Half-year Report

RNS Number : 9133A

abrdn European Logistics Income plc

28 September 2022

 

28 September 2022

LEI: 213800I9IYIKKNRT3G50

abrdn European Logistics Income plc (LSE: ASLI) (the "Company" or "ASLI")

INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2022

Diversified portfolio of modern, sustainable and structurally supported Continental Europe mid box and urban logistics assets benefitting from high indexation and continued occupier demand

abrdn European Logistics Income plc, the investor in modern Continental European warehouses, which is managed by abrdn, today announces its interim results for the six months to 30 June 2022.

Stable NAV and earnings underpinned by portfolio's diversified European exposure and lease indexation:

· Net asset value per ordinary share increased by 1.4% to 130.9 cents (31 December 2021: 129.1 cents)

· NAV total return of 3.6% for the period

· EPRA net tangible assets 138.7 cents (31 December 2021: 136.4 cents)

· IFRS earnings per share of 4.82 cents (30 June 2021: 6.37 cents), following equity issuance

· 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

· Dividend distributions of 2.82 cents (2.39 pence) per share paid in respect of the period

· Attractive inflation linked lease profile, with 68% of current portfolio income subject to full uncapped indexation

· A £38 million (€45.6 million) equity issuance completed in February 2022, deployed into recent acquisitions

· €40 million three-year debt facility agreed with ING Bank, secured against Phases I to III of Spanish Madrid portfolio, at an all-in interest rate of 2.57%, post period end

Acquisitions further enhance portfolio's diversification with asset management supporting income growth:

· Strong rent collection with 100% of expected rent due for the period collected

· Portfolio value increased 2.2% to €680.4 million (31 December 2021: €660.8 million), reflecting continued yield compression

· Acquisition of two well-located logistics properties, in Bordeaux and Niort, totalling €23 million, with Heads of Terms signed to acquire a further French logistics asset, following which the portfolio will comprise 14 urban logistics warehouses and 12 mid-box logistics warehouses

· Annualised passing rent increased by 26% to €28.3 million (30 June 2021: €22.4 million)

· Income enhancing asset management successes including:

o  Five year lease agreed with ADER on 7,375 sqm of previously vacant space at Madrid Phase II, ahead of business plan

o  Completion of Madrid Phase IV Amazon hub

o  Delivery of highly sustainable warehouse extension at Waddinxveen, the Netherlands

· Weighted average unexpired lease term ("WAULT") (excluding breaks) of 8.0 years (31 December 2021: 8.0 years)

Tony Roper, Chairman, abrdn European Logistics Income, commented:

"Given the evolving geopolitical and economic environment, it is understandable that market expectations are being downgraded and an element of de-risking in portfolios is taking place.

"However, the European logistics occupier market is characterised by record low vacancy and high activity, with strong leasing momentum reflecting that Europe is at a much earlier stage of its supply chain reconfiguration and e-commerce penetration is still some way behind the UK. The incontrovertible shift in the way consumers shop and the infrastructure required to service that demand close to population centres is a source of greater certainty."

Evert Castelein, Lead Fund Manager, abrdn European Logistics Income, added:

"The proven resilience of the logistics sector throughout challenging market conditions maintains its justification as being the most compelling commercial real estate sector to hold. We have put together a high-quality, geographically diverse and tenant critical portfolio. With the reach of our pan-European teams on the ground, we are well placed to engage and collaborate with our tenants as we look to optimise our assets to support their operations.

"Being underpinned by robust index-linked income streams to good covenant tenants will, in addition to the aforementioned factors, help support valuations and continue to deliver value for our shareholders."

-Ends-

For further information please contact:

Aberdeen Asset Management PLC                               [phone]

Luke Mason

Gary Jones

Investec Bank plc  [phone]

Dominic Waters

Neil Brierley

Will Barnett

David Yovichic

Denis Flanagan

FTI Consulting  [phone]

Dido Laurimore

Richard Gotla

James McEwan

Highlights

Financial Highlights

	30 June 2022	31 December 2021
Total assets (€'000)	767,802	728,386
Equity shareholders' funds (€'000)	539,609	487,505
Share price - Ordinary share (pence)	99.60	117.00
Net asset value per Ordinary share (€)	1.31	1.29
Share price (discount)/premium to sterling net asset value	(11.4)%	7.8%

Performance (total return)

	Six months ended 30 June 2022	Year ended 31 December 2021	Since Launch return
Share price 1	(12.9)%	12.4%	19.9%
Net Asset Value (EUR) 1	3.6%	12.4%	39.1%

1 Considered to be an Alternative Performance Measure (see Glossary below for more information).

Overview

Company Overview

abrdn European Logistics Income plc (the "Company" or "ASLI") is an investment trust investing in high quality European logistics real estate to achieve its objective of providing its Shareholders with a regular and attractive level of income and capital growth. The Company invests in a portfolio of assets diversified by both geography and tenant throughout Europe, predominantly targeting well located assets at established distribution hubs and within population centres.

Financial Highlights as at 30 June 2022

Net asset value total return for the 6 months to 30 June 2022 1 3.6% For the 12 months to 31 December 2021: 12.4%	Net Asset Value (€'000) 539,609 31 December 2021: 487,505	Net Asset Value per share (€) 1 1.31 31 December 2021: 1.29
Share price total return for the 6 months to 30 June 2022 1 (12.9)% For the 12 months to 31 December 2021: 12.4%	(Discount)/ Premium to Net Asset Value 1 (11.4)% 31 December 2021: 7.8%	Ordinary distribution per share declared for the 6 months to 30 June 2022 2.82¢ Declared for the 12 months to 31 December 2021: 5.64¢ 2
EPRA Net Tangible Assets per share (€) 1 1.39 31 December 2021: 1.36	IFRS Earnings Per Share for the 6 months to 30 June 2022 4.82¢ For the 12 months to 31 December 2021: 15.43¢	Portfolio valuation (€'000) 675,692 31 December 2021: 660,973
Number of assets 23 31 December 2021: 23	Average lease length excluding breaks in years 8.0 31 December 2021: 8.0	Loan-To-Value (%) 3 21.7% 31 December 2021: 25.1%
Average building size (sqm) 23,403 31 December 2021: 23,403	Rent collection 100% 31 December 2021: 100%
1 Alternative Performance Measurements - see glossary. 2 Total dividend paid in respect of year ended 31 December 2021. 3 25.7% including €40m ING loan drawn after period end.

Interim Board Report

Chairman's Statement

Overview

I am pleased to be presenting the Company's half yearly report for the six months ended 30 June 2022.

The Company's investmentobjective remainssolelyfocused on investing in logistics real estate in Europe, with our strategy targetingboth medium sized "mid box"assets and smaller format "urban logistics" that will serve 'last mile' functions forEurope's growing e-commerce activities.

The currentdiversified portfolio of 26 modern logistics warehouses in established locations across five countries (including the soon to be acquired French asset near Dijon) has been carefully stock pickedby our Investment Manager, with an increasing weightingtowards urban assets. Whilst wearestartingto see some pockets ofoutward yield movement in the portfolio, valuationsaregenerally stable, reflecting occupier demand for our high specification buildings, which arelocated close to population hubs with excellentroad, rail and port links. Our assets typically benefitfromdurable and growing income streams with long index- linked leases secured against a diversified range of tenants.

The prospective growth of the Company will follow the existing investment strategy, targeting a rangeof logisticsreal estateassetsthat theInvestmentManagerbelieves arewell located, closeto establisheddistributionhubs andpopulationcentresthat willprovidetheCompanywithincreasedassetandtenantdiversificationandenable it tomeetitsinvestment objective. A greater focus on such assets in a marketwith lowvacancyrates,newdevelopment constraintsandwithCPIrentincreases feeding throughconvinces us of the positioning ofourportfolio.

We are facing a period of global economic uncertainty and concerns over increasing energy costs and the almost unprecedented inflationary pressures being witnessed.

However, the underlying premise of income and capital growth, generated from in-demand assets buoyed by continuing e-commerce penetration, the near shoring of operations, land scarcity and rapidly rising construction costs, remains compelling. Added to this, we are starting to see higher inflation feeding through into annual lease reviews, which is a major benefit of many European lease agreements which are predominantly linked to CPI or its equivalent.

Investors continue to support the Company, recognising the qualities of the GRESB rated portfolio underpinned by the changing nature of both tenants and their customers in the desire for reliable and fast delivery lines and supported by indexed income-producing assets and competitive fees. It was good to finally be able to hold an in-person AGM on 6th June and to be able to present and meet shareholders again after the pandemic- induced closed meetings. The Board was also able to visit the Company's acquisitions in Madrid with the Investment Manager and to fully appreciate the quality and scale of these assets. The local transaction and asset management team based in central Madrid gave the Directors a great deal of comfort around the knowledge and expertise that helps manage our Spanish portfolio.

Much of the early part of H1 wasspent bedding downthe Madrid portfolio. The purchase of which was completed in December 2021. In July, as planned, the Company saw the completion of the construction and handover ofthededicated Amazon hub and its associated car parking deck for its fleet of delivery vans in Phase IV at Gavilanes. This was a milestone with Amazon now one of the largest tenants within the portfolio and occupying this newly-constructed last-mile warehouse on a 25 yearindexedlease.

We have continued to acquire assets that meet our strict investment criteria. On 1 August 2022, the Company announced completion of the acquisition of two logistics properties, in Bordeaux and Niort, France. The aggregate purchase price of circa €23 million reflects a net initial yield of 4.0%.

Both buildings are leased to the same German-owned global third party logistics provider, operating as Dachser France. This long-standing 3PL operator has a strong financial covenant and both leases provide for annual indexation. Site coverage is also low, at 22% and 9% respectively, providing excellent opportunities for expansion in the future. We expect to announce the acquisition of a third French warehouse in Dijon shortly.

Further details on the Company's portfolio are provided in the Investment Manager's Report that follows.

Results

The unaudited Net Asset Value ("NAV") per share as at 30 June 2022 was 130.9 euro cents (GBp - 112.4p), compared with the NAV per share of 129.1 cents (GBp - 108.5p) at the end of 2021, reflecting, with the interim dividends declared, a NAV total return of 3.6% for the six month period under review, in euro terms. Over the 12 months ended 30 June 2022, the NAV total return was 10.6%, reflecting continued strength in the sector.

The closing Ordinary share price at 30 June 2022 was 99.6p (31 December 2021 - 108.5p), representing a discount to the NAV per share of 11.4%.

Rent collection

Despite economic headwinds, the Company's rent collection remains strong with 100% of the expected rental income for the half year ended 30 June 2022 collected.

Dividend

On 18 February 2022 the Board declared a fourth interim distribution of 1.41 euro cents (equivalent to 1.21 pence) per Ordinary share in respect of the year ended 31 December 2021. In aggregate a total dividend of 5.64 euro cents was paid in respect of the 2021 financial year. The equivalent sterling rate paid was 4.84 pence.

First and second interim distributions of 1.41 euro cents (equivalent to 1.19 pence and 1.20 pence respectively) have been declared in respect of the year ending 31 December 2022.

Fund raising and share issuance

In January, the Company raised £38 million (€45.6 million) in aggregate via a Placing under the Company's Share Issuance Programme which included a retail offer.

A total of 34,545,455 new Ordinary Shares were issued at a price of 110 pence per new Ordinary Share and the Company's issued share capital now consists of 412,174,356 Ordinary Shares with voting rights.

Revolving credit facility/ financing

The Company's €70 million Revolving Credit Facility ("RCF") at the parent Company level provided by Investec Bank provides flexibility in the acquisition of new properties and can help to avoid immediate cash drag on investment returns. At the time of writing we have drawn €50 million against this to finance the Amazon leased Phase IV Madrid hub before fixing longer term debt on this asset.

On 7 July 2022 the Company secured a new €40m debt facility against Phases I to III of its Spanish Madrid portfolio. A three-year term was agreed with ING Bank at an all-in interestrate of 2.57%, effected using an interestrate swap.

At 30 June 2022 the asset level LTV was 21.7%. The ING loan saw this rise to 25.7%. The Company's non-recourse loans , including the ING loan, range in maturities between 2.9 and 6.6 years with interest rates ranging between 1.10% and 2.57% per annum.

The current average interestrate on the totalfixedtermdebt arrangements of €201.6 million (excluding the RCF) is 1.66%. The Board continuesto keep the levelof borrowings under review,calculated at the time ofdrawdownfor a property purchase. The actual levelof gearing mayfluctuateover the Company's life as and when newassetsareacquired or whilst short term asset management initiativesare being undertaken. Banking covenantsare reviewed by the Manager and the Board on a regular basis.

ESG and Asset Management

The Company believes that comprehensive assessment of ESG factors leads to better outcomes for shareholders and adopts the Manager's policy and approach to integrating ESG.

The current portfolio has strong ESG credentials having been awarded Sector Leader status and being placed first in theListedEuropean Industrial - DistributionWarehousesegment in the 2021GRESBsurvey(GlobalRealEstateSustainability Benchmark).Wecannotrest on ourlaurels hereand a programmeof works continuestoenhanceareas whereimprovementscan be made, includingsolar panelprojects,LEDlighting, analysis ofenergyandwater consumption,partlyinformed byourtenant satisfaction survey.

The Investment Manager continues to focus on asset management initiatives, leveraging its network of locally based asset managers to enhance the value of the portfolio's assets. This includes initiatives around building extensions and improvements to sites both internally and externally for the benefit of tenants and their workforces and to enhance the future value of the assets. The now completed extension alongside our Waddinxveen asset is a very good example of this and allows our tenant Combilo to accommodate its growing client base and is accretive to returns.

Outlook

Given the evolving geopolitical and economic environment, it is understandable that market expectations are being downgraded and an element of de-risking in portfolios is taking place. Increasing interest rates may well translate into some of the 'hot' money that has chased logistics assets globally, whilst using high leverage, re-assessing the situation, leading

to some softening of valuations. That said, the European logistics occupier market remains very active with strong leasing momentum, reflecting that Europe is at a much earlier stage of its supply chain reconfiguration and e-commerce penetration still some way behind the UK. The incontrovertible shift in the way consumers shop and the infrastructure required to service that demand close to population centres is a source of greater certainty.

With the majority of our tenants leases subject to uncapped CPI increases we should see attractive increases in income in the coming years. Whilst always mindful of tenant affordability the Company is in a strong position and early stage discussions may lead to lease extensions helping underpin the long term nature of our income generation.

The Investment Manager believes that our logistics assets remain relatively defensive against the downturns in economic activity being witnessed. The Company's portfolio is characterised by carefully selected assets in well-located areas close to population hubs with good transport links underpinned by low vacancy rates across Europe. The increasing construction costs for developers being witnessed will impact supply and long indexed leases secured against a financially robust and increasingly diverse tenants base, for whom rent remains a small percentage of revenues, for us underpins returns. We have seen an increasing focus on sustainability from investors and tenants alike and are working together with our advisers on an early plan and costings towards carbon neutrality. New regulations combined with evolving valuation guidance will drive a wider gap between future- fit assets and those facing obsolescence.

To date we have built a diversified portfolio of 26 modern, high quality logistics warehouses with long term, inflation linked income characteristics, which has underpinned the valuation gains we have witnessed and delivered attractive returns for Shareholders. We will seek to add to the portfolio at the opportune time, especially as we see attractive opportunities in the market as interest rate increases start to impact what has been a very buoyant market to date.

Tony Roper

Chairman

27 September 2022

Interim Board Report

Investment Manager's Review

Overview

The resilience of the logistics market is again being put to the test with the focus of the world in the first half of 2022 shifting towards the impact from the Russian invasion of Ukraine. European sanctions, rapidly rising inflation and increasing interest rates are impacting European economies leading to uncertainty and the risk of recession. Notwithstanding the cyclicality of financial markets, logistics has remained resilient thanks to its strong fundamentals with demand for good quality warehouse stock structurally exceeding new supply, especially with new developments looking increasingly constrained due to rising construction costs.

One of the key themes today for many is without doubt inflation. With our focus on Continental Europe, our CPI- indexed rents are a great benefit and will help to grow our income stream. With rents which increase annually predominantly in line with increasing inflation and our focus on what we believe is the most attractive part of the market and buildings which have every opportunity of a 'second-life' when leases end, we believe the Company is well positioned. Having options is key. Urban logistics and mid-sized boxes with modern specifications are highly sought after thanks to the continued growth in online sales and with companies seeking to move closer to end- customers in order to reduce transportation costs and delivery times. The limited supply witnessed in the market will support stronger rental growth especially for these assets, which is keyfor our income driven strategy.

Despite the market challenges, 100% of expected rental income was collected in 2021 and H1 2022 reflecting the strong and diverse tenant base. Property valuations increased by 2.16% (+€14.4m) over the first six months of the year resulting in further NAV growth.

With the support of our local real estateteams located across Europe we have been able to build a well-diversified portfolio with 23 buildings as at 30 June, of which 16 werebrand-new at the time of purchase. These assetshave modern specifications and aresituated in easily accessible locations with 12 located on the urban fringes of major cities . The development of the Amazon hub in Madrid, our largest warehouse, was completed in July and is urban located as well.Two further warehouses in Francewerepurchased in July 2022 and weareworkingtocomplete a third shortly, two of these are urban located.

Given the uncertain market situation, we have taken a more cautious approach over the early part of 2022 with a focus on optimising the existing portfolio and closing pipeline deals. We believe a cautious approach is prudent in today's market with gearing at a level below target, giving us the flexibility to act quickly when there is more clarity on the direction of travel of markets.

The main achievementsover the six months have been the signing of the purchase agreements in France with global logistics operator Dachser as tenant, the delivery of the Amazon development in Madrid, completion of a small extension project in Waddinxveen in the Netherlands and the signing of a new lease for a vacant unit in Spain, all of which closed early Q3 2022. A further priority is in seeking to keep the portfolio future-fitbyfocusing on sustainability and defining a carbon strategy whilst closely monitoringthemarket looking forattractive newinvestment opportunities.

Strong fundamentals will drive performance in the logistics sector

Each real estate sector has its own challenges. Clearly, the pandemic changed the way we work and how we use officespace and accelerated growth in online salesaffectingtheretailmarket to a largeextent.For logistics, the challenge is different and this is reflected in the supply-demand imbalance with logistics being business critical and essentialforcompaniesto operate.During the pandemic, demandforwarehousespace held up well, benefitingfrom the growth in online sales with goods delivered directly from a warehouse to the consumer and withsupermarkets embracingthis business modelrapidly.Wehave all witnessed supply chaindisruptions and thesehave led tocompanies holdinglargerinventories in warehouses or evenconsidering near-shoring some of theirproduction facilities to Europe in order to maketheir supply chainsmore resilient.Thesetrends haveresulted in an increasedtake-upof logistics space leadingto historiclowvacancyrateswith the developmentof modernwarehousespace unableto keep up with demand. Costs forbuildingmaterialssuch as timber,steel and concrete  and also land scarcity have increasedsignificantlymaking it hardfordevelopers to undertakeprofitableprojects,thus drivingrentsfurtherupwards. So, despiteeconomic turmoil in the short-termwestrongly believelogistics will continueto outperformwithrentsgrowingespecially in urban locationswheredemand is highest.

Attractive assets with growth potential

Our portfolio strategy is defined by the assets that we have invested in and their locations, where we think growth will be strongest. The ability to more easily let a warehouse to another company (liquidity) is hugely important and an element of the drivers for growth in the future. Diversification is another important consideration.

With 26 assets (including July transactions and post completion of the next French purchase) spread across 5 European countries and leased to 47 tenants the Company is well positioned in this regard.

In July 2022, the Company exchanged contracts in Madrid on a state-of-the-art last mile Amazon hub of 16,500 sqm together with a 20,000 sqm decked Electric Vehicle van hub capable of accommodating 530 vehicles. This prime asset was the fourth and final phase of the Sky Gavilanes portfolio purchase, a deal which was closed in December 2021 with seven existing warehouses and this one forward commitment. Amazon has committed to a 25-year lease until March 2047, subject to a break option in March 2037. Net purchase price was €80.3 million reflecting a net initial yield of 3.4%, as agreed in Q4 2021.

In July, the Company also exchanged contracts on a French portfolio of two warehouses for a net purchase price of €23.0 million reflecting a net initial yield of 4.0%. Both properties are leased out to Dachser, an international provider of transport and logistics solutions, and provide annual indexation, whilst they also offer medium term asset management opportunities due to their low site coverage. One building is located in Bordeaux, one of France's more populated cities, located just a few kilometres from the city centre. Total size of the asset is 6,504 sqm with a site cover of only 22% providing the option to expand the building further if required by the tenant. The second building is located in Niort with a site cover of only 9%. The Company expects to complete on the purchase of a third freehold building in France in Q3.

At the end of June 2022, the portfolio was tilted towards the Netherlands (35% of portfolio value) and Spain (29%), followed by Poland (14%), France and Germany (each 11%). The allocation to Spain grew to almost 36% with the addition of the Amazon warehouse in July and in France to 13% with the addition of the Dachser portfolio, with exposure to the other countries decreasing proportionally.

Spain now represents our largest country exposure with one urban logistic warehouse in Barcelona, a mid-sized building in Leon and nine warehouses in Madrid. Madrid is the third largest city in Europe after London and Paris. The urban profile of these warehouses is exactly in line with our strategy and we are pleased to have Amazon in the portfolio. The Netherlands is our second largest market. The Gateway function with Rotterdam, the largest seaport in Europe, gives the Netherlands a strategic location in Europe and starting point for large transport corridors leading to Belgium, Germany and beyond.

This is reflected in the second highest logistics stock per capita just behind Belgium. The combination of a densely populated country and a fierce debate around the impact of further construction on the environment and biodiversity makes it even harder to find locations for new logistics developments. This leaves us well positioned with the six Dutch assets in the portfolio. Including the two recent additions, we now have four warehouses in France with another in the pipeline providing further diversification to this large economy. The three warehouses in Poland provide higher yields over certain other regions. The Polish market has been amongst the strongest growing European logistics market benefiting from low labour costs. Its proximity to the neighbouring Ukraine has not impacted the portfolio. With Poland a member of NATO, its historically strong link to Ukraine has led to increased take-up as some Ukrainian companies have required extra storage. The two multi-let assets in Germany are located in the densely populated Frankfurt Rhine-Main region and have performed very well since being acquired.

Property portfolio

Country	Location	Built	WAULT incl breaks in yrs	WAULT excluding breaks in yrs	% of Portfolio
France	Avignon	2018	5.1	9.3	6.9
France	Meung sur Loire	2004	-	-	2.9
Germany	Erlensee	2018	5.5	7.6	5.7
Germany	Flörsheim	2015	2.6	6.3	3.6
Netherlands	Den Hoorn	2020	7.8	7.8	7.7
Netherlands	Ede	1999/2005	5.5	5.5	4.3
Netherlands	Oss	2019	12.0	12.0	2.3
Netherlands	's Heerenberg	2009/2011	9.4	9.4	4.3
Netherlands	Waddinxveen	1983 - 2018	11.4	11.4	6.4
Netherlands	Zeewolde	2019	12.0	12.0	4.9
Poland	Krakow	2018	3.3	3.3	4.0
Poland	Lodz	2020	5.8	5.8	4.1
Poland	Warsaw	2019	5.3	5.3	4.1
Spain	Barcelona	2019	4.0	7.0	2.5
Spain	Leon	2019	6.7	6.7	2.5
Spain	Madrid	1999	4.5	7.5	1.6
Spain	Madrid - Gavilanes 1.1	2019	7.2	7.2	4.8
Spain	Madrid - Gavilanes 1.2	2019	1.1	8.1	2.7
Spain	Madrid - Gavilanes 2.1	2020	4.1	14.1	2.1
Spain	Madrid - Gavilanes 2.2	2020	2.0	4.0	1.7
Spain	Madrid - Gavilanes 2.3	2020	-	-	1.6
Spain	Madrid - Gavilanes 3 (2 assets)	2019	4.9	8.9	6.1
Total at 30 June 2022 (1)			6.6	8.0	86.8
Spain (July 2022)	Madrid - Gavilanes 4	2022			10.2
France (July 2022)	Bordeaux	2005			1.5
France (July 2022)	Niort	2014			1.5
Total (2)		13.2
Total (1+2)		100.0

Asset loans as at 30 June 2022

Country	Property	Bank	Existing loan €million	End date	Remaining Years	Interest (incl margin)
Germany	Erlensee	DZ Hyp	17.8	January 2029	6.6	1.62%
Germany	Florsheim	DZ Hyp	12.4	January 2026	3.6	1.54%
France	Avignon + Meung sur Loire	BayernLB	33.0	February 2026	3.6	1.57%
Netherlands	Ede + Oss + Waddinxveen	Berlin Hyp	44.2	June 2025	2.9	1.35%
Netherlands	s Heerenberg	Berlin Hyp	11.0	June 2025	3.0	1.10%
Netherlands	Den Hoorn + Zeewolde	Berlin Hyp	43.2	January 2028	5.5	1.38%
Total as at 30 June 2022			161.6		4.2	1.43%
Spain	Madrid, Gavilanes 1-3	ING	40.0	July 2025	4.0	2.57%
Total including ING loan			201.6			1.66%

Indexed rental income

2022 has experienced unprecedented levels of inflation driven by the impact from the pandemic and the war in Ukraine with increased costs of energy one of the main drivers. In June inflation in the Eurozone was 8.6% (year-on-year) 2 . One of the key benefits of the Continent, compared to the UK, is the relatively standard annual indexation clause seen in leases. The majority of our contracts have upward only indexation clauses, sometimes with a cap. In the portfolio, a total of 68% of rent is fully indexed with no cap, 24% has a cap between 2% and 5%, whilst 7% attracts German threshold indexation.

The affordability of rents for our tenants with this increasingly high indexation is an important consideration. As a landlord at this stage we feel our position is strong with the logistics business of many tenants critical to their success. Overall, rent may often be a smaller portion of overall operating expenses for companies meaning the impact may be limited for them, especially where companies have pricing power in their particular market. Our local asset managers will enable us to manage this process well, as with the challenges of the pandemic.

ESG

Environmental, Social and Governance (ESG) is one of the keystrategic goals where the Investment Manager is distinguishing itself from its peer group. The Company was awardedSector Leader Status in the 2021 GRESB survey and was first in its peer group of six listed logistics strategies in Europe. GRESB is the Global RealEstateSustainability Benchmark assessment and a leading indicator worldwidefor measuring green performance. The Company received 84 out of 100 pointsresulting in four out of five green stars.

Our starting point is strong thanks to the younger age of the portfolio, the installation of solar panels on ten of our buildings and a dedicated ESG Team helping tooptimise the sustainability credentials.

As a next step, the Investment Manager is working on defining a Net Zero Carbon strategy with the Board with clear reduction targets for the future. We have undertaken a first stage pathway analysis with a third party specialist in this field. Knowing the carbon footprint of each building in the portfolio will help guide to creating a real structure to our ambitions for both the near and long term.

Outlook

We should not underestimate the challenges that markets face in the short term. Tighter yield spreads and looming recession will present challenges for sections of the real estate market. Longer term we are confident that the structural drivers of supply chain evolution are deeply embedded - particularly on the Continent. Europe is at a much earlier stage of the growth in e-commerce penetration and substantial investment in modern warehousing is required to make this a profitable model for occupiers. In a global context, Europe is a large logistics market and should continue to grow further due to supply chain diversification/near-shoring, as political risks and the costs of running long distance global supply chains have escalated.

Construction costs, lead times and development financing margins have also increased sharply, which is likely to restrict development pipelines, suppressing future supply. This should support the strength of cash flows and the potential for structurally higher market rents in the sector.

Furthermore, it is much more typical in Europe for rents  to contractually increase through indexation to annual inflation, which is a key point of differentiation compared to most UK lease structures. This gives cash flows from European logistics assets a stronger direct link to inflation, boosting our revenue earning capabilities. That said we are always cognisant of the possible impact that such increases may have on our tenants businesses. The high levels of inflation being witnessed as lease renewal negotiations come up means that there may well be options to help limit increases for certain tenants whilst agreeing longer lease terms, to the benefit of both sides.

We have recently seen examples of reduced indexation agreed in exchange for lease extensions or the removal of breaks, which is a positive for investors looking for longer term cash flows.

We still hold strong conviction in our strategy to focus on urban and mid-box assets as supported by the continued structural demographic trends such as urbanisation and suburbanisation, automation and digitalisation. Combine this with a post-pandemic emergence across the Continent to implement improved public health guidance and a wider recognition of the huge change needed to deliver a pathway to net zero and this only serves to underline our robust investment philosophy in targeting best in class assets, in the strongest locations, underpinned by excellent fundamentals.

The proven resilience of the logistics sector throughout challenging market conditions maintains its justification as being the most compelling commercial real estate sector to hold. We have built a high-quality, diverse, tenant and geographical mix across the portfolio. With the reach of our pan-European teams on the ground, we are well- placed to engage and collaborate with our tenants as we look to optimise our assets to support their operations. Fundamentally for an income fund, being underpinned by robust index-linked income streams to good covenants will, in addition to the aforementioned factors, help support valuations and continue to deliver for our shareholders.

Evert Castelein

Fund Manager

abrdn Investments Ireland Limited

27 September 2022

Interim Board Report

Disclosures

Principal risks and uncertainties

The principal risks and uncertainties affecting the Company are set out on pages 12 to 16 of the Annual Report and Financial Statements for the year ended 31 December 2021 (the "2021 Annual Report") together with details of the management of the risks and the Company's internal controls. Notwithstanding the risk of recession, higher inflation and tenant rental negotiations discussed in the Chairman's Statement and Investment Manager's Review, these risks have not changed materially and can be summarised as follows:

. Strategic Risk: Strategic Objectives and Performance;

. Investment and Asset Management Risk: Investment Strategy;

. Investment and Asset Management Risk: Developing and Refurbishing Property;

. Investment and Asset Management Risk: Health and Safety;

. Investment and Asset Management Risk: Environment;

. Financial Risks: Macroeconomic;

. Financial Risks: Gearing;

. Financial Risks: Liquidity and FX Risk;

. Financial Risks: Credit Risk;

. Financial Risks: Insufficient Income Generation;

. Regulatory Risks: Compliance;

. Operational Risks: Service Providers; and

. Operational Risks: Business Continuity.

The Board also has a process in place to identify emerging risks. If any of these are deemed to be significant, these risks are categorised, rated and added to the Company's risk matrix.

The Board has reviewed the risks related to the Covid-19 pandemic and the on-going conflict in Ukraine which has impacted the underlying tenants in the Company's warehouse portfolio in varying degrees due to the disruption of supply chains and demand for products

and services, increased costs and potential issues around changes in cash flow forecasts. However, the Board notes the Investment Manager's robust and disciplined investment process which continues to focus on high quality warehouses located across Europe and prudent

cash flow management. The Board, through the Manager, closely monitors all third party service arrangements and has not suffered any interruption to service. The Board therefore believes that the Manager and all other key third party service providers have in place appropriate business interruption plans and are able to maintain their service levels to the Company.

Related party transactions

abrdn Fund Managers Limited ("aFML") acts as Alternative Investment Fund Manager, abrdn Investments Ireland Limited acts as Investment Manager and Aberdeen Asset Management PLC acts as Company Secretary to the Company; details of the service and fee arrangements can be found in the 2021 Annual Report, a copy of which is available on the Company's website. Details of the transactions with the Manager including the fees payable to abrdn plc group companies are disclosed in note 16 of this Half Yearly Report.

Going concern

In accordance with the Financial Reporting Council's Guidance on Risk Management, Internal Control and Related Financial and Business Reporting, the Directors have undertaken a rigorous review and consider that thereare no material uncertainties and that the adoption of the going concern basis of accounting is appropriate. This review included the additional risks relating to the ongoing Covid-19 pandemic and conflict in Ukraine and, where appropriate, action taken by the Manager and Company's service providers in relation to those risks. An analysis of the level of rental payments from tenants together with operational and other Company costs has been modelled covering a range of potential risk scenarios. In addition, the Company maintains an overdraft facility which allows the Company to draw down additional funds if unexpected short term liquidity issues were to arise. The Board notes that the Investment Manager remains in regular contact with tenants and third party suppliers and continues to have a constructive dialogue with all parties. Accordingly, the Directors believe that the Company has adequate financial resources to continue in operational existence for the foreseeable future and at least 12 months from the date of this Half Yearly Report. Accordingly, the Directors continue to adopt the going concern basis in preparing these financial statements.

Directors' Responsibility Statement

The Directors are responsible for preparing this half-yearly financial report in accordance with applicable law and regulations. The Directors confirm that to the best of their knowledge:

. the condensed set of financial statements contained within the half-yearly financial report has been prepared in accordance with International Accounting Standard 34 'Interim Financial Reporting' and gives a true and fair view of the assets, liabilities, financial position and net return of the Company as at 30 June 2022; and

. the Interim Board Report (constituting the interim management report) includes a fair review of the information required by rule 4.2.7R of the UK Listing Authority Disclosure Guidance and Transparency Rules (being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements and a description of the principal risks and uncertainties for the remaining six months of the financial year) and 4.2.8R (being related party transactions that have taken place during the first six months of the financial year and that have materially affected the financial position of the Company during that period).

Tony Roper

Chairman

27 September 2022

Property Portfolio

Property Portfolio as at 30 June 2022

	Property	Tenure	Principal Tenant
1	France, Avignon (Noves)	Freehold	Biocoop
2	France, Meung sur Loire	Freehold	Vacated - agents appointed
3	Germany, Erlensee	Freehold	Bergler
4	Germany, Flörsheim	Freehold	Ernst Schmitz
5	Poland, Krakow	Freehold	Lynka
6	Poland, Warsaw	Freehold	DHL
7	Poland, Lodz	Freehold	Compal
8	Spain, Barcelona	Freehold	Mediapost
9	Spain, Leon	Freehold	Decathlon
10	Spain, Madrid (Coslada)	Freehold	DHL
11	Spain, Madrid 1.1	Freehold	Talentum
12	Spain, Madrid 1.2	Freehold	Amazon
13	Spain, Madrid 2.1	Freehold	Carrefour
14	Spain, Madrid 2.2	Freehold	MCR
15	Spain, Madrid 2.3	Freehold	ADER 1
16/17	Spain, Madrid 3 (2 buildings)	Freehold	Arrival
18	the Netherlands, Ede	Freehold	AS Watson (Kruidvat)
19	the Netherlands, Oss	Freehold	Orangeworks
20	the Netherlands, 's Heerenberg	Freehold	JCL Logistics
21	the Netherlands, Waddinxveeen	Freehold	Combilo International
22	the Netherlands, Zeewolde	Freehold	VSH Fittings
23	the Netherlands, Den Hoorn	Leasehold	Van der Helm
	Acquired after 30 June 2022
24	France, Bordeaux	Freehold	Dachser
25	France, Niort	Freehold	Dachser
26	Spain, Madrid 4	Freehold	Amazon

1 ADER occupation post period end.

Condensed Consolidated Statement of Comprehensive Income

Notes		1 January to 30 June 2022 Unaudited			1 January to 30 June 2021 Unaudited			1 January to 31 December 2021 Audited
		Revenue €'000	Capital €'000	Total €'000	Revenue €'000	Capital €'000	Total €'000	Revenue €'000	Capital €'000	Total €'000
REVENUE
Rental income		13,593	-	13,593	11,121	-	11,121	23,283	-	23,283
Property service charge income		2,777	-	2,777	1,648	-	1,648	3,435	-	3,435
Other operating income		383	-	383	201	-	201	219	-	219
Total Revenue	2	16,753	-	16,753	12,970	-	12,970	26,937	-	26,937
GAINS ON INVESTMENTS Gains on revaluation of investment properties	8	-	15,676	15,676	-	15,290	15,290	-	41,031	41,031
Total Income and gains on investments		-	15,676	15,676	12,970	15,290	28,260	26,937	41,031	67,968
EXPENDITURE
Investment management fee		(2,017)	-	(2,017)	(1,201)	-	(1,201)	(2,756)	-	(2,756)
Direct property expenses		(981)	-	(981)	(1,123)	-	(1,123)	(1,851)	-	(1,851)
Property service charge exposure		(2,777)	-	(2,777)	(1,648)	-	(1,648)	(3,435)	-	(3,435)
SPV property management fee		(89)	-	(89)	(93)	-	(93)	(371)	-	(371)
Other expenses		(1,169)	-	(1,169)	(882)	-	(882)	(1,735)	-	(1,735)
Total expenditure		(7,033)	-	(7,033)	(4,947)	-	(4,947)	(10,148)	-	(10,148)
Net operating return before finance costs		9,720	15,676	25,396	8,023	15,290	23,313	16,789	41,031	57,820
FINANCE COSTS Finance costs	3	(1,687)	-	(1,687)	(1,373)	-	(1,373)	(3,449)	-	(3,449)
Effect of foreign exchange differences		516	48	564	53	(507)	(454)	264	753	1,017
Net return before taxation		8,549	15,724	24,273	6,703	14,783	21,486	13,604	41,784	55,388
Taxation	4	(367)	(4,363)	(4,730)	(391)	(4,832)	(5,223)	(651)	(10,294)	(10,945)
Net return for the period		8,182	11,361	19,543	6,312	9,951	16,263	12,953	31,490	44,443
Total comprehensive return for the period		8,182	11,361	19,543	6,312	9,951	16,263	12,953	31,490	44,443
Basic and diluted earnings per share	6	2.02¢	2.80¢	4.82¢	2.47¢	3.90¢	6.37¢	4.50¢	10.93¢	15.43¢

The accompanying notes are an integral part of the Financial Statements.

The total column of the Condensed Consolidated Statement of Comprehensive Income is the profit and loss account of the Company. All revenue and capital items in the above statement derive from continuing operations. No operations were acquired or discontinued during the period.

Condensed Consolidated Balance Sheet

Notes		30 June 2022Unaudited €'000	30 June 2021Unaudited €'000	31 December 2021 Audited €'000
NON-CURRENT ASSETS Investment properties  8 Deferred tax asset  4		698,463 2,993	492,280 1,081	683,878 2,978
Total non-current assets		701,456	493,361	686,856
CURRENT ASSETS
Trade and other receivables	9	12,705	15,522	11,175
Cash and cash equivalents	10	44,189	30,832	23,280
Other assets		9,452	200	6,966
Derivative financial assets		-	77	109
Total current assets		66,346	46,631	41,530
Total assets		767,802	539,992	728,386
CURRENT LIABILITIES
Bank loans	13	-	19,500	15,500
Lease liability	11	550	550	550
Trade and other payables	12	12,929	8,780	14,466
Total current liabilities		13,479	28,830	30,516
NON-CURRENT LIABILITIES
Bank loans	13	160,552	143,453	160,447
Lease liability	11	22,221	22,487	22,355
Deferred tax liability	4	31,941	20,204	27,563
Total non-current liabilities		214,714	186,144	210,365
Total liabilities		228,193	214,974	240,881
Net assets		539,609	325,018	487,505
SHARE CAPITAL AND RESERVES
Share capital	14	4,717	2,970	4,309
Share premium		269,569	83,791	225,792
Special distributable reserve		178,207	182,368	178,207
Capital reserve		74,619	41,719	63,258
Revenue reserve		12,497	14,170	15,939
Equity shareholders' funds		539,609	325,018	487,505
Net asset value per share	7	€1.31	€1.24	€1.29

Company number: 11032222

The accompanying notes are an integral part of the Financial Statements.

Condensed Consolidated Statement of Changes in Equity

Six months ended 30 June 2022 (unaudited)  Notes	Share capital €'000	Share premium €'000	Special distributable reserve €'000	Capital reserve €'000	Revenue reserve €'000	Total €'000
Balance at 31 December 2021	4,309	225,792	178,207	63,258	15,939	487,505
Share issue	408	44,513	-	-	-	44,921
Share issue costs	-	(736)	-	-	-	(736)
Total comprehensive return for the period	-	-	-	11,361	8,182	19,543
Interim distributions paid	-	-	-	-	(11,624)	(11,624)
Balance at 30 June 2022	4,717	269,569	178,207	74,619	12,497	539,609

Six months ended 30 June 2021 (unaudited)

Balance at 31 December 2020	2,756	61,691	185,661	31,768	11,720	293,596
Share Issue	214	22,325	-	-	-	22,539
Share Issue costs	-	(225)	-	-	-	(225)
Total comprehensive return for the period	-	-	-	9,951	6,312	16,263
Interim distributions paid	-	-	(3,293)	-	(3,862)	(7,155)
Balance at 30 June 2021	2,970	83,791	182,368	41,719	14,170	325,018

Year ended 31 December 2021 (audited)

Balance at 31 December 2020	2,756	61,691	185,661	31,768	11,720	293,596
Share Issue	1,553	166,924	-	-	-	168,477
Share Issue costs	-	(2,823)	-	-	-	(2,823)
Total comprehensive return for the year	-	-	-	31,490	12,953	44,443
Dividends paid	-	-	(7,454)	-	(8,734)	(16,188)
Balance at 31 December 2021	4,309	225,792	178,207	63,258	15,939	487,505

The accompanying notes are an integral part of the Financial Statements.

Condensed Consolidated Cash Flow Statement

Notes		1 January to 30 June 2022 Unaudited €'000	1 January to 30 June 2021 Unaudited €'000	1 January to 31 December 2021 Audited €'000
CASH FLOWS FROM OPERATING ACTIVITIES
Net gain for the period before taxation		24,273	21,486	55,388
Adjustments for:
Gains on investment properties	8	(15,676)	(15,290)	(41,031)
Land leasehold liability decreases		134	132	265
Increase in operating trade and other receivables		(1,669)	(6,534)	(9,088)
(Decrease)/increase in operating trade and other payables		(4,503)	(207)	2,939
Finance costs	3	1,687	1,373	3,449
Tax paid		(361)	(314)	(473)
Cash generated by operations		3,885	646	11,449
Net cash inflow from operating activities		3,885	646	11,449
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of investment properties		962	(28,490)	(193,475)
Derivative financial instruments		109	(51)	(83)
Net cash inflow/(outflow) from investing activities		1,071	(28,541)	(193,558)
CASH FLOWS FROM FINANCING ACTIVITIES
Dividends paid		(11,624)	(7,155)	(16,188)
Bank loans interest paid		(1,108)	(806)	(1,311)
Bank loans drawn		-	19,500	68,860
Bank loans repaid		(15,500)	-	(36,500)
Proceeds from share issue		44,921	22,539	168,477
Issue costs relating to share issue		(736)	(225)	(2,823)
Net cash inflow from financing activities		15,953	33,853	180,515
Net increase/(decrease) in cash and cash equivalents		20,909	5,958	(1,594)
Opening balance		23,280	24,874	24,874
Closing cash and cash equivalents	10	44,189	30,832	23,280
REPRESENTED BY
Cash at bank		44,189	30,832	23,280

The accompanying notes are an integral part of the Financial Statements.

Notes to the Financial Statements

1.  Accounting Policies

The Unaudited Condensed Consolidated Financial Statements have been prepared in accordance with International Financial Reporting Standard ("IFRS") IAS 34 'Interim Financial Reporting' and are consistent with the accounting policies set out in the statutory accounts of the Group for the year ended 31 December 2021.

The Unaudited Condensed Consolidated Financial Statements for the six months ended 30 June 2022 do not include all of the information required for a complete set of IFRS financial statements and should be read in conjunction with the Consolidated Financial Statements of the Group for the year ended 31 December 2021. These were prepared in accordance with IFRS, which comprises standards and interpretations approved by the International Accounting Standards Board ('IASB'), and International Accounting Standards and Standing Interpretations Committee interpretations approved by the International Accounting Standards Committee ('IASC') that remain in effect, and to the extent that they have been adopted by the United Kingdom, and the Listing Rules of the UK Listing Authority.. The financial information in this Report does not comprise statutory accounts within the meaning of Section 434 - 436 of the Companies Act 2006. Those financial statements have been delivered to the Registrar of Companies and included the report of the auditor which was unqualified and did not contain a statement under either section 498(2) or 498(3) of the Companies Act 2006. The financial information for the six months ended 30 June 2022 and 30 June 2021 has not been audited or reviewed by the Company's auditor.

2.  Revenue

	Half year ended 30 June 2022 Unaudited €'000	Half year ended 30 June 2021 Unaudited €'000	Year ended 31 December 2021 Audited €'000
Rental income	13,593	11,121	23,283
Property service charge income	2,777	1,648	3,435
Other income	383	201	219
Total revenue	16,753	12,970	26,937

Included within rental income is amortisation of rent free periods granted.

3.  Finance Costs

	Half year ended 30 June 2022 Unaudited €'000	Half year ended 30 June 2021 Unaudited €'000	Year ended 31 December 2021 Audited €'000
Interest on bank loans	1,342	1,046	2,587
Bank interest	195	205	606
Amortisation of loan costs	150	122	256
Total finance costs	1,687	1,373	3,449

4.  Taxation

(a) Tax charge in the Group Statement of Comprehensive Income

	Half year ended 30 June 2022 Unaudited			Half year ended 30 June 2021 Unaudited			Year ended 31 December 2021 Audited
	Revenue €'000	Capital €'000	Total €'000	Revenue €'000	Capital €'000	Total €'000	Revenue €'000	Capital €'000	Total €'000
Current taxation:
Overseas taxation	367	-	367	391	-	391	651	-	651
Deferred taxation:
Overseas taxation	-	4,363	4,363	-	4,832	4,832	-	10,294	10,294
Total taxation	367	4,363	4,730	391	4,832	5,223	651	10,294	10,945

(b) Tax in the Group Balance Sheet

	As at 30 June 2022 Unaudited	As at 30 June 2021 Unaudited	As at 31 December 2021 Audited
	Total €'000	Total €'000	Total €'000
Deferred tax assets: On tax losses On other temporary differences	2,655 338	712 369	2,828 150
	2,993	1,081	2,978

	As at 30 June 2022 Unaudited	As at 30 June 2021 Unaudited	As at 31 December 2021 Audited
	Total €'000	Total €'000	Total €'000
Deferred tax liabilities: Differences between tax and property revaluation	31,941	20,204	27,563
Total taxation on return	31,941	20,204	27,563

5.  Distributions

	30 June 2022Unaudited €'000
2021 Fourth interim dividend of 1.21p per Share paid 25 March 2022	5,812
2022 First interim dividend of 1.19p per Share paid 24 June 2022	5,812
Total dividend paid	11,624

A fourth quarterly interim dividend for 2021 of 1.21p per share was paid on 25 March 2022 to shareholders on the register on 4 March 2022. The distribution was split 1.01p dividend income and 0.20p qualifying interest income.

A first quarterly interim dividend for 2022 of 1.19p per share was paid on 24 June 2022 to shareholders on the register on 6 June 2022. The distribution was split 0.86p dividend income and 0.33p qualifying interest income.

6.  Earnings Per Share (Basic and Diluted)

	30 June 2022 Unaudited	30 June 2021 Unaudited	31 December 2021 Audited
Revenue net return attributable to ordinary shareholders (€'000)	8,182	6,312	12,953
Weighted average number of shares in issue during the period	405,685,155	255,406,907	288,114,820
Total revenue return per ordinary share	2.02¢	2.47¢	4.50¢
Capital return attributable to ordinary shareholders (€'000)	11,361	9,951	31,490
Weighted average number of shares in issue during the period	405,685,155	255,406,907	288,114,820
Total capital return per ordinary share	2.80¢	3.90¢	10.93¢
Total return per ordinary share	4.82¢	6.37¢	15.43¢

Earnings per Share is calculated on the revenue and capital return for the period and is calculated using the weighted average number of Shares in the period.

7.  Net Asset Value Per Share

	30 June 2022 Unaudited	30 June 2021 Unaudited	31 December 2021 Audited
Net assets attributable to shareholders (€'000)	539,609	325,018	487,505
Number of shares in issue	412,174,356	262,950,001	377,628,901
Net asset value per share (€)	1.31	1.24	1.29

8.  Investment Properties

	30 June 2022Unaudited €'000	30 June 2021Unaudited €'000	31 December 2021 Audited €'000
Opening carrying value	683,878	448,418	448,418
Purchase at cost and capital expenditure	(1,091)	28,572	194,429
Gains on revaluation to fair value	15,676	15,290	41,031
Total carrying value	698,463	492,280	683,878

The fair value of investment properties amounted to €680,391,000. The difference between the fair value and the value per the Consolidated Balance Sheet at 30 June 2022 consists of accrued income relating to the pre-payment for rent-free periods recognised over the life of the lease, and a lease asset relating to future use of the leasehold at Den Hoorn. These total €4,699,000 and €22,771,000 respectively. The rent incentive balance is recorded separately in the financial statements as a current asset, and the lease asset is offset by an equal and opposite lease liability.

The purchase cost of €1,091,000 includes a true up receipt of €1,210,000 in the purchase price of Madrid Phase 1 to 3 and capitalised expenses of €119,000.

9.  Trade and Other Receivables

	30 June 2022Unaudited €'000	30 June 2021Unaudited €'000	31 December 2021 Audited €'000
Trade debtors	7,718	4,274	5,549
VAT receivable	265	6,590	591
Lease incentives	4,699	4,658	5,035
Other receivables	23	-	-
Total receivables	12,705	15,522	11,175

10.  Cash and Cash Equivalents

	30 June 2022Unaudited €'000	30 June 2021Unaudited €'000	31 December 2021 Audited €'000
Cash at bank	44,189	30,832	23,280
Total cash and cash equivalents	44,189	30,832	23,280

11. Leasehold Liability

	30 June 2022Unaudited €'000	30 June 2021Unaudited €'000	31 December 2021 Audited €'000
Maturity analysis - contractual undiscounted cash flows
Less than one year	550	550	550
One to five years	2,201	2,201	2,201
More than five years	25,339	25,753	25,615
Total undiscounted lease liabilities	28,090	28,504	28,366
Lease liability included in the Consolidated Balance Sheet
Current	550	550	550
Non - Current	22,221	22,487	22,355
Total lease liability included in the Consolidated Balance Sheet	22,771	23,037	22,905

12.  Trade and Other Payables

	30 June 2022Unaudited €'000	30 June 2021Unaudited €'000	31 December 2021 Audited €'000
Rental income received in advance	2,700	1,517	1,964
Accrued acquisition and development costs	146	147	41
Management fee payable	2,023	622	931
VAT payable	761	972	643
Accruals	1,146	1,346	2,850
Trade creditors	3,423	2,711	5,164
Tenant deposits	2,730	1,465	2,873
Total payables	12,929	8,780	14,466

13.  Bank Loans

	30 June 2022 Unaudited €'000	30 June 2021 Unaudited €'000	31 December 2021 Audited €'000
External bank loans payable in less than 12 months	-	19,500	15,500
External bank loans payable in greater than 12 months	160,552	143,453	160,447
Total payables	160,552	162,953	175,947

The total drawdown of the bank loans amounted to €161,600,000. The difference between the external loans drawdowns and the value per the condensed consolidated balance sheet consists of financing fees and their amortised portion related to the external bank loans totaling €1,048,000. It is recorded in the financial statements in the same line as bank loans.

14.  Share Capital

	30 June 2022 Unaudited €'000	30 June 2021 Unaudited €'000	31 December 2021 Audited €'000
Opening balance	4,309	2,756	2,756
Ordinary shares issued	408	214	1,553
Closing balance	4,717	2,970	4,309

Ordinary Shareholders participate in all general meetings of the Company on the basis of one vote for each Share held. Each Ordinary share has equal rights to dividends and equal rights to participate in a distribution arising from a winding up of the Company. The Ordinary Shares are not redeemable.

The group commenced the year with 377,628,901 Ordinary shares in issue. On 4 February 2022, the Group increased its share capital by the issue of 34,545,455 new shares at £1.10 per share. The number of Ordinary shares in issue at 30 June 2022 was 412,174,356. The nominal value of each share is £0.01.

15.  Financial Instruments and Investment Properties

Fair value hierarchy

IFRS 13 requires the Group to classify its financial instruments held at fair value using a hierarchy that reflects the significance of the inputs used in the valuation methodologies. These are as follows:

Level 1 - quoted prices in active markets for identical investments;

Level 2 - other significant observable inputs (including quoted prices for similar investments, interest rates, prepayments, credit risk, etc.); and

Level 3 - significant unobservable inputs.

The following table shows an analysis of the fair values of investment properties recognised in the balance sheet by level of the fair value hierarchy:

	Level 1 €'000	Level 2 €'000	Level 3 €'000	Total fair value €'000
30 June 2022 Investment properties	-	-	698,463	698,463

30 June 2021 Investment properties	-	-	492,280	492,280
31 December 2021 Investment properties	-	-	683,878	683,878

The lowest level of input is the underlying yields on each property which is an input not based on observable market data.

The following table shows an analysis of the fair values of derivative financial instruments recognised in the balance sheet by level of the fair value hierarchy:

	Level 1 €'000	Level 2 €'000	Level 3 €'000	Total fair value €'000
30 June 2022 Derivative financial instruments	-	-	-	-

30 June 2021 Derivative financial instruments	-	77	-	77
31 December 2021 Derivative financial instruments	-	109	-	109

The lowest level of input is EUR:GBP exchange rate.

The Company used forward foreign exchange contracts to mitigate potential volatility of income returns and to provide greater certainty as to the level of Sterling distributions expected to be paid in respect of the period covered by the relevant currency hedging instrument. Derivatives are measured at fair value calculated by reference to forward exchange rates for contracts with similar maturity profiles.

16.  Related Party Transactions

The Company's Alternative Investment Fund Manager ('AIFM') throughout the period was abrdn Fund Managers Limited ('aFML'). Under the terms of a Management Agreement dated 17 November 2017 the AIFM is appointed to provide investment management, risk management and general administrative services including acting as the Company Secretary. The agreement is terminable by either the Company or aFML on not less than 12 months' written notice.

Under the terms of the agreement portfolio management services are delegated by aFML to abrdn Investments Ireland Limited ("aIIL"). The total management fees charged to the Consolidated Statement of Comprehensive Income during the period were €2,017,000 and €2,023,000 was payable at the period end. Under the terms of a Global Secretarial Agreement between aFML and Aberdeen Asset Management PLC ("AAM PLC"), company secretarial services are provided to the Company by AAM PLC.

The Directors of the Company received fees for their services totaling €94,000.

17.  Post Balance Sheet Events

On 7 July 2022 , the Group entered into an agreement with ING Bank N.V for a loan facility of €40 million secured against Phases 1 to 3 of its Spanish Madrid portfolio for a three year term at an all-in interest rate of 2.57%.

On 28 July 2022, the Group acquired two logistics properties, in Bordeaux and Niort, France. The aggregate purchase price of €23 million reflects a net initial yield of 4%.

On 10 August 2022, the Group 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 and a yield of 5%.

A second quarterly interim dividend for 2022 of 1.20p per Share was paid on 23 September 2022 toshareholders on theregister on 2 September 2022. The distribution was split 0.95p dividend income and 0.25p qualifying interest income.

18.  Ultimate Parent Company

In the opinion of the Directors on the basis of shareholdings advised to them, the Company has no immediate or ultimate controlling party.

19.  Half Yearly Report

This Half Yearly Report was approved by the Board and authorised for issue on 27 September 2022.

The Half Yearly Report will be printed and issued to shareholders and further copies will be available at Bow Bells House, 1 Bread Street, London EC4M 9HH and on the Company's website eurologisticsincome.co.uk*

* Neither the Company's website nor the content of any website accessible from hyperlinks on it (or any other website) is (or is deemed to be) incorporated into, or forms (or is deemed to form) part of this announcement.

By order of the Board

ABERDEEN ASSET MANAGEMENT PLC, SECRETARY

27 September 2022

Glossary of Terms and Definitions and Alternative Performance Measures

abrdn			The brand of the investment businesses of abrdn plc
abrdn plc group			The abrdn plc group of companies
AIC			Association of Investment Companies
AIC SORP			Association of Investment Companies Statement of Recommended Practice: Financial Statements of Investment Trust Companies and Venture Capital Trusts, issued November 2014 and updated February 2018
AIFMD			The Alternative Investment Fund Managers Directive
AIFM			The alternative investment fund manager, being aFML
Alternative Performance Measures			Alternative performance measures are numerical measures of the Company's current, historical or future performance, financial position or cash flows, other than financial measures defined or specified in the applicable financial framework. The Company's applicable financial framework includes IFRS and the AIC SORP
Annual Rental Income			Cash rents passing at the Balance Sheet date
aFML or AIFM or Manager			abrdn Fund Managers Limited
aIIL or the Investment Manager			abrdn Investments Ireland Limited is a wholly owned subsidiary of abrdn plc and acts as the Company's investment manager
Asset Cover			The value of a company's net assets available to repay a certain security. Asset cover is usually expressed as a multiple and calculated by dividing the net assets available by the amount required to repay the specific security
Contracted Rent			The contracted gross rent receivable which becomes payable after all the occupier incentives in the letting have expired
Covenant Strength			This refersto the quality of a tenant's financial status and its ability to perform the covenants in a lease
Dividend Cover (Defined as an Alternative Performance Measure)			The ratio of the Company's net profit after tax (excluding the below items) to the dividends paid
	1 January to 30 June 2022 1 January to 31 December 2021 Earnings per IFRS income statement 19,543 44,443 Adjustments to calculate dividend cover: Net changes in the value of investment property (15,676) (41,031) Deferred Taxation 4,363 10,294 Effects of foreign exchange differences (564) (1,017) Profits (A) 7,666 12,689 Dividend (B) 11,624 16,188 Dividend Cover (A)/(B) 65.9% 78.4%
Discount				The amount by which the market price per share of an investment trust is lower than the net asset value per share. The discount is normally expressed as a percentage of the NAV per share. The opposite of a discount is a premium.
		Half year ended 30 June 2022			Year ended 31 December 2021
Share price (A)		99.6p			117.0p
NAV (B)		112.4p			108.5p
(Discount)/Premium (A-B)/B		(11.4)%			7.8%

Earnings Per Share	Profit for the period attributable to shareholders divided by the average number of shares in issue during the period
EPRA	European Public Real Estate Association
EPRA Earnings per Share	Earnings per share calculated in line with EPRA best practice recommendations

	30 June 2022 €'000	31 December 2021 €'000
Earnings per IFRS income statement	19,543	44,443
Adjustments to calculate EPRA Earnings, exclude:
Net changes in value of investment properties	(15,676)	(41,031)
Deferred tax	4,378	11,847
Changes in fair value of financial instruments	109	(83)
EPRA Earnings	8,354	15,176
Weighted average basic number of shares ('000)	405,685	288,115
EPRA Earnings per share (euro cents per share)	2.06c	5.27c

EPRA Net Asset Value Metrics		A set of standardised NAV metrics prepared in compliance with EPRA best practice recommendations
	30 June 2022 €'000		31 December 2021 €'000
IFRS NAV	539,609		487,505
Exclude: Fair value of financial	-		109
instruments Deferred tax adjustment in	31,941		27,563
relation to fair value gain on investment property
Shares in issue at period	571,550		515,177
end ('000)	412,174		377,629
EPRA NAV (Net Tangible Assets) per share (euro cents per share)	138.7c		136.4c
ERV		The estimated rental value of a property, provided by the property valuers
Europe		The member states of the European Union, the European Economic Area ("EEA") and the members of the European Free Trade Association ("EFTA") (and including always the United Kingdom, whether or not it is a member state of the European Union, the EEA or a member of EFTA)
Green Leases		Agreements between a landlord and a tenant as to how a building is to be occupied, operated and managed in a sustainable way
Group		The Company and its subsidiaries
Gross Assets		The aggregate value of the total assets of the Company as determined in accordance with the accounting principles adopted by the Company from time to time
FRC		Financial Reporting Council
IFRS		International Financial Reporting Standards
Index Linked		The practice of linking the review of a tenant's payments under a lease to a published index, most commonly the Retail Price Index (RPI) but also the Consumer Price Index (CPI) and French Tertiary Activities Rent Index (ILAT)
Key Information Document or KID		The Packaged Retail and Insurance-based Investment Products (PRIIPS) Regulation requires the Manager, as the Company's PRIIP "manufacturer," to prepare a key information document ("KID") in respect of the Company. This KID must be made available by the AIFM to retail investors prior to them making any investment decision and is available via the Company's website. The Company is not responsible for the information contained in the KID and investors should note that the procedures for calculating the risks, costs and potential returns are prescribed by law. The figures in the KID may not reflect the expected returns for the Company and anticipated performance returns cannot be guaranteed
Lease incentive		A payment used to encourage a tenant totake on a new lease, for example by a landlord paying a tenant a sum of money to contribute to the cost of a tenant's fit-out of a property or by allowing a rent free period
Leverage		For the purposes of the Alternative Investment Fund Managers Directive, leverage is any method which increases the Company's exposure, including the borrowing of cash and the use of derivatives. It is expressed as a ratio between the Company's exposure and its net asset value and can be calculated on a gross and a commitment method. Under the gross method, exposure represents the sum of the Company's positions after the deduction of sterling cash balances, without taking into account any hedging and netting arrangements. Under the commitment method, exposure is calculated without the deduction of sterling cash balances and after certain hedging and netting positions are offset against each other . At period end the loan to value was 21.7%
Loan to Value		Calculated as gross external bank borrowings dividend by total assets

	As at 30 June 2022	As at 31 December 2021
Bank Loans	€161.6m	€177.1m
Gross Assets	€767.8m	€728.4m
Exclude IFRS 16 right of use asset	(€22.8m)	(€22.9m)
Gearing	€745.0m 21.7%	€705.5m 25.1%

NAV Total Return		The return to shareholders, expressed as a percentage of opening NAV, calculated on a per share basis by adding dividends paid in the period to the increase or decrease in NAV. Dividends are assumed to have been reinvested on the ex dividend date, excluding transaction costs
	Half year ended 30 June 2022		Year ended 31 December 2021
Opening NAV	129.1c		120.1c
Movement in NAV	1.8c		9.0c
Closing NAV	130.9c		129.1c
% increase in NAV	1.4%		7.5%
Impact of reinvested dividends	2.2%		4.9%
NAV total return	3.6%		12.4%

Net Asset Value or NAV	The value of total assets less liabilities. Liabilities for this purpose include current and long-term liabilities. The net asset value divided by the number of shares in issue produces the net asset value per share
Ongoing Charges	Ratio of expenses as a percentageofaveragedailyshareholders'fundscalculated as per the industrystandard
Passing Rent	The rent payable at a particular point in time
PIDD	The pre-investment disclosure document made available by the AIFM in relation to the Company
Premium	The amount by which the market price per share of an investment trust exceeds the net asset value per share. The premium is normally expressed as a percentage of the net asset value per share. The opposite of a premium is a discount
Prior Charges	The name given to all borrowings including long and short term loans and overdrafts that are to be used for investment purposes, reciprocal foreign currency loans, currency facilities to the extent that they are drawn down, index-linked securities, and all types of preference or preferred capital, irrespective of the time until repayment
Portfolio fair value	The market value of the company's property portfolio, which is based on the external valuation provided by Savills (UK) Limited
The Royal Institution of Chartered Surveyors (RICS)	The global professional body promoting and enforcing the highest international standards in the valuation, management and development of land, real estate construction and infrastructure
Share Price Total Return	The return to shareholders, expressed as a percentage of opening share price, calculated on a per share basis by adding dividends paid in the period to the increase or decrease in share price. Dividends are assumed to have been reinvested on the ex dividend date, excluding transaction costs

Half year ended 30 June 2022 Year ended 31 December 2021 Opening Share Price 117.0p 108.5p Movement in share price (17.4)p 8.5p Closing share price 99.6p 117.0p %(decrease)/increase in share price (14.9)% 7.8% Impact of reinvested dividends 2.0% 4.6% Share price total return (12.9)% 12.4%

SPA	Sale and purchase agreement
SPV	Special purpose vehicle
Total Assets	Total assets less current liabilities (before deducting prior charges as defined above)
WAULT	Weighted Average Unexpired Lease Term. The average time remaining until the next lease expiry or break date

 

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