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Abrdn Euro Logistics (ASLI)

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Wednesday 12 January, 2022

Abrdn Euro Logistics

Proposed Placing Under Share Issuance Programme

RNS Number : 1367Y
Abrdn European Logistics Income PLC
12 January 2022
 

THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO, THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, THE REPUBLIC OF SOUTH AFRICA OR ANY MEMBER STATE OF THE EUROPEAN ECONOMIC AREA (WITH THE EXCEPTION OF THE REPUBLIC OF IRELAND AND THE NETHERLANDS) OR INTO ANY OTHER JURISDICTION WHERE TO DO SO MIGHT CONSTITUTE A VIOLATION OR BREACH OF ANY APPLICABLE LAW. PLEASE SEE THE IMPORTANT NOTICE AT THE END OF THIS ANNOUNCEMENT.

This announcement has been determined to contain inside information for the purposes of the Market Abuse Regulation (EU) No.596/2014.

 

 

12 January 2022

 

abrdn European Logistics Income plc

 

Proposed Placing under the Company's Share Issuance Programme

 

The Board of abrdn European Logistics Income plc (the "Company" or "ASLI") announces that, following the December 2021 acquisition of the Madrid last-mile logistics portfolio for €227 million and the resultant deployment of the £125 million over-subscribed September equity raise, the Company is launching a Placing under the Company's Share Issuance Programme at a price of 110 pence per new Ordinary Share (the "Placing") in order to meet expected near-term funding requirements and to take advantage of further pipeline opportunities.

 

Highlights:

 

· Placing of new Ordinary Shares at a price of 110 pence per new Ordinary Share (the "Placing Price"), representing:

 

a discount of 1.8 per cent. to the closing mid-market Ordinary Share price of 112 pence as at 11 January 2022; and

 

a premium of 4.0 per cent. to the Company's 30 September 2021 Sterling Net Asset Value per Ordinary Share of 105.8 pence¹

 

· Having received the updated Q4 independent portfolio valuation, the Investment Manager estimates that the Company's net asset value has increased by approximately 1.5 per cent. over the three months to 31 December 2021²

 

· Investors in the Placing will be entitled to receive the Company's fourth interim dividend in respect of the three months to 31 December 2021, which is expected to be declared in February 2022

 

· The net proceeds of the over-subscribed £125 million equity issue in September 2021 were fully deployed in December to part-fund the €227 million acquisition of the Madrid last-mile logistics portfolio. Following this acquisition, the Company's portfolio comprises gross assets of approximately €746 million diversified across 24 urban logistics and mid-box warehouses with excellent sustainability credentials, located in five high growth European countries³

 

· The Investment Manager is currently in exclusivity on four assets with an aggregate value of approximately €49 million, which are located in France and the Netherlands. Together with the drawn revolving credit facility, the Q2 2022 funding requirement for Phase IV of the Madrid portfolio acquisition and a pre-let expansion of the Company's Waddinxveen asset, the Company has a near-term funding requirement of approximately €142 million

 

· The Company will also be offering private investors the opportunity to subscribe for new Ordinary Shares at the Placing Price, via PrimaryBid (the "Retail Offer")

 

Tony Roper, Chairman of the Company said:

 

"The Investment Manager's swift deployment of September's equity raise into the Amazon-anchored, last-mile logistics portfolio in Madrid again proved its origination and execution capabilities and was a significant development for the Company. This is a high-quality, newly-constructed portfolio in a fast growing and dominant submarket, which further adds to the Company's sector-leading sustainability credentials.

 

"The Company's modern portfolio of 24 urban and mid-box logistics assets offers a compelling investment proposition, with strong inflation-linked income. The Investment Manager's Europe-wide presence and local knowledge continues to provide the Company with a pipeline of attractive investment opportunities and we look forward to the additional scale and diversification benefits which this Placing will afford."

 

Evert Castelein, abrdn Investment Manager, commented:

 

"2021 was a standout year for European logistics real estate with record levels of take-up across the first nine months of the year. Over the same period, investment volumes were up 64 per cent. year-on-year and were double the 5 year Q1-Q3 average, with vacancy rates remaining at record lows. Near term supply chain issues coupled with structural consumer behaviour shifts will continue to drive demand and with Continental Europe lagging the UK in terms of e-commerce penetration, it provides an excellent backdrop for further demand growth.

 

"In 2021, we deployed €274 million of capital into ten high-quality logistics assets, nine of which were last-mile logistics warehouses, the sub sector which we believe offers the strongest rental growth potential. This Placing will help fund the next stage of the Company's growth and we are confident of providing shareholders with the continued strong performance achieved to date".

 

Background to the Placing

 

The Company launched in December 2017, with the investment objective of providing an attractive level of income return and capital growth from investing in high quality mid-box and urban logistics real estate in Continental Europe. An investment in the Company today offers the following attractive characteristics:

 

· Exposure to a portfolio of 24 high-quality European logistics real estate assets, diversified across five countries and valued at €746 million³. The portfolio comprises 13 urban logistics warehouses and 11 mid-box logistics warehouses, with 18 of the Company's 24 assets constructed since 2018

 

· A tenant base diversified across 50 tenants, consisting predominantly of third-party logistics providers, e-commerce and grocery-focused vendors. Following the completion of Phase IV of the Madrid portfolio in Q2 2022, Amazon is due to become the Company's largest tenant by rental income (10 per cent.)

 

· Approximately two thirds of the Company's rental income is subject to uncapped annual CPI/ILAT inflation linkage, with 28 per cent. subject to capped inflation linkage and the remainder subject to threshold inflation linkage

 

· A strong focus on sustainability, demonstrated by the Company's sector-leading GRESB rating and four out of five stars awarded for 2021. Rooftop solar PV systems are installed on ten of the portfolio assets, with active discussions underway to increase this number

 

· A Net Asset Value total return of 30.4 per cent. since IPO in December 2017 and 17.5 per cent. in the 12 months to 30 September 2021 (both in Euro terms). From IPO to 31 December 2021, the Company has delivered a total shareholder return of 39.2 per cent⁴

 

· During 2021, the Investment Manager deployed approximately €274 million into 10 assets, including:

 

A mid-box warehouse located on the Bosch-Siemens campus in direct proximity to an intermodal container terminal on Europe's railway link to China, in Lodz, Poland for €28 million

 

A newly-built last-mile logistics warehouse in the first ring of Barcelona, let to Mediapost, a subsidiary of the French state-backed La Poste Group, for €18.8 million

 

A portfolio of eight newly-built last-mile logistics warehouses with excellent sustainability credentials, located in the first ring of Madrid, for an acquisition price of €227 million. Amazon will represent 43 per cent of the total agreed rental income for this portfolio  

 

 

Use of Placing Proceeds

 

The Company currently has an expected near-term funding requirement of approximately €142 million, comprising the following:

 

· Drawings of €15.5 million under the Company's revolving credit facility, following the acquisition of Phases I-III of the Madrid portfolio

 

· Construction of Phase IV of the Madrid portfolio, comprising the last-mile warehouse and delivery van parking station let to Amazon for a period of 25 years, is due to complete in Q2 2022. Additionally in Q2, the Company will fund a 2,900 sq. m. extension to the Waddinxveen asset in the Netherlands on a pre-let basis to the current tenant, Combilo, at an attractive yield-on-cost. The aggregate funding requirement for these two assets is approximately €78 million   

 

· The Investment Manager is at an advanced stage of due diligence on four assets, a mix of urban logistics and mid box distribution properties, currently under exclusivity. Three assets are located in France, on long-term leases with a French national third-party logistics provider, and one asset is located in the Netherlands let to a well-established food focused operator. All four assets currently have very low site coverage; and the Investment Manager anticipates attractive medium-term asset management opportunities, while benefiting from inflation-linked rental income. The aggregate funding requirement for these four assets is approximately €49 million⁵

 

The Investment Manager is concurrently performing due diligence on a further, early-stage pipeline of acquisition opportunities predominantly sourced by abrdn's local transaction teams.  

Estimated Unaudited 31 December 2021 Net Asset Value Uplift

Subsequent to the 31 December 2021 year end, the Company has received the independent portfolio valuation for Q4 2021, with continued positive momentum observed in the portfolio performance. The Investment Manager estimates that the Company's net asset value has increased by approximately 1.5 per cent. over the three months since 30 September 2021. This is an initial approximation and the final audited 31 December 2021 net asset value will be provided in the Company's annual results, expected to be announced in April 2022. An unaudited net asset value as at 31 December 2021 will be announced later in Q1 2022.  

The Placing

The Company is undertaking the Placing under its existing Share Issuance Programme (pursuant to the terms of the Company's tri-partite prospectus (consisting of a summary, securities note and registration document each dated 8 September 2021, together the "Prospectus")) at a Placing Price of 110 pence per Ordinary Share.

The Placing Price represents a discount of 1.8 per cent. to the closing price of 112 pence per Ordinary Share on 11 January 2022 and a premium of 4.0 per cent. to the 30 September 2021 Sterling NAV per Ordinary Share of 105.8 pence¹.

Investors who participate in the Placing will be entitled to all dividends declared following admission of the new Ordinary Shares (including, but not limited to, the fourth interim dividend for the period ended 31 December 2021, expected to be declared in February 2022).

In addition, the Company will also be offering private investors the opportunity to subscribe for new Ordinary Shares, via PrimaryBid. A separate announcement will be made regarding the Retail Offer and its terms.

Further Details

Investec Bank plc ("Investec") is acting as sole sponsor and bookrunner to the Company in connection with the Placing. Investec will today commence a bookbuild process in respect of the Placing of new Ordinary Shares at the Placing Price. The Placing will be non-pre-emptive pursuant to the terms set out in the Prospectus and is expected to close no later than 2.00 p.m. GMT on Tuesday, 1 February 2022 but may be closed earlier or later at the absolute discretion of Investec and the Company.

The Placing is conditional, inter alia, on the Ordinary Shares being admitted to listing on the premium listing segment of the Official List of the FCA, and to trading on the main market for listed securities of the London Stock Exchange (together, "Admission"). Subject to Admission becoming effective, it is expected that settlement of subscriptions by placees in respect of the Ordinary Shares and trading in the Ordinary Shares will commence at 8.00 a.m. GMT on 4 February 2022, or such later time and/or date as may be announced by the Company after the close of the Placing.

The Placing is not underwritten. The Placing may be scaled back by the Company for any reason, including where it is necessary to scale back allocations to ensure the net proceeds of the Placing align with the Company's post fundraise acquisition targets. Details of the number of Ordinary Shares to be issued pursuant to the Placing will be determined by the Board (following consultation with Investec and the Investment Manager) and will be announced as soon as practicable after the close of the Placing.

By choosing to participate in the Placing and by making an oral and legally binding offer to subscribe for Ordinary Shares, investors will be deemed to have read and understood this Announcement and the Prospectus in their entirety and to be making such offer on the terms and subject to the conditions of the Placing (a 'Placing-Only Issue' under the Share Issuance Programme) in Part 6 of the securities note published by the Company dated 8 September 2021 and forming part of the Prospectus and to be providing the representations, warranties and acknowledgements contained therein.

A copy of the Prospectus is available on National Storage Mechanism at: https://data.fca.org.uk/a/nsm/nationalstoragemechanism as well as on the Company's website at www.eurologisticsincome.co.uk .

Expected Timetable

Placing Opens

12 January 2022

Latest time and date for applications under the Placing

2.00 p.m. on 1 February 2022

Result of Placing Announced

7.00 a.m. on 2 February 2022

Admission and commencement of dealings in New Ordinary Shares

8.00 a.m. on 4 February 2022

The dates and times specified above are subject to change. In particular, the Directors may (with the prior approval of Investec) bring forward or postpone the closing time and date for the Placing. In the event that a date or time is changed, the Company will notify persons who have applied for Ordinary Shares by post, by electronic mail or by the publication of a notice through a Regulatory Information Service.

References to all times are to London times unless otherwise stated

Unless otherwise defined, capitalised terms used in this Announcement shall have the same meaning as set out in the Prospectus.

 

LEI: 213800I9IYIKKNRT3G50

For further information:

Aberdeen Standard Fund Managers Limited           +44 (0) 20 7463 6000

Evert Castelein

Luke Mason

Gary Jones

 

Investec Bank plc    +44 (0) 20 7597 4000

David Yovichic, Denis Flanagan (Corporate Finance)

 

Dominic Waters, Will Barnett, Neil Brierley, Jack Kershaw, Alice Douglas (Sales)

 

FTI Consulting     +44 (0) 20 3727 1000

Dido Laurimore

Richard Gotla

James McEwan

 

¹ Applying a GBP/EUR exchange rate of £1/€1.1978 as at 11 January 2022, to the 30 September 2021 Euro net asset value per Ordinary Share of 126.7c

² This 1.5 per cent. estimated uplift is an initial approximation and the final audited 31 December 2021 net asset value will be announced in the Company's annual results, expected in April 2022 

³ Calculated using the 31 December 2021 independent portfolio valuation and including the acquisition cost of Phase IV of the Madrid portfolio expected to complete in Q2 2022

Total shareholder return calculated using the share price performance since IPO on 15 December 2017, taking into account dividends paid to shareholders (assuming dividends paid to shareholders are reinvested in the shares at the time the shares are quoted ex dividend)

The potential investments comprised in the Investment Manager's pipeline from time to time include transactions at various stages of consideration by the Investment Manager. There is no certainty that any of the potential investments in the Investment Manager's pipeline as at the date of this Announcement will be completed or will be invested in by the Company

 

Important Information

This Announcement is an advertisement and does not constitute a prospectus and investors must subscribe for or purchase any Ordinary Shares referred to in this Announcement only on the basis of information contained in the Prospectus and not in reliance on this Announcement. Copies of the Prospectus are, subject to any applicable law, available for viewing at the National Storage Mechanism at https://data.fca.org.uk/#/nsm/nationalstoragemechanism and on the Company's website.

This Announcement is not an offer to sell or a solicitation of any offer to buy the Ordinary Shares in the Company in the United States, Australia, Canada, the Republic of South Africa, Japan, or any member state of the EEA (with the exception of the Republic of Ireland and the Netherlands) or in any other jurisdiction where such offer or sale would be unlawful.

This communication is not for publication or distribution, directly or indirectly, in or into the United States of America. This communication is not an offer of securities for sale into the United States. The securities referred to herein have not been and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States, except pursuant to an applicable exemption from registration. No public offering of securities is being made in the United States.

The Company has not been and will not be registered under the US Investment Company Act of 1940 (the "Investment Company Act") and, as such, holders of the Company's securities will not be entitled to the benefits of the Investment Company Act.  No offer, sale, resale, pledge, delivery, distribution or transfer of the Company's securities may be made except under circumstances that will not result in the Company being required to register as an investment company under the Investment Company Act.

In the United Kingdom, this communication is being distributed only to, and is directed only at, qualified investors as defined under Article 2 of the Prospectus Regulation: (i) who have professional experience in matters relating to investments who fall within the definition of "investment professional" in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "Order"), or (ii) who are high net worth companies, unincorporated associations and partnerships and trustees of high value trusts as described in Article 49(2) of the Order, and (iii) other persons to whom it may otherwise lawfully be communicated (all such persons together being referred to as "relevant persons").  Any investment or investment activity to which this communication relates is available only to and will only be engaged in with such persons. For the purposes of this provision the expression "Prospectus Regulation" means the UK version of Regulation (EU) 2017/1129 of the European Parliament and of the Council of 14 June 2017 on the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market, and repealing Directive 2003/71/EC, which is part of UK law by virtue of the European Union (Withdrawal) Act 2018, as amended by The Prospectus (Amendment, etc) (EU Exit) Regulations 2019.

This communication is only addressed to, and directed at, persons in the Republic of Ireland or the Netherlands who are "qualified investors" within the meaning of Article 2(e) of the EEA Prospectus Regulation.  For the purposes of this provision, the expression "EEA Prospectus Regulation" means Regulation (EU) 2017/1129. This communication must not be acted on or relied on in any other member state of the EEA.

The Placing and the distribution of this announcement, in certain jurisdictions may be restricted by law and accordingly persons into whose possession this announcement is received are required to inform themselves about and to observe such restrictions.

The merits or suitability of any securities must be independently determined by the recipient on the basis of its own investigation and evaluation of the Company. Any such determination should involve, among other things, an assessment of the legal, tax, accounting, regulatory, financial, credit and other related aspects of the Ordinary Shares.

This Announcement may not be used in making any investment decision.  This Announcement does not contain sufficient information to support an investment decision and investors should ensure that they obtain all available relevant information before making any investment.  This Announcement does not constitute and may not be construed as an offer to sell, or an invitation to purchase or otherwise acquire, investments of any description, nor as a recommendation regarding the possible offering or the provision of investment advice by any party. No information in this Announcement should be construed as providing financial, investment or other professional advice and each prospective investor should consult its own legal, business, tax and other advisers in evaluating the investment opportunity. No reliance may be placed for any purposes whatsoever on this Announcement or its completeness.

Nothing in this Announcement constitutes investment advice and any recommendations that may be contained herein have not been based upon a consideration of the investment objectives, financial situation or particular needs of any specific recipient.

The information and opinions contained in this Announcement are provided as at the date of this Announcement and are subject to change and no representation or warranty, express or implied, is or will be made in relation to the accuracy or completeness of the information contained herein and no responsibility, obligation or liability or duty (whether direct or indirect, in contract, tort or otherwise) is or will be accepted by the Company, the AIFM, the Investment Manager, Investec, or any of their affiliates or by any of their respective officers, employees or agents in relation to it. No reliance may be placed for any purpose whatsoever on the information or opinions contained in this Announcement or on its completeness, accuracy or fairness. This Announcement has not been approved by any competent regulatory or supervisory authority.

Neither the content of the Company's website, nor the content on any website accessible from hyperlinks on its website for any other website, is incorporated into, or forms part of, this announcement nor, unless previously published by means of an RIS announcement, should any such content be relied upon in reaching a decision as to whether or not to acquire, continue to hold, or dispose of, securities in the Company.

The value of shares and the income from them is not guaranteed and can fall as well as rise due to stock market and currency movements. When you sell your investment you may get back less than you originally invested. Figures refer to past performance and past performance should not be considered a reliable indicator of future results.

This announcement may include statements that are, or may be deemed to be, "forward looking statements". These forward looking statements can be identified by the use of forward looking terminology, including the terms "believes", "estimates", "anticipates", "expects", "intends", "may", "might", "will" or "should" or, in each case, their negative or other variations or similar expressions. All statements other than statements of historical facts included in this announcement, including, without limitation, those regarding the Company's financial position, strategy, plans, proposed acquisitions and objectives, are forward looking statements. These forward looking statements speak only as at the date of this announcement and cannot be relied upon as a guide to future performance.

Forward looking statements are subject to risks and uncertainties and, accordingly, the Company's actual future financial results and operational performance may differ materially from the results and performance expressed in, or implied by, the statements. These factors include but are not limited to those described in the Prospectus. These forward looking statements speak only as at the date of this announcement and cannot be relied upon as a guide to future performance. Subject to their respective legal and regulatory obligations (including under the Prospectus Regulation Rules), the Company, the AIFM, the Investment Manager and/or Investec expressly disclaim any obligations or undertaking to update or revise any forward looking statements contained herein to reflect any change in expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based unless required to do so by law or any appropriate regulatory authority, including FSMA, the Prospectus Regulation Rules, the Disclosure Guidance and Transparency Rules, the Prospectus Regulation and UK MAR.

None of the Company, the AIFM, the Investment Manager and/or Investec, or any of their respective affiliates, accepts any responsibility or liability whatsoever for, or makes any representation or warranty, express or implied, as to this announcement, including the truth, accuracy or completeness of the information in this announcement (or whether any information has been omitted from the announcement) or any other information relating to the Company or associated companies, whether written, oral or in a visual or electronic form, and howsoever transmitted or made available or for any loss howsoever arising from any use of the announcement or its contents or otherwise arising in connection therewith. The Company, the AIFM, the Investment Manager and Investec, and their respective affiliates, accordingly disclaim all and any liability whether arising in tort, contract or otherwise which they might otherwise have in respect of this announcement or its contents or otherwise arising in connection therewith.

INFORMATION TO DISTRIBUTORS

Solely for the purposes of the product governance requirements contained within: (a) the UK's implementation of EU Directive 2014/65/EU on markets in financial instruments, as amended ("UK MiFID II"); and (b) the UK's implementation of Articles 9 and 10 of Commission Delegated Directive (EU) 2017/593 supplementing UK MiFID II, and in particular Chapter 3 of the Product Intervention and Product Governance Sourcebook of the FCA (together, the "MiFID II Product Governance Requirements"), and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any "manufacturer" (for the purposes of the MiFID II Product Governance Requirements) may otherwise have with respect thereto, the Shares have been subject to a product approval process, which has determined that such securities are: (i) compatible with an end target market of (a) retail investors who do not need a guaranteed income or capital protection who (either alone or in conjunction with an appropriate financial or other adviser) are capable of evaluating the merits and risks of such an investment and who have sufficient resources to be able to bear any losses that may result therefrom and (b) investors who meet the criteria of professional clients and eligible counterparties, each as defined in UK MiFID II; and (ii) eligible for distribution through all distribution channels as are permitted by UK MiFID II (the "Target Market Assessment").

Notwithstanding the Target Market Assessment, distributors (such term to have the same meaning as in the MiFID II Product Governance Requirements) should note that: the price of the Shares may decline and investors could lose all or part of their investment; the Shares offer no guaranteed income or capital protection; and an investment in the Shares is compatible only with investors who do not need a guaranteed income or capital protection, who (either alone or in conjunction with an appropriate financial or other adviser) are capable of evaluating the merits and risks of such an investment and who have sufficient resources to be able to bear any losses that may result therefrom. The Target Market Assessment is without prejudice to the requirements of any contractual, legal or regulatory selling restrictions in relation to the Issue. Furthermore, it is noted that, notwithstanding the Target Market Assessment, Investec will only procure investors (pursuant to the Issue or any subsequent Placing-Only Issue) who meet the criteria of professional clients and eligible counterparties.

For the avoidance of doubt, the Target Market Assessment does not constitute: (a) an assessment of suitability or appropriateness for the purposes of UK MiFID II; or (b) a recommendation to any investor or group of investors to invest in, or purchase, or take any other action whatsoever with respect to the Shares.

Each distributor is responsible for undertaking its own target market assessment in respect of the Shares and determining appropriate distribution channels.

UK PRIIPS REGULATION

In accordance with the UK version of Regulation (EU) No 1286/2014 of the European Parliament and of the Council of 26 November 2014 on key information documents for packaged retail and insurance-based investment products and its implementing and delegated acts, which is part of UK law by virtue of the European Union (Withdrawal) Act 2018, as amended by The Packaged Retail and Insurance-based Investment Products (Amendment) (EU Exit) Regulations 2019, the Key Information Document relating to the Ordinary Shares is available to investors at www.eurologisticsincome.co.uk.

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