Acquisition of Logistics Asset in 's-Heerenberg
Aberdeen Standard European Logistics Income PLC (LSE: ASLI) (the "Company" or "ASLI")
LEI: 213800I9IYIKKNRT3G50
17 June 2019
ACQUISITION OF LOGISTICS ASSET LOCATED IN 's-HEERENBERG THE NETHERLANDS FOR €24.0 MILLION AND COMPLETION ON ZEEWOLDE
Purchase agreement
The Company is pleased to announce that it has signed an agreement to acquire a freehold logistics warehouse in 's-Heerenberg, The Netherlands, for a net value of €24.0 million providing an expected net initial yield of 5.0%. The transaction is expected to close in July 2019.
This is a freehold facility providing a high quality warehouse, cross dock and 40 loading bays covering almost 23,000 square metres. The total site size of 45,000 square metres offers expansion opportunities in the future.
The warehouse has an attractive income profile and is fully leased to third-party logistics operator JCL Logistics Benelux BV, a wholly owned subsidiary of JCL Switzerland AG. The lease has a remaining term of 12.5 years and is fully CPI indexed. JCL have a long history in 's-Heerenberg and provide services to their clients who produce bikes and associated parts in Asia and the USA.
's-Heerenberg itself is located close to the German border (Emmerich barge terminal) and has good accessibility to the A12 and A3 motorways with the A12 being the main connection between the port of Rotterdam and Germany. Other operators in the area include Main Freight and DSV.
Zeewolde completion
The Company has also just completed on the newly built warehouse in Zeewolde, the Netherlands, for the previously indicated purchase price of €29.25 million providing a net initial yield of 5.0%. The agreement with developer Borghese was structured as a forward funded transaction with a 2.55% coupon rate.
This high quality freehold property had been pre-let to VSH Fittings B.V., a strong covenant tenant, on a 15 year lease commencing in June 2019 with capped CPI indexation of 2.4% per annum in accordance with local provisions. VSH Fittings B.V. was founded 85 years ago and is a wholly-owned subsidiary of Aalberts Industries N.V., a Euronext listed company with over 16,000 employees, 70 business locations and activities in over 50 countries. The company specialises in the production and distribution of industrial valve products and fittings used for sprinklers, heating and piping systems.
Zeewolde is in the heart of the Netherlands in the province of Flevoland, close to Almere, the fastest growing municipality in the Netherlands and Lelystad, an ideal location for national distribution. Zeewolde is also ideally situated close to several motorways, the A6, A27 and A28. In addition to its central location in the Netherlands, Zeewolde is well positioned with regards the availability of labour and the relatively low land costs, resulting in attractive rent levels.
The property is situated within an established logistics business park, alongside other well-known logistics companies. The tenure is freehold and the total plot size is 55,000 square metres, with the warehouse comprising 35,000 square metres alongside office space and 161 parking places.
New Financing
The Company is also pleased to announce that it has finalised and signed an agreement for long term financing on its Dutch properties in Ede, Oss and Waddinxveen. This secured loan facility arranged with Berlin Hyp for a total value of €37.7 million has been fixed for a six year term at an attractive all-in interest rate. Monies have been used to finance the purchase of 's-Heerenberg in addition to further stage payments on the forward funded project in Oss and final completion payment on Zeewolde.
The Board keeps the level of borrowings under review and the aggregate borrowings will always be subject to the absolute maximum set at the time of the Company's launch, calculated at the time of drawdown for a property purchase, of 50 per cent. of gross assets. On completion of the purchases of Oss and 's-Heerenberg and the finalisation of bank facilities overall asset-level gearing will sit as determined by the Board at or around 35 per cent. of gross assets. This level may fluctuate as and when new assets are acquired until longer term funding has been established or whilst short term asset management initiatives are being undertaken.
Evert Castelein, the Company's Fund Manager, commented:
"This additional facility in 's-Heerenberg is another excellent addition to ASLI's property portfolio and will take the number of assets in the portfolio to eleven including the soon to be completed project in Oss. I am particularly pleased to see the handover of Zeewolde and the commencement of full income generation. This warehouse has been built to the latest standards for modern logistics and this together with the central location and the long lease with a strong covenant tenant will generate a durable income stream for the Company.
I am very happy with the quality portfolio that we have built up across five countries in Europe which reflects a highly sustainable indexed income stream which helps protect against inflation. With the additional competitive bank funding in place our asset-level gearing will sit at or close to 35% on completion of the remaining forward funded project. Investment demand in the logistics sector remains strong. Based on healthy fundamentals we believe that the medium to long term outlook for the sector remains very favourable. Despite some tailwinds from economic output in certain areas, the structural shifts in consumption patterns and overall demand drivers remain supportive, while construction levels are relatively low. We continue to see a healthy pipeline of deal flow which we apply our stringent quality criteria against."
For further information:
Aberdeen Standard Fund Managers Limited
0207 463 6000
William Hemmings
Gary Jones
Luke Mason
Canaccord Genuity Limited
0207 523 8000
Will Barnett
Neil Brierley
Dominic Waters
David Yovichic
Notes to Editors
Aberdeen Standard European Logistics Income PLC is a UK investment trust with a premium listing on the Main Market of the London Stock Exchange. The Company invests in European logistics real estate to achieve its objective of providing its shareholders with a regular and attractive level of income return together with the potential for long term income and capital growth. The Company aims to invest 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.
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