery vans on the opposite side being loaded for onward transmission. With a free height of 10.5 metres it also provides ample space for temporary storage with part of the building being used as cooled storage.

The warehouse has an attractive income profile and is fully leased to DHL Freight Spain S.L.U. on a recently renewed ten year CPI indexed lease. DHL is a strong tenant being one of the largest logistics operators in the world and has operated in this area for 20 years.

Evert Castelein, the Company's Fund Manager, commented:
"I am extremely pleased that we have been able to source this off-market deal, again emphasising the benefit of having our own locally based transaction managers in many of the countries where we invest.

Madrid has a substantial and important logistics market and we see strong growth in the provision of modern logistics stock in the outer limits of the city. However, the highly constrained nature of the Coslada submarket and its strategic importance in connecting the city with the airport and routes through to the east of the country, supports the long term relevance of this asset in the supply chain. The strong growth of e-commerce in Spain reinforces the importance of last-mile logistics hubs such as Coslada. This asset therefore carries many of the attractive performance characteristics we have been targeting from the outset of the fund and we are delighted to be able to bring it into the portfolio.

This latest freehold property purchase will bring the portfolio to fourteen assets in total diversified across five countries with a value of €387.3 million (footnote 1)."

1 Value using Q3 2019 announced total property portfolio value of €300.7 million plus purchase prices as announced for Warsaw (€27.5m), Den Hoorn (€49.9m) and Madrid (€9.2m).

[cwa1] 17/12/2019 15:06

Taken a bit of a punt here at 91p. Hoping it will be a reasonable yielder in a solid , possibly upcoming, business area, with some hope of potential asset improvement. Fingers crossed and good fortune to all holders.

[speedsgh] 16/12/2019 14:15

Acquisition of New Warehouse in The Netherlands -

[gopher] 26/11/2019 20:25

I am in at 93.60

The portfolio is now fully invested and the shares look reasonable value with a good running yield at 5.5%

I am looking for the dividend and NAV to slowly increase.

Trust seems good comparative value at a discount with a decent story to tell, early days in its life

[speedsgh] 14/11/2019 10:12

Robust growth maintained in Europe’s commercial real estate markets -

.... The logistics sector continues to benefit from strong occupational and investor demand. Prime rents grew a further 0.5% over the quarter to an annualised 2.8%. The Nordics (+1.4% q/q), Germany (+1.2% q/q) and Semi-core markets (+1.0% q/q) were the main drivers of growth.

Logistics also registered the strongest yield compression for the 12th quarter in a row, with the average prime European yield 6bps lower at 5.59%. The drop was driven by a sharper inward movement across France (-25bps to 4.27%) and Germany (-22bps to 3.9%). It is now the first time prime logistics yields have dipped below the 4% barrier, falling to 3.9% in key German cities, including Berlin, Frankfurt and Hamburg. A combination of strong demand, further modest rental growth and the continued low interest rate environment will help maintain the relative attractiveness of this sector with yields set to remain below 4% in the near term...

[speedsgh] 09/10/2019 10:42

Update research from QuotedData -

On the crest of a wave

Aberdeen Standard European Logistics Income (ASLI) has assembled a property portfolio that is primed to cash in on the fundamental shift in consumer spending to online retail. The European logistics market is set to follow in the footsteps of the UK market, which has witnessed a surge in demand from occupiers wrestling for more efficient supply chains as online sales grow.

Full research:

[speedsgh] 03/10/2019 12:15

PURCHASE AGREEMENT SIGNED FOR THE ACQUISITION OF A NEW WAREHOUSE IN WARSAW FOR €27.5 MILLION -

The Board is pleased to announce that the Company has exchanged contracts to acquire a newly built fully income producing logistics warehouse in Warsaw, Poland, for a purchase price of €27.5 million providing a net initial yield of 5.64%. The agreement is with developer Panattoni Development Europe and Marvipol Logistics, which are specialised developers of logistics projects. Contracts were exchanged after a lengthy due diligence process and after construction of the site was completed. Completion of the acquisition is currently scheduled for later in the month and will, once completed, represent the deployment of over half of the amount raised under the fundraising that took place in July...

...Outlook - future acquisitions and gearing

This acquisition brings the Company's portfolio to twelve quality logistics assets spread across five European countries and occupied by tenants with long indexed leases. Our intention remains to deploy all the capital raised in July as quickly as possible, but without compromising the focus on asset selection, price and tenant quality in building the portfolio. The Investment Manager is currently in advanced due diligence on another new warehouse in the Netherlands which would, if successful, mean that all the funds raised in July would be fully deployed and that gearing would be close to the target level of 35% by the end of the calendar year.

The Board and the Investment Manager continue to believe that the European market offers attractive opportunities because the logistics market is both sizeable and growing. The sector continues to benefit from the rapid take-up of logistics facilities, largely helped by the growth in e-commerce, and the long inflation-linked leases that quality tenants are prepared to sign up to in many parts of Europe. As we have previously stated, it is this strategy which is focused on investments on the Continent with attractive pricing, indexation of leases as standard and lower financing costs that underpins our investment policy.

[speedsgh] 25/9/2019 08:00

from HALF YEARLY REPORT...

INVESTMENT MANAGER'S REVIEW (cont'd)

ESG a key driver for future performance

... During H1 2019 the Investment Manager explored various options to build on ESG across the portfolio and has identified several well defined projects to execute during 2019 and beyond. A current focus is investigating the leasing of warehouse roofs to solar energy investors and/ or installing solar photovoltaic cells on properties in the portfolio. We currently have one such agreement in place at the asset in Avignon where the roof is leased to Larcos for €160,000 per annum on a 20 year term. We are in the final stages of negotiating lease agreements in Ede and 's Heerenberg, both on 17 year terms, and have applied for government subsidies in Oss and Zeewolde.

An experienced consultant is advising us with the implementation of solar panels on the assets outside of the Netherlands...

Capital growth reflected in higher valuations

In the first half of 2019, property values have increased by 2.8% to €272.7 million. This is based on 30 June 2019 valuations and purchase prices excluding acquisition costs for new investments made in the period. The capital growth is mainly driven by an inward yield movement.

Capital appreciation will also be triggered through annual indexation of rents and market rental growth supported by strong demand for logistics assets, a lack of supply and increasing construction costs for new developments.

Pipeline

The additional equity capital raised in July will enable us to acquire two brand-new warehouses in the Netherlands and Poland where we have strong ties through our dedicated ASI transaction managers. Both warehouses have a strong urban location, with the Polish one as a prime example of urban logistics, being very close to the city centre. The additional diversification these deals will bring will benefit the portfolio and further diversify the tenant base. More information will be released following due diligence once the assets are acquired.

Outlook

As an investment, the logistics sector remains a very compelling asset class thanks to strong market fundamentals especially in the most liquid part of the market that the Company has invested in. We believe growth in the sector is structural in nature, and not cyclical, with the rise of e-commerce as a key driver. Strong demand from investors and the lack of modern facilities for logistics companies should support property values and capital growth, not only through keener yields but also with the prospect of increasing rents.

We believe the current portfolio is in a very good position to deliver its target returns. Property quality is high, with six newly built warehouses in the portfolio, all with long indexed leases to financially strong counterparties. With our local asset managers we are strongly focussed on keeping our tenants satisfied and the buildings in good shape. Also, we seek to add additional value through active asset management with an ever stronger focus on ESG.

[speedsgh] 25/9/2019 07:58

from HALF YEARLY REPORT (cont'd)...

INVESTMENT MANAGER'S REVIEW

... Logistics sector benefiting from strong fundamentals

The demand for logistics investment in Europe remains strong, with investment activity at high levels and with capital values recording strong growth in most markets. Some of this appreciation in value is driven by higher investment demand and lower required rates of return sought by investors, but we are also seeing increasing market rents as a driver in many markets. The capitalisation of higher rental levels is expected to become an additional source of value growth over the next few years, particularly in the urban logistics segment and in key logistics areas where land supply constraints are limiting new developments.

We believe that many of the key drivers behind the demand for logistics space in Europe remain strong and are likely to be long-term and structural in nature rather than simply linked to the economic cycle. Despite the more recent benign levels of economic output, the structural shifts in consumption patterns and overall demand drivers are likely to remain supportive, while construction levels remain relatively low.

While the overall outlook for logistics is positive, we believe there will be a growing differentiation between different types of logistics property. Our research suggests that both the location and the efficiency of the asset are becoming increasingly important, and that tenants are increasingly focused on the environmental impact of their logistics operations. These are important criteria to be considered when building a real estate portfolio that will benefit from this strong fundamental demand for logistics in Europe.

Well-diversified property portfolio with modern specifications

... We consider ourselves to be long-term investors and seek to hold the warehouses in the portfolio for a long period of time in order to keep transaction costs low. The average lease length of the portfolio (including 's Heerenberg) is 9.1 years including breaks and 10.2 years excluding breaks all with indexed leases with strong covenant tenants. This puts us in a good position regarding both income generation and capital growth.

Income boosted by low financing costs

Monetary easing has created very attractive financing conditions, especially on the Continent. All-in interest rate costs for the portfolio, once all loans are drawn, will be approximately 1.4% with an average duration of 7 years. The recent addition in 's Heerenberg, which closed in July, has seen the best rate achieved to date, at 0.94% per annum over a six year term. Interest fixing for the loan facility in Oss will take place at drawdown, most likely in October, and will be added to the existing portfolio financing for Ede and Waddinxveen. The debt strategy of the Company is to finance properties in the countries where financing costs are lowest such as the Netherlands, France and Germany and to diversify loan maturities as much as possible. The target LTV for portfolio structural gearing remains at or around 35% and this is the level the Manager expects to achieve with the conclusion of the loan facilities for 's Heerenberg and Oss.

An additional credit line of GBP 6 million is in place at the Company level, financed by Sociéte Generale, to fund working capital requirements. Together with a group of banks, the Investment Manager is currently investigating the implementation of a larger revolving credit facility in order to provide more flexibility to fund additional purchases or provide funding guarantees.