Disposal, Asset Management and Valuation Update
abrdn Property Income Trust Limited
(an authorised closed-ended investment company incorporated in Guernsey with registration number 41352)
LEI Number: 549300HHFBWZRKC7RW84
5 October 2022
DISPOSAL, ASSET MANAGEMENT AND VALUATION UPDATE
abrdn Property Income (API) has completed the sale of an industrial investment in Rainham, East London for £21.65m, reflecting a yield of 2.84%. The property was the lowest yielding asset in the portfolio, and the sale price represented a discount to the end June valuation of 2.7%. The asset was purchased in late 2007 for £7.5m and has provided a return of 14.5% per annum from purchase to 30 June 2022. The sale follows the disposal of an office in Kidlington earlier in the quarter above valuation. Proceeds of the sales are being used to pay down the drawn RCF.
On 30 June the portfolio vacancy rate was 10.2%. Since that date the Company has completed two exciting lettings. Firstly, a logistics unit representing 1.8% of portfolio income has been let subject to the Company completing a refurbishment (lease completion expected June 2023). The refurbishment will lead to an operational carbon net zero EPC A unit let at a rent 59% above the previous rental level. Secondly, the Company has also completed the letting of another logistics unit that has been refurbished to become EPC A and operational net zero carbon. The new rent represents 1% of fund ERV, again demonstrating strong growth on the previous rent at the property.
Markets are obviously very volatile at the moment and this is likely to continue. The Company’s portfolio has been valued as at 30 September, which will form the basis of the 30 September NAV to be announced in early November. The property valuation has decreased 4.2% on a like-for-like basis, which we believe will be similar to the MSCI index.
Jason Baggaley, Fund Manager of API commented “The sale of the asset in Rainham was a bitter-sweet moment for me. It was the first asset I bought for the Company, back in 2007. A year after purchase, as we went through the financial crisis, that purchase did not look so great, but as we exit now, it is a good reminder that, despite short term bumps along the road, well located assets that meet the needs of occupiers perform well over the longer term. We are in another “bump” currently, with a lot of uncertainty, but I remain confident that the portfolio continues to offer good quality, well located properties that are affordable, and meet occupier needs. The recent successful lettings of the two logistics units further demonstrate that.”
All Enquiries:
Jason Baggaley – Real Estate Fund Manager, abrdn
Tel: 07801 039463 or jason.baggaley@abrdn.com
Mark Blyth – Real Estate Deputy Fund Manager, abrdn
Tel: 07703 695490 or mark.blyth@abrdn.com
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