Abrdn European Logistics... Share Discussion Threads

[giltedge1] 29/9/2022 09:37

Been travelling with work & didn't see carnage on Gilt Market. Yes ASLI is in a better position as follows Euro yield, a good 2% lower & seems safer at the moment, no debt renewals for 4 years & fixed at 1.66%, so in theory are gaining, debt gets marked down next quarter? & increasing NAV.
Price recovered yesterday as market realised not exposed. any UK Reit exposed to refinancing in next 12 months is obviously one to avoid as Gilts can go over 5%.

[spectoacc] 28/9/2022 16:52

All about BoE and the bailout/renewed QE. Does seem even the ASLI's & EBOX's are trading on the UK yield curve.

Tho some of it could simply be the margined-out and imminently insolvent pension funds having to sell anything they could to meet the margin calls on LDI's. QE ought to have put a stop to that.

Definitely didn't think ASLI deserved to be down today on those results (not that I bought any).

[cwa1] 28/9/2022 15:44

It's a funny old game, innit? Down to 70p early on...finishes up at 80 odd...

[giltedge1] 28/9/2022 10:46

German 10 Year bunds are 2% today, so I think our media is ramping up the reality, so i guess commercial property should be a 2% margin, which is where we are now. Noticed ASLI & other REITS ticking up, so selling stopped, other sectors turn?. Walked around Covent Garden, heaving with tourists, not one empty shop or to let board, I know a small part of commercial property, but on the ground not all gloom.

[spectoacc] 28/9/2022 10:30

Thanks, all valid points. So the main factor would seem to be valuations, what happens when a property bought at say 2% yield, becomes valued at a 4% yield.

[giltedge1] 28/9/2022 10:07

Earliest loan redemption is 3 years, so okay for a while inflation forecast to drop 2023 4 - 5% (2022 peak), so I expect inflation back to 2 - 3% in 2024 & then drop further. Interest expense will rise, but so will rents 3 years CPI at least, 20% by time loans refinanced, so cancel out, portfolio 100% let in the best sector. Europe interest rates tend to be lower than UK.

[williamcooper104] 28/9/2022 09:18

What we need to work out is covenants and dividend cover with much higher interest That's all that matters for now

[spectoacc] 28/9/2022 08:52

Have to agree on liquidity - been buying REITs on the way down and it's been a mistake.

I fear the world has changed. ZIRP is over. T-Bills - and UK interest rates - are going to reverse the property market. Anyone/thing with debt is facing a rude awakening.

ASLI looks dirt cheap, but so do all of them - SHED, SREI, UKCM... But are they, if ZIRP is over?

What happens to 25% LTV if the "V" drops 40% due to higher interest rates?

What happens to your banking covenants if that happens?

And a point on first post - "..Average term to maturity of 4 years" - I take it that means some debt needs rolling sooner, some later. That 1.66% may rise sooner than we're led to believe.

[giltedge1] 28/9/2022 08:45

No NAV went up in Euro's, gain on FX GBP/EURO, rents indexed linked & no refinancing. May have overpaid on last purchase Madrid, thought a bit toppy at the time. Last fund raising at £ 1.10 so not just retail investors, caught out big boys as well. My guess indiscriminate short selling, so hold our nerve & sit it out. Luckily I sold SREI & SHED at what is now a great price, but unfortunately reinvested half in ASLI,UKCM & PRS, so still have other half. So looking to add, but where is bottom?, these events take 6 months, so started in June, so looks like early December a turn around. Best to keep some liquidity & hoover up bargains.

[spectoacc] 28/9/2022 07:29

Um, those results didn't seem half bad to me?

"Loan to Value of 21.7% at 30 June 2022, rising to 25.7% with ING asset level loan. All in cost of debt 1.66%, with an average term to maturity of 4 years"

Obviously the outlook isn't great, and it's carnage out there amongst the REITs, but did that report deserve another -7%?

[giltedge1] 02/9/2022 14:54

Added some more at £0.97 was going to wait but Euro gaining & yielding over 5%. Index Linked so in theory revenue should rise by 10% in 12 months. Good Luck.

[giltedge1] 23/8/2022 08:42

Like to add more, great to have indexed linked rents, but share price falling, so will wait & see. I prefer USD/EUR investments at the moment GBP struggling & can only get worse.

[speedsgh] 10/8/2022 12:00

Waddinxveen Extension and Lease Signing -

abrdn European Logistics Income plc (the "Company" or "ASLI") announces that it has signed the purchase agreement for the acquisition of the recently completed warehouse extension at Waddinxveen, the Netherlands, for a total net purchase price of €4.9 million.

The Company exercised its right of refusal over this development located directly adjacent to the existing warehouse bought in 2018. This land, owned by and developed with our tenant Combilo, has provided an additional c. 2,400 sqm of cooled warehouse space and 157 sqm of office space. The extension will allow Combilo to service its growing client base, including a Swedish supermarket chain. The lease runs concurrent with the original, with over 11 years remaining, and will generate additional rent of c. €250,000 per annum, reflecting a yield of 5%. The extension complies with the latest energy neutrality standards in the Netherlands and includes 16 rooftop solar panels, resulting in an A+++ energy rating.

This asset management initiative is expected to be immediately value accretive and enhances the income producing qualities of this modern, well located asset.

In addition, the Company is pleased to announce that it has agreed a new 5 year lease with ADER at Unit 3, part of Phase II at its Gavilanes site, Madrid. ADER provides distribution services to companies in the freight and logistics sector and is consolidating its operations in the Gavilanes area with the leasing of this second, 7,375 sqm building. The annual contracted rent of almost €470,000 per annum is fully CPI indexed and in line with expectations.

Evert Castelein, Fund Manager for ASLI, commented: "Supporting our tenants as they expand is a key part of our strategy. This is another example of how flexibility and the option to extend buildings within our portfolio can create additional value over the medium term."

"The new lease with ADER not only improves the portfolio's income characteristics, but also underscores the desirability of the Gavilanes assets, which offer access to c. six million people across the wider Madrid area."

[alan pt] 14/6/2022 13:29

Back on a 10% discount now, not nearly as steep as the EBOX discount, but I do much prefer the ASLI mid box/last mile focus

[speedsgh] 08/6/2022 10:39

Interesting comment on the sector by Marcus Phayre-Mudge, the highly-rated fund manager of TR Property Investment Trust (TRY) in their recent results...

Industrial and Logistics

2021 was yet another record year in terms of take up, capital value growth and, all importantly, further shrinkage in the amount of vacancy. The UK market saw take up exceed 50 million sq ft and vacancy is now below 3% across the whole range of 'big box' unit sizes. Like for like rental growth for Segro's portfolio was in excess of 5% and this has driven yields nationwide 75-100 bps leading to huge capital growth. Yet urban logistics has been even hotter, with investors focused on the supply inelasticity of infill markets. Greater London prime industrial transactional evidence now regularly sees equivalent yields (i.e. based off market rents which are higher than passing rents) of less than 3%. This price inflation has been fuelled by evidence of another year

of rental growth exceeding 10%. Segro reported rental growth averaging 13.1% in its UK portfolio during 2021. Savills estimate that inner London rents have moved 25% in the last year alone.

UK industrial transaction volumes reached £16.7bn in 2021, 113% growth on 2020 and 152% growth on the five year average. Given such an acceleration we must closely watch the fundamentals, there may well be capital seeking deployment without due consideration. However, for now, the demand/supply imbalance at the occupier level is driving rental growth. The entire UK industrial market recorded a drop in available space to 18.1million sq ft, a contraction of one third over the year. No wonder rents are rising.

On the Continent, we have also seen market rental growth outstrip annual indexation. This is set to continue even with the printing of record high annualised inflation of 5.1%. Segro are the only fully pan-European listed player and they reported 4.1% like for like rental growth across Continental Europe for 2021. We remain confident that in many key markets this level of growth will be exceeded in 2022. Across Continental Europe, online sales penetration now averages 15-18%, still a long way behind the UK at c.28%. Shortening supply chains and reshoring has driven demand in cheaper markets such as Poland. Savills European Logistics Survey 2021 showed that 46% of all occupiers canvassed expected to increase their warehouse requirements over the next year.

Availability continues to shrink, with vacancy down from 5.1% to 3.5%, with record low levels in Dublin (1.1%), the Netherlands (3.3%), Czech Republic (1.7%) and take up levels well ahead of decade averages with Madrid (+9), Poland (+13%) and the Netherlands (+10%). For the best space, rents are responding very rapidly and we expect average rental growth to exceed 5% across the Continent. However in early May this year (post the year end) Amazon announced a dramatic pause in its expansion programme. Whilst we believe that these comments were focused on their domestic US market, it has caused reverberations across all logistics/ecommerce real estate markets. Major owners and developers such as Segro and Tritax point to full orderbooks and strong transactional evidence, forward looking equity markets took fright. Share prices of these two names are down - 22% and 17% respectively, calendar year to date.

[speedsgh] 30/5/2022 12:39

NAV
111.3p (EUR 1.316) as at 31/3/22
108.5p (EUR 1.291) as at 31/12/21
109.0p (EUR 1.267) as at 30/9/21
106.1p (EUR 1.236) as at 30/6/21
103.6p (EUR 1.216) as at 31/3/21
107.9p (EUR 1.201) as at 31/12/20
102.9p (EUR 1.127) as at 30/9/20
103.0p (EUR 1.128) as at 30/6/20
99.92p (EUR 1.127) as at 31/3/20
94.21p (EUR 1.11) as at 31/12/19
94.95p (EUR 1.07) as at 30/9/19
95.85p (EUR 1.07) as at 30/6/19
91.13p (EUR 1.06) as at 31/3/19
96.7p (EUR 1.08) as at 31/12/18
97.3p (EUR 1.09) as at 30/9/18
98.3p (EUR 1.11) as at 30/6/18

[catch007] 30/5/2022 08:38

Solid update imho and share price should benefit. My concern has been the number of fund raises however the river dried up on the last one and hopefully ASLI will focus on asset management initiatives now.

[cwa1] 30/5/2022 06:21

From this morning's update:-

Highlights

-- Portfolio valuation increased by 2.5%, or EUR16.8 million to EUR682.8 million, reflecting inflation-linked rental growth and further yield compression
-- NAV per Ordinary share increased by 1.9% to 131.6c (GBp - 111.3p 1 ) (31 December 2021: 129.1c (GBp - 108.5p 1 )), reflecting a NAV total return of 13.0% (in Euro terms) for the 12 months to 31 March 2022

-- EPRA Net Tangible Assets 2 increased by 2.2% to 139.4c per Ordinary share (31 December 2021: 136.4c)

-- 100% of Q1 2022 rent collected
-- First interim dividend for 2022 of 1.41c (GBp - 1.19p) declared, payable on 24 June 2022
-- Construction of Madrid Phase IV scheduled to complete in late Q2 2022, increasing portfolio valuation to EUR763 million, using agreed purchase price

-- Agreement signed for the purchase of three French urban logistics assets , for EUR32.5 million, on completion of which the portfolio will comprise 16 urban logistics warehouses and 11 mid-box logistics warehouses

-- Issue of new equity raising GBP38 million (EUR45.6 million) to support near-term acquisition strategy

Evert Castelein, Fund Manager, abrdn, commented:

"It is very pleasing to report another quarter of NAV growth. This reflects both the strength of the European logistics market and the high quality nature of our diversified, modern portfolio.

"Logistics is a long-term growth story, fuelled by the acceleration of e-commerce across Europe, and increasingly the changes in how companies manage their supply chains. There continues to be an acute supply-demand imbalance across the entire European logistics market, with vacancy rates sitting at historically low levels and this is particularly true in urban areas where there is greater demand from other land uses. Our portfolio is also well positioned to benefit from rising inflation, with 70% of the portfolio's current income subject to full annual indexation."

[speedsgh] 19/5/2022 09:47

Q1 NAV update & 1st interim dividend declaration likely next week (last year released 24/5/21)

NAV
108.5p (EUR 1.291) as at 31/12/21
109.0p (EUR 1.267) as at 30/9/21
106.1p (EUR 1.236) as at 30/6/21
103.6p (EUR 1.216) as at 31/3/21
107.9p (EUR 1.201) as at 31/12/20
102.9p (EUR 1.127) as at 30/9/20
103.0p (EUR 1.128) as at 30/6/20
99.92p (EUR 1.127) as at 31/3/20
94.21p (EUR 1.11) as at 31/12/19
94.95p (EUR 1.07) as at 30/9/19
95.85p (EUR 1.07) as at 30/6/19
91.13p (EUR 1.06) as at 31/3/19
96.7p (EUR 1.08) as at 31/12/18
97.3p (EUR 1.09) as at 30/9/18
98.3p (EUR 1.11) as at 30/6/18

[giltedge1] 16/5/2022 10:05

I bought today 1.02 attracted by 4.7% yield, inflation linked rent reviews, & new buildings. Good yield for my SIPP.

[alan pt] 29/4/2022 21:26

Recent SERE results could be a good sign



"- Improved yield re-rating at the Rennes logistics investment, delivering a valuation increaseof €1.4 million, or 7.1%
- Improved yield re-rating at the Hamburg office investment, delivering a valuation increase of €1.1 million, or 4.5%
- Improved yield re-rating at the Nantes logistics investment, delivering a valuation increase of €0.4 million, or 6.5%
- Improved yield re-rating at the Rumilly logistics investment, delivering a valuation increase of €0.4 million, or 4.0%"

[alan pt] 17/3/2022 16:10

Interesting to see East Riding Pension Fund nipping in and picking up 8% while the price was depressed:


Bargain for them and pension funds are normally there for long term, so a good bit of stability

[pavey ark] 11/3/2022 11:20

Topped up today and now in for an average 102p (including costs).

Not very impressive record here and wouldn't like to have been here since IPO but sense that things will (must) improve.

Only moved here when the discount appeared and I do think that e commerce will increase across Europe.

As usual "you pays your money you takes your chance "