Acquisition of New Warehouse in Warsaw
New acquisition
Aberdeen Standard European Logistics Income PLC (LSE: ASLI) (the "Company")
LEI: 213800I9IYIKKNRT3G50
3 October 2019
PURCHASE AGREEMENT SIGNED FOR THE ACQUISITION OF A NEW WAREHOUSE IN WARSAW FOR €27.5 MILLION
The Board is pleased to announce that the Company has exchanged contracts to acquire a newly built fully income producing logistics warehouse in Warsaw, Poland, for a purchase price of €27.5 million providing a net initial yield of 5.64%. The agreement is with developer Panattoni Development Europe and Marvipol Logistics, which are specialised developers of logistics projects. Contracts were exchanged after a lengthy due diligence process and after construction of the site was completed. Completion of the acquisition is currently scheduled for later in the month and will, once completed, represent the deployment of over half of the amount raised under the fundraising that took place in July.
The warehouse is located in an established logistics location in Poland along the A2 motorway which is one of the arterial routes for Warsaw and benefits from proximity to the city. There are also two international airports within easy access. All of these factors make this an ideal location for urban logistics and e-commerce related delivery. The logistics centre comprises two warehouses totalling 24,626 square metres, including 1,959 square metres of office space, with one building containing cross-docking facilities. The site is predominantly pre-let with an average lease length of 8 years. The main tenant is DHL, a division of the German logistics company, Deutsche Post DHL, the world's largest logistics company operating globally, particularly in sea and air mail. Other tenants include ICS Polska (specialising in industrial cleaning products) and Spedimex (a logistics company). Advanced negotiations are underway regarding the lease of the remaining space, currently covered by a 5 year rental guarantee. The Investment Manager is expecting these to conclude favourably shortly.
Outlook - future acquisitions and gearing
This acquisition brings the Company's portfolio to twelve quality logistics assets spread across five European countries and occupied by tenants with long indexed leases. Our intention remains to deploy all the capital raised in July as quickly as possible, but without compromising the focus on asset selection, price and tenant quality in building the portfolio. The Investment Manager is currently in advanced due diligence on another new warehouse in the Netherlands which would, if successful, mean that all the funds raised in July would be fully deployed and that gearing would be close to the target level of 35% by the end of the calendar year.
The Board and the Investment Manager continue to believe that the European market offers attractive opportunities because the logistics market is both sizeable and growing. The sector continues to benefit from the rapid take-up of logistics facilities, largely helped by the growth in e-commerce, and the long inflation-linked leases that quality tenants are prepared to sign up to in many parts of Europe. As we have previously stated, it is this strategy which is focused on investments on the Continent with attractive pricing, indexation of leases as standard and lower financing costs that underpins our investment policy.
For further information:
Aberdeen Standard Fund Managers Limited
0207 463 6000
William Hemmings
Gary Jones
Luke Mason
Investec Bank plc
020 7597 4000
David Yovichic
Denis Flanagan
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.
The Company launched on 15 December 2017 raising gross proceeds of £187.5 million with a further £46.4 million raised by way of a placing, open offer and open for subscription in July this year. Portfolio management services are undertaken by Aberdeen Standard Investments Ireland Limited, part of the Aberdeen Standard Investments group of companies.
The Aberdeen Standard Investments Real Estate team's extensive regional presence (with 25 offices in 14 countries across Europe) gives it very strong local insight and market knowledge with access to a wide variety of investment opportunities, both on and off market. As investment manager, it is therefore well positioned to identify assets suitable for the Company's portfolio with transaction managers on the ground able to source and complete deals.
Further information on Aberdeen Standard European Logistics Income PLC is available at www.eurologisticsincome.co.uk
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