Abrdn European Logistics... Share Discussion Threads

[essentialinvestor] 23/5/2024 15:35

Simon, API looks a better bet to me fwiw. I'm not dismissing ASLI in saying that.

[simon gordon] 23/5/2024 15:29

Flagged up on Citywire on Tuesday....

Abrdn European Logistics to wind down after dismissing 11 low-ball offers

Abrdn European Logistics Income (ASLI) is to wind down after failing to strike a deal with one of the ‘significant number’ of parties that showed interest in the real estate investment trust (Reit).

After a six-month strategic review born from frustration at the wide discount on the share price, the board of the £251m portfolio of warehouses and distribution depots has concluded that a managed disposal process and return of capital is in the best interests of shareholders.

Chair Tony Roper said the board had received 11 approaches proposing a range of options, including all-share mergers, plans to change the investment management team, recapitalisations and cash offers.

However, he said as all were priced at ‘material discounts’ to net asset value (NAV), none could compare with the shareholder value obtained from selling the trust’s assets over the next year.

In addition, he said the Reit’s current vacancy rate of 6.5% ‘provides the potential opportunity to capture the value associated with letting this vacant space ahead of a disposal’.

The board believes the majority of assets can be sold by the end of the second quarter of 2025 given the fund has ‘completed a substantial amount of preparatory work’ on the 25 urban and mid-box logistics assets to enable swifter sales.

A significant number of the interested parties that came forward when ASLI hoisted the ‘for sale’ sign were keen to acquire assets within certain geographies or individual assets rather than the whole portfolio.

The board said this provides ‘comfort as to the likely level of offer or interest in the managed wind-down process’ and predicted that the ‘pool of potential offerors is expected to be large’.

The news was not unexpected and the shares firmed 1% to 63p – 37% below their 2017 launch price and trading at about 22% under their estimated NAV of 81p on a 6% yield.

The macroeconomic backdrop that ASLI will be offloading assets into will also be more favourable, as drivers such as e-commerce and nearshoring continue, and lower interest rates in the second half of the year continue and will ‘support transaction volumes and pricing,’ Roper said.

Assuming shareholders approve the wind-down, the board will continue to pay dividends to maintain the investment trust status but the level of distributions will decline as the portfolio reduces in size and capital is returned to shareholders.

Deutsche Numis analyst Andrew Rees said transaction volumes had been subdued over the past 18 months but that the ‘industrial and logistics sector remains sought-after, particularly for urban, last-mile buildings, and therefore assuming the wind-down is approved by shareholders, we would expect the sales processes to yield swift outcomes for several assets’.

[hugepants] 23/5/2024 09:55

Divi announcement


The £/E exchange rate isn't helping the NAV although its probably offset by 5 months of accrued income.

[chopp1] 21/5/2024 21:56

Well some of us are Skyship, but not those who bought a few years ago. I’m sitting on a 30% loss

[giltedge1] 21/5/2024 18:00

Also to add save on the refinancing in 2025, insurance companues can slot ASLI properties into their existing infrastructure, mgt, legals, admin, dirs etc so save 2% a year. Their yield 8% vs current small retail investors 6%. Also most properties under 5 years old & great ESG scores.

[skyship] 21/5/2024 16:59

chopp1 - sorry, but a wholly naive comment.

Shareholders, you, me and many others, are being given the opportunity to sell our shares at close to NAV rather than to continue to hold at a 30% discount.

We can then reinvest for a better yield elsewhere in the sector.

[spectoacc] 21/5/2024 16:10

Sub-scale, substandard. Looking to sell into a rising market, not at the nadir.

Or look at it another way - where would the share price be if they did cut?

Added some more on this dip.

[chopp1] 21/5/2024 15:42

Why are the Directors so obsessed with the discount that they are making rash decisions which disadvantage shareholder value. Have a little patience, wait for interest and associated discount rates to fall, then NAV will start rising and the share price will follow.it is madness to rush into a fire sale which when all the costs are taken into account will just erode shareholder value. Just keep running as normal.They are generating reasonable realised profits which can provide a dividend albeit reduced while we wait for capital value to recover.

[spectoacc] 21/5/2024 10:36

"Clearly a total bid had to be at a good discount to both cover costs and provide a good turn for the buyer."


Except, if you buy the co you pay 0.5% stamp, and if you buy the properties you pay 5% stamp, all things being equal. Which they're not, particularly with European (what's the stamp there?), but no one was getting near NAV for the whole thing, just as they didn't with eg EPIC.

[giltedge1] 21/5/2024 09:55

Yes agree 78p capital + 3p divs next 12 - 15 months, about 20%, already buyers lined up. Board quite confident, by announcing qtly capital payments. I assume some of the big European Insurance companies are keen to add to there logistics portfolio, eying interest rate cuts. Not so good for myself as paid £0.78p, so only made dividend income. With wind ups in progress will help remainers, LMP at NAV for example.

[skyship] 21/5/2024 09:24

ASLI assets much in demand; as can be seen from the RNS.

Clearly a total bid had to be at a good discount to both cover costs and provide a good turn for the buyer.

However, many wanted just to cherry-pick certain assets; and the wind-down gives them the opportunity to do so.

The degree of demand suggessts the wind-down duration will be quite short; that in itself raises the GRY return.

I am working on a conservative basis; and will then be happy to see more upside.

My model is for 78p by 30th Sep'25. That gives a GRY of 17.0%pa from the current 63p.

I think it quite likely that the actual return will be nearer 20%.

[skyship] 21/5/2024 09:00

free stock charts from uk.advfn.com

[skyship] 21/5/2024 08:50

Those who reacted quickly yesterday got themselves a good deal. Now up at 63p bid.

[williamcooper104] 20/5/2024 21:35

Yep - a lot of the renewables have continuation votes coming up

[spectoacc] 20/5/2024 20:53

Agree API still best. Can't see ASLI getting much above NAV (if it was worth more, they'd have had bids nearer to NAV), but can see API getting some of their better stuff away at premia. There'll likely be a point to exit both after some of the capital returns.

Losing count of the number of trusts on the wind-up trail - rightly so, when so many fail to cover divi in a meaningful way, have no hope of growing, and in some cases serve as vehicles to enrich sponsors/managers.

[williamcooper104] 20/5/2024 20:49

It does - sounds like they've got bids for parts of the portfolio - so my guess is somewhere around 65-75% Ought to be a quicker realisation than GABI and possibly API API still sticks out as best value

[spectoacc] 20/5/2024 20:46

If they're out of "..The majority.." by Q3 2025 (ie end-Q2 2025), what constitutes the majority? That's the key question for me, 51% or 90% makes a huge difference to the return calc.

[williamcooper104] 20/5/2024 20:14

So we ought to get 17.5-20% returns But if we get half of our capital back within 12 months there's every chance we can put into something else high yielding The home run would be to get the sane capital into a couple of wind ups before markets properly recover

[williamcooper104] 20/5/2024 20:12

The divi is uncovered What I've been doing with these wind ups is adding the EPRA eps in as a divi for half the wind up period If all goes well the epra eps = roughly the disposal costs and you can simplify it to you'll get full NAV back over the average holding period Eg if say 18 months, then EPS for 9 months and NAV at 18 months (in reality you'll get some ealier and maybe some later but that'll be rounding in your IRR so can simplify) EPS ought to be a little higher as management costs should be cheaper - but need to see details

[catch007] 20/5/2024 18:43

SKYSHIP: The company stated it would continue paying decreasing dividends so per worth adding circa 4-6p in dividend income to your numbers over the wind down period

[skyship] 20/5/2024 15:57

The Annual Report shows Dec'23 EPRA NAV at c95.7, ie c82p.

So let's say they achieve 78p - IMO quite do-able into a recovering Market.

They're talking about a pretty rapid wind-down by Q2'25. For the sake of caution, let's look at a GRY to 30/09/25. That would deliver 18.35%pa.

Earlier pay-outs would increase that figure; but looks like a good place to start.

Welcome others' calculations.

[williamcooper104] 20/5/2024 13:44

Yep and looks like an 18-24 month average holding period of 12

[speedsgh] 20/5/2024 12:07

Seems a sensible conclusion to the review. Now need to ensure that the investment manager's fees during the wind down period are reasonable and aligned with the best interests of shareholders.