TIDMASLI
RNS Number : 4633N
Aberdeen Standard Eur Lgstc Inc PLC
30 September 2021
29 September 2021
ABERDEEN STANDARD EUROPEAN LOGISTICS INCOME PLC (the
"Company")
LEI: 213800I9IYIKKNRT3G50
INTERIM RESULTS FOR THE SIX MONTHSED 30 JUNE 2021
Focus on high quality and structurally supported Continental
Europe mid box and urban warehouse assets delivers another period
of strong NAV and earnings growth
Aberdeen Standard European Logistics Income PLC, the Continental
European investor in modern warehouses, which is managed by abrdn,
today announces its interim results for the six months to 30 June
2021.
Continued NAV and earnings growth:
- Net asset value per ordinary share increased by 3.3% to
EUR1.24 (31 December 2020: EUR1.20)
- Share price total return of 12.0%
- NAV total return (in Euro terms) of 5.2% for the period and
14.7% for the 12 months to 30 June 2021, primarily driven by
ongoing favorable yield movement
- Loan to Value of 31.7% (all in cost of debt 1.36%, average term to maturity 5.5 years)
- Declared dividends of 2.82 Euro cents (equivalent to 2.42
pence) per share in respect of the period, in line with the target
for the financial year
- Reflecting the Company's growth ambitions, a GBP19.4 million
oversubscribed equity issuance completed in March 2021, and as
announced on 29 September 2021, a post-period end oversubscribed
GBP125 million equity issuance, with strong pipeline of
acquisitions identified
Acquisitions and focus on asset and counterparty quality take
gross assets to over EUR500 million:
- Strong rent collection with 99% of rent due for the period collected
- Portfolio valued at EUR492 million, reflecting yield
compression and new acquisitions; on a like for like basis, the
portfolio value increased by 3.4% over 31 December 2020
- Two acquisitions, totalling EUR46.8 million, taking the total
portfolio to 16 modern properties, diversified by geography and
tenant:
-- A 34,000 sqm warehouse in Lodz, Poland, for EUR28 million,
reflecting a net initial yield of 5.5%
-- Post-period end, the EUR18.8 million acquisition of a modern
urban logistics warehouse in Barcelona, Spain, reflecting a net
reversionary yield of 4.7%
- Weighted average unexpired lease term ("WAULT") of 7.4 years
Further progress delivering on ambitious sustainability
targets:
- Long-term solar panel leases at the Company's Ede and Den
Hoorn assets have delivered a capital uplift of approximately EUR1
million
- Four out of a maximum of five Green Stars with a GRESB score
of 79/100, which compares favourably with the 68/100 average score
for the Western Europe Industrial Distribution Warehouse peer
group
Tony Roper, Chairman, Aberdeen Standard European Income
Logistics, commented:
"To date we have built a diversified portfolio of 16 modern,
high quality logistics warehouses with long term, inflation linked
income characteristics. Our ambition is to increase the size of
Company, while replicating the outperformance delivered by the
Manager to date. With the support of both the new and existing
shareholders who participated in the successful equity raise and a
sizeable pipeline of acquisition opportunities, we are well placed
to achieve this ambition and can look forward to the further scale
and diversification benefits which additional investment will
afford."
Evert Castelein, Lead Fund Manager, Aberdeen Standard European
Income Logistics, added:
"The structural changes underpinning the continued growth of the
European logistics sector show little sign of abating. Supply
chains are being optimised with the demand for logistics boosted by
the rise of e-commerce as more people across Europe have adapted to
buying online. Alongside this, we are increasingly seeing the
growing trend of near-shoring overseas manufacturing closer to home
and higher inventory levels, in order to reduce operational risks.
The result is a significant demand supply imbalance of modern
Grade-A stock, in strong locations, meaning that vacancy rates are
at historically low levels.
"The Company's forensic approach to asset selection and strict
investment criteria has resulted in another period of strong
financial performance. By focusing on property fundamentals and
counterparty quality, we feel well placed to capture both rental
and capital growth, with the necessary downside protection. Despite
the weight of global capital seeking to access the sector, the
opportunity in the mid box and urban logistics space for
experienced managers with deep local market expertise remains
sizeable, underpinning our strong conviction in the Company's
prospects."
-Ends-
For further information please contact:
Aberdeen Standard Fund Managers Limited +44 (0) 20 7463 6000
Luke Mason
Gary Jones
Investec Bank plc +44 (0) 20 7597 4000
David Yovichic
Denis Flanagan
FTI Consulting +44 (0) 20 3727 1000
Dido Laurimore
Richard Gotla
James McEwan
HIGHLIGHTS AND FINANCIAL CALAR
Financial Highlights
30 June 31 December
2021 2020
====================================== ========= =============
Total assets (EUR'000) 539,992 484,104
====================================== ========= =============
Equity shareholders' funds (EUR'000) 325,018 293,596
====================================== ========= =============
Share price - Ordinary share (pence) 119.00 108.50
====================================== ========= =============
Net asset value per Ordinary share
(EUR) 1.24 1.20
====================================== ========= =============
Share price premium to sterling net
asset value 12.2% 0.5%
====================================== ========= =============
Performance (total return)
Six months ended Year ended 31 Since Launch
30 June 2021 December 2020 return
======================== ================= =============== =============
Share Price1 12.0% 26.6% 37.1%
======================== ================= =============== =============
Net Asset Value (EUR)1 5.2% 13.6% 25.8%
======================== ================= =============== =============
1 Considered to be an Alternative Performance Measure (see
printed Half Yearly Report for more information).
Financial Calendar
24 September 2021 Payment of second interim distribution for year
ending 31 December 2021
================= ======================================================
29 September 2021 Announcement of unaudited half yearly results
================= ======================================================
October 2021 Half Yearly Report posted to Shareholders
================= ======================================================
30 December 2021 Payment of third interim distribution for year
ending 31 December 2021
================= ======================================================
25 March 2022 Payment of fourth interim distribution for year
ending 31 December 2021
================= ======================================================
April 2022 Announcement of Annual Financial Report for
the year ending 31 December 2021
================= ======================================================
May 2022 Annual Report available on line (and posted
to those registered Shareholders who have requested
hard copies)
================= ======================================================
June 2022 Annual General Meeting in London
================= ======================================================
June 2022 Payment of first interim distribution for the
year ending 31 December 2022
================= ======================================================
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 2021.
The Company is solely focussed on investing in logistics real
estate in Europe, with our strategy targeting both medium sized
"mid box" assets and smaller format "urban logistics" that will
serve 'last mile' functions for Europe's rapidly growing e-commerce
activities.
Timely share issuances, together with cautious leverage, have
enabled the Investment Manager to acquire a well-diversified
portfolio of modern logistics warehouses in established locations.
These assets typically benefit from durable 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 range of logistics
real estate assets that the Investment Manager believes are well
located, close to established distribution hubs and population
centres that will provide the Company with increased asset and
tenant diversification and enable it to meet its investment
objective.
The share price ended the period under review at 119.0p, up from
108.5p at year end, and has been supported by a range of investors
seeking investment into the logistics sector through a quality,
income-producing portfolio with a low risk profile and competitive
fees.
A key uncertainty affecting the operations of the Company was
the continued impact of Covid-19 and its potential to disrupt the
suppliers of services to the Company. I am pleased to report that
these services have continued to be supplied without interruption
during the period.
In April 2021 we announced the acquisition of a modern logistics
and distribution property in Lodz, Poland for EUR28.1 million,
representing a net initial yield of 5.6%, purchased from logistics
and industrial developer Panattoni, with whom the Investment
Manager has a strong relationship.
Located at the centre of Poland's thriving industrial and
manufacturing sector, the property is situated adjacent to the
Bosch-Siemens Campus, which is a strategically important production
and distribution hub for the international manufacturer. The site
benefits from access to the Intermodal Container Terminal, created
to support the Bosch-Siemens campus and which offers direct rail
connections with China.
This purchase was followed in July 2021 with the Company
announcing that it had completed on the acquisition of a modern
urban logistics warehouse in Polinyà, Barcelona, Spain's second
most populous city. The purchase price of EUR18.8 million reflects
a net initial yield of 3.7% and, importantly, a net reversionary
yield of 4.7%.
This 13,900 square metre asset is located in the first ring of
Barcelona, which is within a 25 minute drive (27km) of the city
centre and is well positioned to benefit from the growth of
e-commerce and the scarcity of development opportunities, which
provides strong rental growth potential. The local market is
characterised by a low vacancy rate of 3%, which falls to just 1%
for the first ring, reflecting naturally occurring land
constraints, with the city surrounded by the sea and mountains.
The asset, in a strategically positioned and highly consolidated
industrial area connecting Barcelona with France and the wider
European market in the north, and to Zaragoza, Madrid and other key
cities along the Mediterranean coast of Spain, is an ideal addition
to the portfolio.
This was the Company's third investment in Spain and its first
in Barcelona, providing further diversification within the
portfolio.
Further details on the Company's portfolio are provided in the
Investment Manager's Report.
Results
The unaudited Net Asset Value ("NAV") per share as at 30 June
2021 was EUR1.24 (GBp - 106.1p), compared with the NAV per share of
EUR1.20 (GBp - 107.9p) at the end of 2020, reflecting, with the
interim dividends declared, a NAV total return of 5.2% for the six
month period under review, in euro terms. Over the 12 months ended
30 June 2021, the NAV total return was 14.7% reflecting the strong
valuation uplifts that we have witnessed.
The closing Ordinary share price at 30 June 2021 was 119.0p (31
December 2020 - 108.5p), representing a premium to the NAV per
share of 12.2%.
Rent collection
The half year ended with 99% of rents (payable in advance)
collected, with a small amount of rent due on the Meung sur Loire
property in respect of January 2021, which amounted to EUR258,000
unpaid as previously reported.
Pleasingly, for the quarter ended 30 June 2021, the Company
collected 100% of the rents due from tenants.
As previously announced it is expected that the administrator
appointed by the French courts to oversee the sale of Office
Depot's business will surrender the lease on the Meung sur Loire
warehouse. Whilst the administrator continues to pay rent, when
this ceases the Company will be able to draw on the three month
rental guarantee already held at bank while a new tenant is
actively sought through the appointed agents.
Dividend
On 24 February 2021 the Board declared a fourth interim
distribution of 1.41 euro cents (equivalent to 1.24 pence) per
Ordinary share in respect of the year ended 31 December 2020. In
aggregate a total dividend of 5.64 euro cents was paid in respect
of the 2020 financial year. The equivalent sterling rate paid was
4.96 pence.
First and second interim distributions of 1.41 euro cents
(equivalent to 1.21 pence) have been declared in respect of the
year ending 31 December 2021. Further details are shown below:
Distributions declared Dividend Interest Ex date Record date Pay date
income income
======================= ======== ======== ======== =========== =========
4th interim 2020 -
1.41c (1.24p) 0.80p 0.44p 4 Mar 21 5 Mar 21 26 Mar 21
======================= ======== ======== ======== =========== =========
1st interim 2021 -
1.41c (1.21p) 0.80p 0.41p 3 Jun 21 4 Jun 21 25 Jun 21
======================= ======== ======== ======== =========== =========
2nd interim 2021 -
1.41c (1.21p) 0.95p 0.26p 2 Sep 21 3 Sep 21 24 Sep 21
======================= ======== ======== ======== =========== =========
Interim dividends continue to be declared in respect of the
quarters ending on the following dates: 31 March, 30 June, 30
September and 31 December in each year.
In light of the demand for the Company's shares from investors
based in Europe and in order to maintain its attractiveness to
future investors, Shareholders may now elect to receive dividend
payments in Euros instead of Sterling. A currency election period
will be introduced from the record date of each dividend for
approximately 10 days to permit Shareholders to make their currency
choices.
Once a Shareholder has elected to receive dividends in Euros,
then all future dividends will be paid in Euros unless the
Shareholder elects to switch back to Sterling payments.
The default position will continue to be Sterling payments. For
CREST enabled Shareholders, this will be made available via
CRESTPay. Shareholders that hold their Ordinary shares in
certificated form will be able to elect to receive a Euro payment
via the Equiniti Shareview Portfolio. By accessing "My Investments"
and clicking on the "Dividend Election" link next to the "Aberdeen
Standard European Logistics Income" shares Shareholders will be
able to select Euro. If Shareholders have not already signed up for
a Shareview Portfolio they may register at
shareview.co.uk/register.
Fund raising and share issuance
The Investment Manager continues to review an attractive
pipeline of possible acquisitions for the Company for which
additional capital is required.
In March 2021 the Company issued 18.45m million new Ordinary
shares at a price of 105 pence per share. The shares were issued
under the remaining authority granted by Shareholders to issue up
to 10% of the issued share capital on a non pre-emptive basis and
the issue was over-subscribed. Following this issue of new Ordinary
shares, the total number of shares in issue and voting rights in
the Company was 262,950,001 shares.
Since the period end, on 8 September 2021, the Company announced
proposals to raise a target amount of GBP75 million to fund
additional acquisitions together with putting in place a share
issuance programme to enable future purchases, subject to
Shareholder approval. The proposals together comprised:
-- a target issue of GBP75 million through the issue of new
Ordinary shares pursuant to a Placing, Open Offer and Offer for
Subscription (together the "Issue"); and
-- the ability to issue up to a further 250 million Ordinary
shares and/or C Shares in aggregate on a non-pre- emptive basis
through a share issuance programme (the "Share Issuance
Programme").
On 29 September 2021 the Board confirmed the results of the
fundraising issue with gross proceeds of GBP125 million having been
raised. The very positive response to the Company's fundraising
from both existing shareholders and new investors is a clear
endorsement of the strategy and performance of the Company to date.
The issue was significantly over-subscribed and with the near-term
pipeline of acquisition opportunities growing since early
September, after careful consideration the Board increased the size
of the Issue to GBP125 million.
Both the proposed Issue and the Share Issuance Programme are
conditional upon, amongst other things, the Company obtaining
Shareholder approval at the General Meeting that has been convened
for 11:00 a.m. on 30 September 2021.
Investment policy clarity
Whilst publishing the recent prospectus in connection with the
Issue mentioned above, the Board together with its advisers and the
Manager have taken the opportunity to provide further clarity
around the Company's investment policy. There has been no material
change in respect of the policy and a copy of the new wording may
be found on the Company's website.
Revolving credit facility
At the time of the Annual Report I confirmed that the Company
had entered into a new EUR40 million Revolving Credit Facility
("RCF") at the parent Company level provided by Investec Bank.
Subsequent to the period end, the Board agreed an increase in the
size of the facility to EUR70m. The increased RCF will further
enhance the Company's ability to move quickly when acquiring new
assets and reduce the impact of cash drag on the Company's
investment returns.
Long term financing
The Investment Manager's treasury team has sourced fixed term
debt from banks which is secured on certain assets or groups of
assets within the portfolio.
Asset level gearing at the period end was 31.7%, below the
Company's target level of 35%.
The Company's non-recourse loans range in maturities between
3.75 and 7.25 years with interest rates ranging between 0.94% and
1.62% per annum.
The current average interest rate on the total fixed term debt
arrangements of EUR144.6 million (excluding the RCF) is 1.36%. The
Board continues to keep the level of borrowings under review,
calculated at the time of drawdown for a property purchase. The
actual level of gearing may fluctuate over the Company's life as
and when new assets are acquired or whilst short term asset
management initiatives are being undertaken. Banking covenants are
reviewed by the Investment 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
Investment Manager's policy and approach to integrating ESG.
The Investment Manager has identified a range of key forces for
change comprising Environment & Climate, Governance &
Engagement, Demographics and Technology & Infrastructure. These
four forces naturally encompass a diverse range of topics and
concerns and our Investment Manager has translated and codified
these into its investment approach, while also aligning them to the
UN Sustainable Development Goals. It believes that these forces
will shape the future and, in turn, shape our long-term approach by
guiding how ESG factors are prioritised at the Company and asset
level.
The current portfolio has strong ESG credentials and more can be
found in the Investment Manager's report
which follows.
Asset management is essential for preserving and adding value to
the portfolio and ultimately for shareholders. Our Investment
Manager has a team of people in Europe working with tenants and
real estate experts as we see opportunities to not only improve
buildings and add a better working environment but to also extend
where the footprint allows. Meung sur Loire and Waddinxveen are two
examples where there are opportunities to add value and where the
team on the ground has been discussing options to seek to enhance
size and potential value.
Change of Company name
In order to align the Company's name with the name of the
Manager's business, which has recently changed to abrdn plc, the
Board has resolved to change the Company's name to abrdn European
Logistics Income PLC. This will take effect from the start of the
Company's new financial year on 1 January 2022. The Company's
ticker, ASLI, will remain unchanged.
Outlook
The European logistics market is large and continues to develop
rapidly; growing tenant demand is fuelled by the strong growth of
e-commerce across Europe and the consequent supply chain
reconfiguration as operators embrace this technological
advancement. Of additional note is the rapid acceleration of
interest and demand amongst logistics occupiers to adhere to higher
ESG standards and the Investment Manager both recognises and has
embraced this fundamental change in occupational demand for
suitable buildings.
As a consequence of strong occupier demand, and constrained
supply conditions, tenants have been prepared to secure favoured
assets by signing long, index-linked or fixed uplift, lease
contracts. Such indexed leases typically offer annual CPI uplifts
and can provide for a transparent and predictable inflation-proofed
cash flow to the Company.
In an increasingly uncertain world, the incontrovertible shift
in the way consumers shop and the infrastructure required to
service that demand is a source of greater certainty. The
Investment Manager believes that logistics assets are primed for
further growth, as well as being relatively defensive against any
cyclical downturn in economic activity. As such the Company's
portfolio is characterised by having long leases secured against
financially robust tenants.
To date we have built a diversified portfolio of 16 modern, high
quality logistics warehouses with long term, inflation linked
income characteristics, which has underpinned year on year
valuation gains and delivered attractive returns for Shareholders.
The Investment Manager has a strong pipeline of assets that will
sit well within the portfolio and we look forward to the further
scale and diversification benefits which these investments will
provide.
Tony Roper
Chairman
29 September 2021
INTERIM BOARD REPORT - INVESTMENT MANAGER'S REVIEW
Overview
The first half of 2021 witnessed a cautious reopening of
economies across Europe, as the vaccination roll-out programme
gathered pace. Whilst concerns over new variants are likely to make
the 'hoped for' path towards a full and sustainable recovery a
volatile one, we continue to be buoyed by the performance of the
logistics sector, which held up very well, outperforming the office
and retail segments.
Supply chains are being optimised as the demand for all aspects
of the logistics sector is boosted by the rise of e-commerce, as
more people across Europe embrace online purchasing. Together with
the increasing trend of near-shoring overseas manufacturing as
companies seek to reduce operational risks and the building of
increased inventory levels, the sector is dealing with a demand-
supply imbalance leading to vacancy rates at historically low
levels.
Strong underlying fundamentals have been driving capital into
the sector, reinforcing a strong belief that the logistics sector
will outperform, with investors benefiting from growing and
reliable income streams and capital growth.
With our local teams located across Europe, we have been able to
build a well-diversified, high quality portfolio, with 9 of our 16
buildings new at the time of purchase. This underpins our
confidence that the portfolio is liquid (in demand) and well
positioned for the future.
Rent collection held up very well in 2020 and H1 2021 reflecting
the diverse nature and overall strength of our tenant base.
Increasing property valuations in the period, reviewed by the
independent valuer, CBRE GmbH, underpinned further NAV growth and
the delivery of double digit returns.
Overall we believe that the diverse nature of the assets and
tenants, together with the long-dated inflation protected nature of
the income, with sensible gearing, offers a compelling investment
for investors.
Our ambition is to mitigate risk through further diversification
of the portfolio through the acquisition of high quality assets
which will improve the current portfolio's ESG credentials, with a
strong focus on reducing its carbon footprint. We incrementally
added to the portfolio during the period with acquisitions in Lodz,
Poland and Polinyà, Barcelona, Spain, which were completed in April
and July 2021 respectively, bringing the total number of assets now
to 16.
Logistics sector benefits from strong fundamentals
The European logistics market is sizeable and continues to
develop rapidly; growing tenant demand is fuelled by the rapid
growth of e-commerce across Europe, a trend which has accelerated
through increased smartphone ownership and the increased
technological capabilities of wireless devices. The arrival of
Amazon and other online retailers created a tipping point in 2016
in Europe which led to the growth in logistics demand rising at a
faster rate. The Covid-19 pandemic dramatically accelerated this
pre-existing trend, pushing online retail sales volumes to record
levels with unexpected growth of c.31% in 2020, and while this was
under exceptional circumstances the level is forecast to remain
structurally higher than before the pandemic due to permanent
changes in people's shopping habits.
At the same time, long distance supply chains have proven to be
vulnerable due not only to Covid-19, but also to global events like
the recent Suez Canal blockage. This helps explain the growing
near-shoring trend with manufacturers considering bringing
production closer to home or keeping higher inventory levels at
warehouses in order to make the supply chain more resilient to such
shocks. The Covid-19 pandemic re-opened the debate about the merits
and drawbacks of highly coordinated global supply chains.
However, an increasingly uncertain political environment and the
looming effects of climate change had already prompted concerns
about robustness, resilience and the very structure of such 'just
in time' global supply models. These trends together are driving
the demand for modern logistics space to higher levels each year,
with warehouse supply unable to keep up, resulting in a heavily
undersupplied market and vacancy rates at c.4%.
As a consequence, tenants are increasingly prepared to sign
long, CPI index-linked lease contracts to secure the most sought
after assets. The requirement for what the industry terms 'last
mile' warehouses to be close to or within the major centres of
population also coincides with rapid urbanisation across Europe,
where city populations are growing rapidly and logistics assets
competing with other land uses, driving land prices and rents
upwards. These factors are why we will continue to focus on urban
logistics.
Building a well-diversified portfolio with 'liquid' or saleable
assets
Diversification and liquidity are key considerations for us when
considering any purchase, with the portfolio's risk currently
spread across 16 logistics warehouses located in five European
countries and leased to 44 tenants. During the first six months of
2021, two buildings were added to the portfolio. In April, the
Manager exchanged contracts on a brand new warehouse in Lodz,
Poland, for EUR28.1 million, reflecting a net initial yield of
5.6%. This cross-dock warehouse is leased to seven tenants with
strong links to the location thanks to the presence of the
Bosch-Siemens Campus and direct access to the Silk Road, the
railway connection between Asia and Europe.
In July the Company exchanged contracts on an urban logistics
warehouse in Barcelona, Spain, for a net purchase price of EUR18.8
million, reflecting a net initial yield of 3.7% on current rent. As
a city, Barcelona is supply constrained by nature due to the close
presence of the sea and the mountains. With the city expanding, it
is extremely difficult to find new logistics locations, thus
creating upside potential for the Company in terms of rental
income, resulting in an expected reversionary yield of 4.7%
following the first break. The asset is located on the Polinyà
Logistic Park, a strategically positioned and highly consolidated
industrial area just off the AP-7 motorway that connects Barcelona
with France and the wider European market in the north, and to the
south to Zaragoza, Madrid and other key cities along the
Mediterranean coast of Spain.
At the end of June 2021, the portfolio was valued at EUR492.3
million. Excluding the Lodz asset, this shows a solid increase of
3.4% over the first half of the year despite a short term reduction
of EUR6.5 million in respect of the Meung sur Loire valuation
whilst we seek a new tenant for the building. With Lodz showing an
increase of 4.0% over the initial purchase price to 30 June and
including our Barcelona asset at cost which was purchased in July
the total portfolio gross asset value is c.EUR510 million.
At 30 June 2021, the Netherlands, considered one of the most
attractive logistics markets in Europe by the Investment Manager,
had the largest allocation in the portfolio by value at 46.0%,
followed by Poland 18.3%, France 15.3%, Germany 14.2% and Spain
6.2%. The allocation to Spain increased to almost 10% with the
addition of the warehouse in Barcelona in July, with exposure to
the other countries decreasing proportionally.
More than any other sector, real estate logistics is looking
beyond national borders and is driven by international trade flows.
For an operator, the quality of a location will depend on a
combination of several factors. For example, the quality of the
local infrastructure, population density, spending power,
e-commerce adoption and the availability of labour and labour
costs. Over the last decade, the most active markets in Europe were
ranked (in order): the Netherlands, Germany and Poland measured by
square metres of transactions per capita. This is exactly where the
Company has been focussed and active with 11 of its 16
acquisitions, or 76% of the total portfolio value. Liquidity or
saleability is always a key focus for us. This will depend not only
on the quality of the location but also on the asset specifications
which need to be modern and when combined together will give the
building a 'second-life', thus making it attractive to other
potential tenants. In addition, with our on the ground resources in
many of these European countries, we are able to manage and work
closely with developers and other contractors to add value to
assets that may require modernisation or re-formatting.
The Netherlands is our largest country exposure, reflecting its
position as a gateway to the European market, thanks to its
strategic location and the presence of Rotterdam, the largest
seaport in Europe. Logistics density in stock per capita is the
second highest in Europe with many European Distribution Centres
found alongside the main transport corridors leading to Belgium and
Germany. Land for new developments in this densely populated
country is scarce, explaining our overweight exposure, with six
Dutch assets in the portfolio.
The logistics market in Poland is also expanding rapidly,
clearly benefiting from the dominant manufacturing Sector, in
combination with the low labour costs and it being the first stop
for the Silk Road and giving it a competitive edge in Europe. For
these reasons, Poland is now our second largest country allocation,
with three warehouses, providing the Company with a yield pick-up
over certain other regions. The manufacturing sector is most
dominant in Germany, the largest economy in Europe, where we have
two multi-tenanted warehouses in the densely populated Frankfurt
Rhine-Main region. The remainder of the portfolio comprises two
warehouses on established logistics hubs in France and three in
Spain, of which two are urban logistics warehouses with especially
strong rental growth expectations.
Property portfolio as at 30 June 2021
WAULT incl WAULT excluding % of Fund
Country Location Built breaks breaks in
in yrs yrs
============ ================ ============ ========== =============== =========
France Avignon 2018 6.1 10.2 10.4
============ ================ ============ ========== =============== =========
France Meung sur Loire 2004 - - 4.3
============ ================ ============ ========== =============== =========
Germany Erlensee 2018 4.7 6.9 8.4
============ ================ ============ ========== =============== =========
Germany Flörsheim 2015 3.6 7.3 5.3
============ ================ ============ ========== =============== =========
Netherlands Den Hoorn 2020 8.9 8.9 11.7
============ ================ ============ ========== =============== =========
Netherlands Ede 1999/2005 6.5 6.5 3.4
============ ================ ============ ========== =============== =========
Netherlands Oss 2019 13.0 13.0 6.5
============ ================ ============ ========== =============== =========
Netherlands s Heerenberg 2009/ 2011 10.5 10.5 6.4
============ ================ ============ ========== =============== =========
Netherlands Waddinxveen 1983 - 2018 12.4 12.4 9.1
============ ================ ============ ========== =============== =========
Netherlands Zeewolde 2019 13.0 13.0 7.3
============ ================ ============ ========== =============== =========
Poland Krakow 2018 3.4 3.4 5.7
============ ================ ============ ========== =============== =========
Poland Lodz 2020 7.6 7.6 5.9
============ ================ ============ ========== =============== =========
Poland Warsaw 2019 6.4 6.4 5.9
============ ================ ============ ========== =============== =========
Spain Leon 2019 7.7 7.7 3.6
============ ================ ============ ========== =============== =========
Spain Madrid 1999 8.5 8.5 2.4
============ ================ ============ ========== =============== =========
Total Q2 2021 (1) 7.4 8.2 96.2
============================== ============ ========== =============== =========
Spain, Jul
2021 (2) Barcelona 2019 5.0 8.0 3.8
============ ================ ============ ========== =============== =========
Total (1+2) 7.3 8.2 100.0
============================== ============ ========== =============== =========
Loan portfolio as at 30 June 2021
Existing Remaining Interest
Country Property Bank loan End date Years (incl margin)
EUR million
============ ======================== =========== ============ ============ ========= ==============
February
Germany Erlensee DZ Hyp 17.8 2029 7.7 1.62%
============ ======================== =========== ============ ============ ========= ==============
February
Germany Flörsheim DZ Hyp 12.4 2026 4.7 1.54%
============ ======================== =========== ============ ============ ========= ==============
Avignon + Meung February
France sur Loire BayernLB 33.0 2026 4.6 1.57%
============ ======================== =========== ============ ============ ========= ==============
Netherlands Ede + Oss + Waddinxveen Berlin Hyp 37.7 June 2025 3.9 1.18%
============ ======================== =========== ============ ============ ========= ==============
Netherlands s Heerenberg Berlin Hyp 8.0 June 2025 4.0 0.94%
============ ======================== =========== ============ ============ ========= ==============
Netherlands Den Hoorn + Zeewolde Berlin Hyp 35.7 January 2028 6.5 1.25%
============ ======================== =========== ============ ============ ========= ==============
Total 144.6 5.2 1.36%
=================================================== ============ ============ ========= ==============
Long indexed leases and historic strong rent collection
Rent collection has remained strong.. A total of 99% of rent was
collected in respect of H1 2021, following a pleasing 97% of rent
being collected for the full calendar year of 2020, despite the
pandemic and its obvious impact through various lockdowns. In 2020
we received several requests for rent deferrals and granted seven
rent-free periods in exchange for material lease extensions. No new
requests have been received through the first half of 2021.
A rent deferral for one quarter of rent was also agreed with our
tenant, Office Depot, at our French asset in Meung sur Loire. The
tenant paid two-thirds of the deferred rent but sought court
protection in February 2021 with an administrator appointed to seek
buyers for the business. Since then, a decision has been made to
sell part of the retail business, but the warehouse will not be
required. We are now actively seeking a new tenant with leasing
agents already appointed. We are confident that we will find a
solution for this attractive asset, which is located in an
established central location in France, making this an ideal
location for national distribution. The building has the potential
to be multi-tenanted whilst the low site density offers future
development potential, which we previously explored with Office
Depot. This upside potential remains and can still be achieved with
any new tenant. Furthermore, the logistics market in France is
extremely tight with very little modern stock available.
At the end of June 2021, the portfolio average lease length was
7.4 years including break options and 8.2 years excluding break
options, all with indexed leases creating an effective inflation
hedge on our future cashflows.
ESG and the Investment Manager's strategy to reach Zero Carbon
emissions
Environmental, Social and Governance (ESG) is another key area
of focus for the Investment Manager. Since the signing of the Paris
Treaty on climate change in 2015, we have recognised an increased
ESG awareness amongst governments, investors and also tenants in
the logistics sector. Together with our dedicated ESG team we
remain very proactive in driving our ESG agenda, in order to
protect the property values of our buildings by ensuring their
current and future appeal. Our current rating is strong and
reflected in the four Green Stars awarded, out of a maximum of
five, in the 2019 submission for the Global Real Estate
Sustainability Benchmark assessment (GRESB), where we achieved a
score of 79/100 points for the portfolio against 68/100 points for
the larger peer group. Results from the 2020 submission are
expected to be announced in October 2021 when we hope to improve
our rating even further.
We are also making good progress with our appointed adviser,
Verco, helping to define a pathway to a Net Zero Carbon emissions
target and which we hope to update investors on in the future. This
will help to define asset-level strategies. Other ESG projects that
we are concentrating on are BREEAM-in-use certification, a pilot
for advanced smart metering and the installation of solar panels.
In Q2 2021, the Company completed the signing of two roof leases
for solar panel projects in the Netherlands, at Den Hoorn and Ede,
both with a 20 year duration. These will generate a total income
stream of c.EUR100,000 per year and a c.EUR1.0 million capital
uplift. The reviews of options for assets that do not have such
panels are ongoing. With our local teams we are building on our
close relationships with our tenants and seeking to understand how
we can service them best.
Increasing capital values and our capacity to add value
In the first half of 2021, the portfolio value increased by
3.4%. This included the EUR6.5 million fall in value in relation to
Meung sur Loire after the tenant, Office Depot, went into
liquidation. Marketing of the building has commenced and there is
built-in upside once a new tenant has been found. The property
benefits from low site coverage with expansion potential of c.
8,000 square metres, or over 25%, which will broaden our offer in
the re-letting of this asset. A EUR1.0 million uplift in valuation
was added with the signing of two roof leases with solar panels on
our two Dutch warehouses in Ede and Den Hoorn and we continue to
evaluate further options in the portfolio, within the parameters of
local planning laws. The Investment Manager is in advanced
discussions on a building extension in Waddinxveen of c. 5,000
square metres. In addition, the most recent purchase in Barcelona
is heavily under-rented by 22%, giving an expectation of further
upside potential at the first break option in 2026, allowing for
further negotiations which could enhance capital values
further.
Strong fundamentals support a positive outlook
We believe the Covid-19 pandemic has further accentuated and
accelerated many of the positive demand drivers that were already
in place before the crisis began. Important considerations around
sustainability and social responsibility have also been brought to
the forefront of the sector and there will be greater scrutiny of
these areas in the future.
We expect the logistics industry to continue to be a beneficiary
of structural trends. Demographics trends, notably urbanisation and
suburbanisation, alongside technological changes, are expected to
boost overall demand for the movement of goods. Occupiers and
investors will become increasingly focused on the social and
environmental footprint of their properties with carbon net-zero
set to be a minimum requirement.
Technology and mechanisation are evolving processes and
operating models are changing quicker than ever before. The speed
of change is significant and while this presents a risk to many
companies (and often additional costs), it also provides
significant opportunities.
E-commerce and the automation of processes are the clear
supportive drivers for the sector. However, the digitalisation of
logistics platforms is often one of the least talked of changes,
but potentially yields some of the biggest benefits in
communication, efficiency and therefore profitability. Robotics is
increasingly adopted in warehouse management systems and this will
further influence the nature of demand and space requirements.
In the wake of Covid-19, there will be increased awareness of
public health issues. This is likely to accelerate the development
and implementation of legislation safeguarding public health from
environmentally and socially harmful activities. As seen in
Amsterdam, this could lead to re-zoning of logistics areas, the
development of "consolidation centres" and restrictions on delivery
times. Furthermore, it will ramp up the speed of adoption of
electric vehicles, which has large implications for warehouse
design and yard space to accommodate charging points and the
necessity to be located closer to key nodes on electricity grids.
Interestingly, the 15 minute city concept being adopted in Paris is
prioritising parcel deliveries over other car movements in the
recognition that supplying cities and their citizens with goods and
services is critical for enabling economic and social prosperity.
Restricting less important vehicle movements could cut congestion
and reduce delivery times further.
As a result of the abovementioned factors and the strength of
our pan-European teams, we believe that the portfolio and our
strategy is exposed to a compelling sector and we are ideally
placed to capture not only increasingly valuable index linked
income, but also further valuation uplifts. This in turn will allow
us to continue rewarding our supportive and growing shareholder
base.
Evert Castelein
Fund Manager
Aberdeen Standard Investments Ireland Limited
29 September 2021
PROPERTY PORTFOLIO
Property Tenure Principal Tenant
============================== ========= ====================
1 France, Avignon (Noves) Freehold Biocoop
============================== ========= ====================
2 France, Meung sur Loire Freehold Office Depot
============================== ========= ====================
3 Germany, Erlensee Freehold Bergler
============================== ========= ====================
4 Germany, Flörsheim Freehold DS Smith
============================== ========= ====================
5 Poland, Krakow Freehold Lynka
============================== ========= ====================
6 Poland, Warsaw Freehold DHL
============================== ========= ====================
7 Poland, Lodz Freehold Compal
============================== ========= ====================
8 Spain, Leon Freehold Decathlon
============================== ========= ====================
9 Spain, Madrid Freehold DHL
============================== ========= ====================
10 the Netherlands, Ede Freehold AS Watson (Kruidvat)
============================== ========= ====================
11 the Netherlands, Oss Freehold Orangeworks
============================== ========= ====================
12 the Netherlands, 's Heerenberg Freehold JCL Logistics
============================== ========= ====================
13 the Netherlands, Waddinxveeen Freehold Combilo
============================== ========= ====================
14 the Netherlands, Zeewolde Freehold VSH Fittings
============================== ========= ====================
15 the Netherlands, Den Hoorn Leasehold Van der Helm
============================== ========= ====================
Acquired after 30 June 2021
============================== ========= ====================
16 Spain, Barcelona Freehold Mediapost
============================== ========= ====================
INTERIM BOARD REPORT - DISCLOSURES
Principal Risks and Uncertainties
The principal risks and uncertainties affecting the Company are
set out on pages 11 to 14 of the Annual Report and Financial
Statements for the year ended December 2020 (the "2020 Annual
Report") together with details of the management of the risks and
the Company's internal controls. These risks have not changed 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 Risk: Macroeconomic;
- Financial Risk: Gearing;
- Financial Risk: Liquidity and FX Risk;
- Financial Risk: Credit Risk;
- Financial Risk: Insufficient Income Generation;
- Regulatory Risk: Compliance;
- Operational Risk: Service Providers; and
- Operational risk: 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. Covid-19 is continuing to impact 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 pandemic has impacted the Company's third party
service providers, with business continuity and home working plans
having been implemented. The Board, through the Manager, has been
closely monitoring all third party service arrangements and is
pleased to report that it has not seen any reduction in the level
of service provided to the Company to date.
Following the expiry at the end of 2020 of the transitional
arrangements relating to Brexit, some issues remain including the
potential or actual impacts on trading and supply chains for
tenants. The Board will continue to monitor developments.
Related party transactions
ASFML acts as Alternative Investment Fund Manager, Aberdeen
Standard 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 2020 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 there are 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, 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 Covid-19 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 2021; 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
29 September 2021
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE
INCOME
For the period ended 30 June 2021
1 January to 1 January to 1 January to
30 June 2021 30 June 2020 31 December 2020
==================
Unaudited Unaudited Audited
=============================== =============================== ===============================
Revenue Capital Total Revenue Capital Total Revenue Capital Total
Notes EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
======================= ========= ========= ========= ========= ========= ========= ========= ========= =========
REVENUE
Rental Income 11,121 - 11,121 9,896 - 9,896 20,257 - 20,257
Property service
charge
income 1,648 - 1,648 1,492 - 1,492 3,096 - 3,096
Other operating
income 201 - 201 88 - 88 47 - 47
================== === ========= ========= ========= ========= ========= ========= ========= ========= =========
Total Revenue 2 12,970 - 12,970 11,476 - 11,476 23,400 - 23,400
================== === ========= ========= ========= ========= ========= ========= ========= ========= =========
GAINS/(LOSSES)
ON INVESTMENTS
Gains on
Revaluation
of investment
properties 8 - 15,290 15,290 - 7,218 7,218 - 32,878 32,878
================== === ========= ========= ========= ========= ========= ========= ========= ========= =========
Total Income and
gains on
investments 12,970 15,290 28,260 11,476 7,218 18,694 23,400 32,878 56,278
======================= ========= ========= ========= ========= ========= ========= ========= ========= =========
EXPITURE
Investment
management
fee (1,201) - (1,201) (993) - (993) (2,066) - (2,066)
Direct property
expenses (1,123) - (1,123) (597) - (597) (1,305) - (1,305)
Property service
charge
exposure (1,648) - (1,648) (1,492) - (1,492) (3,096) - (3,096)
SPV property
management
fee (93) - (93) (63) - (63) (139) - (139)
Other expenses (882) - (882) (481) - (481) (1,290) - (1,290)
================== === ========= ========= ========= ========= ========= ========= ========= ========= =========
Total expenditure (4,947) - (4,947) (3,626) - (3,626) (7,896) - (7,896)
======================= ========= ========= ========= ========= ========= ========= ========= ========= =========
Net operating return
before
finance costs 8,023 15,290 23,313 7,850 7,218 15,068 15,504 32,878 48,382
======================= ========= ========= ========= ========= ========= ========= ========= ========= =========
FINANCE COSTS
======================= =============================== ================================================================
Finance costs 3 (1,373) - (1,373) (1,226) - (1,226) (2,545) - (2,545)
================== === ========= ========= ========= ========= ========= ========= ========= ========= =========
Effect of foreign
exchange
differences 53 (507) (454) - - - (829) 301 (591)
======================= ========= ========= ========= ========= ========= ========= ========= ========= =========
Net return before
taxation 6,703 14,783 21,486 6,624 7,218 13,842 12,067 33,179 45,246
======================= ========= ========= ========= ========= ========= ========= ========= ========= =========
Taxation 4 (391) (4,832) (5,223) (124) (2,024) (2,148) (228) (9,629) (9,857)
================== === ========= ========= ========= ========= ========= ========= ========= ========= =========
Net return for the
period 6,312 9,951 16,263 6,500 5,194 11,694 11,839 23,550 35,389
======================= ========= ========= ========= ========= ========= ========= ========= ========= =========
OTHER
COMPREHENSIVE
INCOME
TO BE
RECLASSIFIED TO
PROFIT OR LOSS
Currency
translation
differences on
initial
capital
proceeds - - - - 190 190 - - -
Currency
translation
on conversion
of distribution
payments - - - (783) 7 (776) - - -
Effect of
foreign
exchange
differences - - - (243) - (243) - - -
================== === ========= ========= ========= ========= ========= ========= ========= ========= =========
Other comprehensive
income - - - (1,026) 197 (829)
======================= ========= ========= ========= ========= ========= ========= ========= ========= =========
Total comprehensive
return
for the period 6,312 9,951 16,263 5,474 5,391 10,865 11,839 23,550 35,389
======================= ========= ========= ========= ========= ========= ========= ========= ========= =========
Basic and
diluted
earnings
per share 6 2.47c 3.90c 6.37c 2.77c 2.21c 4.98c 4.95c 9.84c 14.79c
================== === ========= ========= ========= ========= ========= ========= ========= ========= =========
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
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEET
30 June 2021 30 June 2020 31 December 2020
=================================
Unaudited Unaudited Audited
Notes EUR'000 EUR'000 EUR'000
============================================ ============ ============ ================
NON-CURRENT ASSETS
Investment properties 8 492,280 423,509 448,418
Deferred tax asset 4 1,081 1,323 1,425
================================= ========= ============ ============ ================
Total non-current assets 493,361 424,832 449,843
============================================ ============ ============ ================
CURRENT ASSETS
Trade and other receivables 9 15,522 11,193 9,286
Cash and cash equivalents 10 30,832 18,705 24,874
Other Assets 200 203 75
Derivative financial instruments 15 77 - 26
================================= ========= ============ ============ ================
Total current assets 46,631 30,101 34,261
============================================ ============ ============ ================
Total assets 539,992 454,933 484,104
============================================ ============ ============ ==================
CURRENT LIABILITIES
Lease liability 11 550 550 550
Bank Loans 13 19,500 - -
Trade and other payables 12 8,780 9,689 8,291
Derivative financial instruments 15 - 243 -
================================= ========= ============ ============ ==================
Total current liabilities 28,830 10,482 8,841
============================================ ============ ============ ==================
NON-CURRENT LIABILITIES
Bank Loans 13 143,453 143,425 143,331
Lease liability 11 22,487 22,751 22,620
Deferred tax liability 4 20,204 8,009 15,716
================================= ========= ============ ============ ==================
Total non-current liabilities 186,144 174,185 181,667
============================================ ============ ============ ==================
Total liabilities 214,974 184,667 190,508
============================================ ============ ============ ==================
Net assets 325,018 270,266 293,596
============================================ ============ ============ ==================
SHARE CAPITAL AND RESERVES
Share capital 14 2,970 2,700 2,756
Share premium 83,791 56,047 61,691
Special distributable reserve 182,368 187,707 185,661
Capital reserve 41,719 13,609 31,768
Revenue reserve 14,170 10,203 11,720
================================= ========= ============ ============ ==================
Equity shareholders' funds 325,018 270,266 293,596
============================================ ============ ============ ==================
Net asset value per share 7 EUR 1.24 EUR 1.13 EUR 1.20
================================= ========= ============ ============ ==================
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN
EQUITY
For the period ended 30 June 2021
Special
Notes Share Share distributable Capital Revenue
capital premium reserve reserve reserve Total
Six months ended 30 June 2021
(unaudited) EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
================================ ========= ========= ============== ========= ========= ========
Balance at 31 December 2020 2,756 61,691 185,661 31,768 11,720 293,596
Share Issue 14 214 22,325 - - - 22,539
Share Issue costs - (225) - - - (225)
Total Comprehensive return for
the period - - - 9,951 6,312 16,263
Interim Distributions paid 5 - - (3,293) - (3,862) (7,155)
================================ ========= ========= ============== ========= ========= ========
Balance at 30 June 2021 2,970 83,791 182,368 41,719 14,170 325,018
==================================== ========= ========= ============== ========= ========= ========
Six months ended 30 June 2020
(unaudited)
Balance at 31 December 2019 2,645 50,364 191,579 8,218 7,471 260,277
Share Issue 14 55 5,741 - - - 5,796
Share Issue costs - (58) - - - (58)
Total Comprehensive return for
the period - - - 5,391 5,474 10,865
Interim Distributions paid - - (3,872) - (2,742) (6,614)
================================ ========= ========= ============== ========= ========= ========
Balance at 30 June 2020 2,700 56,047 187,707 13,609 10,203 270,266
================================ ========= ========= ============== ========= ========= ========
Year ended 31 December 2020
(audited)
Balance at 31 December 2019 2,645 50,364 191,579 8,218 7,471 260,277
Share Issue 14 111 11,442 - - - 11,553
Share Issue costs - (115) - - - (115)
Total Comprehensive return for
the year - - - 23,550 11,839 35,389
Distributions paid - - (5,918) - (7,590) (13,508)
================================ ========= ========= ============== ========= ========= ========
Balance at 31 December 2020 2,756 61,691 185,661 31,768 11,720 293,596
-------------------------------- --------- --------- -------------- --------- --------- --------
UNAUDITED CONDENSED CONSOLIDATED CASH FLOW STATEMENT
As at 30 June 2021
1 January 1 January to 1 January to
to 30 June 2020 31 December
30 June 2021 Unaudited 2020
Unaudited Audited
=========================================
Notes EUR'000 EUR'000 EUR'000
============================================= ============= ============= ============
CASH FLOWS FROM OPERATING ACTIVITIES
Net gain for the period before
taxation 21,486 13,842 45,246
Adjustments for:
Amortisation of tenant incentives and
leasing costs - (1,512) -
Gains on investment properties 8 (15,290) (7,218) (32,878)
Land Leasehold Liability decreases 132 126 257
(Increase)/Decrease in operating trade
and other
receivables (6,534) 983 1,215
(Decrease)/Increase in operating
trade and other payables (207) 799 (1,270)
Decrease in other operating
assets - (156) -
Finance costs 3 1,373 1,226 2,545
Tax paid (314) - (106)
========================================= ============= ============= ============
Cash generated by operations (20,840) (5,752) (30,237)
============================================= ============= ============= ============
Net cash inflow from operating activities 646 8,090 15,009
============================================= ============= ============= ============
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of investment properties (28,490) (46,972) (46,223)
Derivative financial instruments (51) (8) (34)
Currency translation differences - (564) -
========================================= ============= ============= ============
Net cash outflow from investing activities (28,541) (47,544) (46,257)
============================================= ============= ============= ============
CASH FLOWS FROM FINANCING ACTIVITIES
Dividends paid (7,155) (6,614) (13,508)
Finance costs (806) (1,226) (1,588)
Bank loans drawn 19,500 35,682 35,201
Proceeds from share issue 22,539 5,796 11,553
Issue costs relating to share
issue (225) (58) (115)
========================================= ============= ============= ============
Net cash inflow from financing activities 33,853 33,580 31,543
============================================= ============= ============= ============
Net increase/(decrease) in cash and
cash equivalents 5,958 (5,874) 295
============================================= ============= ============= ============
Opening balance 24,874 24,579 24,579
============================================= ============= ============= ============
Closing cash and cash equivalents 10 30,832 18,705 24,874
========================================= ============= ============= ============
REPRESENTED BY
============================================= ============= ===========================
Cash at bank 30,832 18,705 24,874
============================================= ============= ============= ============
NOTES TO THE FINANCIAL STATEMENTS
1 Accounting Policies
The 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 2020.
The condensed Unaudited Consolidated Financial Statements for
the six months ended 30 June 2021 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
2020, which were prepared under full IFRS requirements as adopted
by the EU. 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 2021 and
30 June 2020 has not been audited or reviewed by the Company's
auditor.
2 Revenue
Half year ended Half year ended Year ended
30 June 2021 30 June 2020 31 December
2020
========================
Unaudited Unaudited Audited
========================
EUR'000 EUR'000 EUR'000
======================== =============== =============== ============
Rental income 11,121 9,896 20,257
Property service charge
income 1,648 1,492 3,096
Other income 201 88 47
======================== =============== =============== ============
Total revenue 12,970 11,476 23,400
======================== =============== =============== ============
Included within rental income is amortisation of rent free
periods granted.
3 Finance costs
Half year ended Half year ended Year ended
30 June 2021 30 June 2020 31 December
2020
=======================
Unaudited Unaudited Audited
=======================
EUR'000 EUR'000 EUR'000
======================= =============== =============== ============
Interest on bank loans 1,046 968 1,998
Bank interest 205 158 335
Amortisation of loan
costs 122 100 212
======================= =============== =============== ============
Total finance costs 1,373 1,226 2,545
======================= =============== =============== ============
4 Taxation
(a) Tax charge in the Group Statement of Comprehensive
Income
Half year ended Half year ended 30 Year ended
30 June 2021 June 2020 31 December 2020
===================
Unaudited Unaudited Audited
===================
Revenue Capital Total Revenue Capital Total Revenue Capital Total
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
=================== ======= ======= ======= ======= ======= ======= ======= ======= =======
Current taxation:
Overseas taxation 391 - 391 124 - 124 228 - 228
Deferred taxation:
Overseas taxation - 4,832 4,832 - 2,024 2,024 - 9,629 9,629
=================== ======= ======= ======= ======= ======= ======= ======= ======= =======
Total taxation 391 4,832 5,223 124 2,024 2,148 228 9,629 9,857
=================== ======= ======= ======= ======= ======= ======= ======= ======= =======
(b) Tax in the Group Balance Sheet
As at 30 June 2021 As at 30 June 2020 As at 31 December
2020
===================
Unaudited Unaudited Audited
===================
Revenue Capital Total Revenue Capital Total Revenue Capital Total
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
=================== ======= ======= ======= ======= ======= ======= ======= ======= =======
Deferred tax
assets:
On tax losses - 712 712 - 1,323 1,323 - 1,084 1,084
On other temporary
differences - 369 369 - - - - 341 341
=================== ======= ======= ======= ======= ======= ======= ======= ======= =======
- 1,081 1,081 - 1,323 1,323 - 1,425 1,425
=================== ======= ======= ======= ======= ======= ======= ======= ======= =======
As at 30 June 2021 As at 30 June 2020 As at 31 December
2020
====================
Unaudited Unaudited Audited
====================
Revenue Capital Total Revenue Capital Total Revenue Capital Total
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
==================== ======= ======= ======= ======= ======= ======= ======= ======= =======
Deferred tax
liabilities:
Differences between
tax and property
revaluation - 20,204 20,204 - 8,009 8,009 - 15,716 15,716
==================== ======= ======= ======= ======= ======= ======= ======= ======= =======
Total taxation
on return - 20,204 20,204 - 8,009 8,009 - 15,716 15,716
==================== ======= ======= ======= ======= ======= ======= ======= ======= =======
5 Distributions 30 June 2021
====================================================
Unaudited
====================================================
EUR'000
==================================================== ============
2020 Fourth Interim dividend of 1.24p per Share
paid 26 March 2021 3,447
==================================================== ============
2021 First Interim dividend of 1.21p per Share paid
25 June 2021 3,708
==================================================== ============
Total Dividends Paid 7,155
==================================================== ============
A fourth quarterly interim dividend for 2020 of 1.24p per Share
was paid on 26 March 2021 to shareholders on the register on 5
March 2021. The distribution was split 0.80p dividend income and
0.44p qualifying interest income.
A first quarterly interim dividend for 2021 of 1.21p per Share
was paid on 25 June 2021 to shareholders on the register on 4 June
2021. The distribution was split 0.80p dividend income and 0.41p
qualifying interest income.
6 Earnings per share (basic and 30 June 30 June 31 December
diluted) 2021 2020 2020
=====================================
Unaudited Unaudited Audited
===================================== =========== =========== ===========
Revenue net return attributable
to Ordinary shareholders (EUR'000) 6,312 6,500 11,839
Weighted average number of shares
in issue during the period 255,406,907 234,692,309 239,213,116
===================================== =========== =========== ===========
Total revenue return per ordinary
share 2.47c 2.77c 4.95c
===================================== =========== =========== ===========
Capital return attributable to
Ordinary shareholders (EUR'000) 9,951 5,194 23,550
Weighted average number of shares
in issue during the period 255,406,907 234,692,309 239,213,116
===================================== =========== =========== ===========
Total capital return per ordinary
share 3.90c 2.21c 9.84c
===================================== =========== =========== ===========
Total return per ordinary share 6.37c 4.98c 14.79c
===================================== =========== =========== ===========
Earnings per Share is calculated on the revenue and capital loss
for the period (before other comprehensive income) and is
calculated using the weighted average number of Shares in the
period of 255,406,907 Shares.
7 Net asset value per share 30 June 30 June 31 December
2021 2020 2020
========================================
Unaudited Unaudited Audited
======================================== =========== =========== ===========
Net assets attributable to shareholders
(EUR'000) 325,018 270,266 293,596
Number of shares in issue 262,950,001 239,500,001 244,500,001
======================================== =========== =========== ===========
Net asset value per share (EUR) 1.24 1.13 1.20
======================================== =========== =========== ===========
8 Investment properties 30 June 30 June 31 December
2021 2020 2020
=============================
Unaudited Unaudited Audited
=============================
EUR'000 EUR'000 EUR'000
============================= ========= ========= ===========
Opening carrying value 448,418 348,519 348,519
Purchases at cost 28,572 44,471 43,851
Gains on revaluation to fair
value 15,290 7,218 32,878
Leasehold - 23,301 23,170
============================= ========= ========= ===========
Total carrying value 492,280 423,509 448,418
============================= ========= ========= ===========
The fair value of investment properties amounted to
EUR473,900,000. The difference between the fair value and the value
per the Consolidated balance sheet at 30 June 2021 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
EUR4,658,000 and EUR23,037,000 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.
9 Trade and other receivables 30 June 30 June 31 December
2021 2020 2020
==============================
Unaudited Unaudited Audited
==============================
EUR'000 EUR'000 EUR'000
============================== ========= ========= ===========
Trade Debtors 4,274 2,652 4,130
VAT receivable 6,590 266 140
Lease incentives 4,658 4,693 4,952
Other receivables - 3,582 64
============================== ========= ========= ===========
Total receivables 15,522 11,193 9,286
============================== ========= ========= ===========
10 Cash and cash equivalents 30 June 30 June 31 December
2021 2020 2020
================================
Unaudited Unaudited Audited
================================
EUR'000 EUR'000 EUR'000
================================ ========= ========= ===========
Cash at bank 30,832 18,705 24,874
================================ ========= ========= ===========
Total cash and cash equivalents 30,832 18,705 24,874
================================ ========= ========= ===========
11 Leasehold Liability 30 June 30 June 31 December
2021 2020 2020
=====================================
Unaudited Unaudited Audited
=====================================
EUR'000 EUR'000 EUR'000
===================================== ========= ========= ===========
Maturity analysis - contractual
undiscounted cash flows
Less than one year 550 688 550
One to five years 2,201 2,201 2,201
More than five years 25,753 26,440 26,165
===================================== ========= ========= ===========
Total undiscounted lease liabilities 28,504 29,329 28,916
===================================== ========= ========= ===========
Lease liability included in the
statement of financial position
Current 550 550 550
Non - Current 22,487 22,751 22,620
===================================== ========= ========= ===========
Total lease liability included
in the statement of financial
position 23,037 23,301 23,170
===================================== ========= ========= ===========
12 Trade and other payables 30 June 30 June 31 December
2021 2020 2020
====================================
Unaudited Unaudited Audited
====================================
EUR'000 EUR'000 EUR'000
==================================== ========= ========= ===========
Rental income received in advance 1,517 2,453 2,604
Accrued acquisition and development
costs 147 891 833
Management fee payable 622 993 555
VAT payable 972 625 811
Accruals 1,346 2,193 1,048
Trade creditors 2,711 1,338 1,236
Tenant deposits 1,465 1,196 1,204
==================================== ========= ========= ===========
Total payables 8,780 9,689 8,291
==================================== ========= ========= ===========
13 Bank Loans 30 June 30 June 31 December
2021 2020 2020
===============================
Unaudited Unaudited Audited
===============================
EUR'000 EUR'000 EUR'000
=============================== ========= ========= ===========
External bank loans payable in
less than 12 months 19,500 - -
=============================== ========= ========= ===========
External bank loans payable in
greater than 12 months 143,453 143,425 143,331
=============================== ========= ========= ===========
Total bank loans 162,953 143,425 143,331
=============================== ========= ========= ===========
The total drawdown of the bank loans amounted to EUR164,100,000
of which, EUR19,500,000 was drawn on the Group's RCF at the parent
Company level provided by Investec Bank. . 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
EUR1,147,000. It is recorded in the financial statements in the
same line as bank loans.
14 Share capital 30 June 30 June 31 December
2021 2020 2020
=======================
Unaudited Unaudited Audited
=======================
EUR'000 EUR'000 EUR'000
======================= ========= ========= ===========
Opening balance 2,756 2,645 2,645
Ordinary shares issued 214 55 111
======================= ========= ========= ===========
Closing balance 2,970 2,700 2,756
======================= ========= ========= ===========
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 total number of shares authorised, issued and fully paid is
262,950,001. The nominal value of each share is GBP0.01 and amount
paid for each share was GBP1.00. On 16 March 2021, the Group
increased its share capital by the issue of 18,450,000 new shares
at 105 pence per share.
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 Level 2 Level 3 Total fair
value
EUR'000 EUR'000 EUR'000 EUR'000
=========================== ======= ======= ======= ==========
30 June 2021 (Unaudited)
Investment properties - - 492,280 492,280
30 June 2020 (Unaudited)
Investment properties - - 423,509 423,509
31 December 2020 (Audited)
Investment properties - - 448,418 448,418
=========================== ======= ======= ======= ==========
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 Level 2 Level 3 Total fair
value
EUR'000 EUR'000 EUR'000 EUR'000
================================= ======= ======= ======= ==========
30 June 2021 (Unaudited)
Derivative Financial Instruments - 77 - 77
30 June 2020 (Unaudited)
Derivative Financial Instruments - (243) - (243)
31 December 2020 (Audited)
Derivative Financial Instruments - 26 - 26
================================= ======= ======= ======= ==========
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 Aberdeen Standard Fund Managers Limited
("ASFML"). 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 ASFML on not less than 12
months' written notice.
Under the terms of the agreement portfolio management services
are delegated by ASFML to Aberdeen Standard Investments Ireland
Limited ("ASIIL"). The total management fees charged to the
Consolidated Statement of Comprehensive Income during the period
were EUR1,201,000, of which EUR622,000 was payable at the period
end. Under the terms of a Global Secretarial Agreement between
ASFML 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 EUR59,000.
17 Post balance sheet events
A second quarterly interim dividend for 2021 of 1.21p per share
was paid on 24 September 2021 to Shareholders on the register on 3
September 2021. The distribution was split 0.95p dividend income
and 0.26p qualifying interest income.
On 9 July 2021, the Group acquired a modern urban logistics
warehouse in Barcelona, Spain's second most populous city. The
purchase price of EUR18.8 million reflected a net initial yield of
3.7% and net reversionary yield of 4.7%.
On 8 September 2021, the Group announced a proposed Open Offer,
Placing, Offer for Subscription and Intermediaries Offer targeting
gross issue proceeds of approximately GBP75 million at a price of
109 pence per new Ordinary share. On 29th September the Group
announced the result of the issue, with 114.68 million new ordinary
shares being issued, raising gross proceeds of GBP125 million.
Subject to shareholder approval and following the issue of the New
Ordinary Shares, the total number of voting rights in the Company
will be 377,628,901.
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 This Half Yearly Report was approved by the Board and
authorised for issue on 29 September 2021.
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
29 September 2021
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END
IR DZGZLGLGGMZZ
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