29 May 2024

LEI: 213800I9IYIKKNRT3G50

abrdn European Logistics Income plc

Portfolio Update and Unaudited Net Asset Value as at 31 March 2024

29 May 2024 - abrdn European Logistics Income plc (the "Company" or "ASLI"), the Company which invests in a diversified portfolio of European logistics real estate, announces its unaudited Net Asset Value ("NAV") for the quarter ended 31 March 2024.

Summary

 *Based on revised figures following 2023 audit

Troels Andersen, Lead Fund Manager, abrdn, commented:

"Market expectation is mounting that the ECB will start cutting interest rates at its next monetary policy meeting in June, and despite a small valuation decrease this last quarter, economic indicators are more positive for the second half of this year. With the improving backdrop, and key long-term structural drivers underpinning the logistics sector's rental and capital growth prospects, we expect to see increasing investment activity for this high conviction asset class. In the near-term, we are focused on letting up the remaining vacant space in Madrid and leveraging our local expertise to deliver indexation-driven rental uplifts, which reflect the strength of sub markets where the portfolio is located."

Performance

The independent unaudited external valuation of the Company's property portfolio undertaken by Savills (UK) Limited decreased on a like-for-like basis by €10 million, or 1.6%, in the quarter. The French and German assets witnessed the biggest declines (-5.2% and -4.2% respectively) with the balance of the portfolio broadly flat.

For the year ended 31 March 2024, the Company's net asset value total return with quarterly distributions reinvested was -13.9% in Euro terms (-16.2% in sterling terms). As at 31 March 2024, the Company's share price was 60.8p, and as at the date of this announcement the share price was 62.8p.

Rent Collection & Portfolio Update

As at the date of this announcement, 96% of the expected rental income for the quarter ended 31 March 2024 has been collected.

During the quarter, the Company concluded discussions and agreed a surrender of the lease agreement with Arrival, taking full possession of Units 3A, B and C, Gavilanes, Madrid. As previously indicated, both the Investment Manager and the Board believe that this was the best outcome, due to persistent non-payment of rent and Arrival's financial situation, allowing the Company to take full control of these units and progress an active leasing programme.

Reflecting the demand for Grade-A, sustainable logistics space in Spain, the Company signed a new lease for 5,131 sqm of space, at Unit 3B with Spanish transportation company METHOD Advanced Logistics ("METHOD"), completed 8.7% above the previous passing rent. METHOD operates a fully flexible shipment operation including large, complex bulky goods, as well as smaller, nimble, last mile options. The new lease provides for a three plus two year agreement. METHOD is implementing a capex programme at its own expense to deliver four new docks in the façade of the building. The Investment Manager's locally-based team continues to actively market the remaining units with strong interest in the adjoining c. 6,000 sqm and c. 16,500 sqm units at Phase 3, Gavilanes.

During the quarter, the Company also completed the sale of its 30,180 sqm vacant warehouse in Meung sur Loire, France, to Castignac. The €17.5 million disposal price was in line with the 31 December 2023 valuation and reflected a c. 7% discount to the 30 September 2023 valuation. The transaction increased the portfolio occupancy rate and represented the Company's second disposal in the last 12 months. The proceeds from the sale and associated repayment of an €11 million securitised loan with Bayern LB reduced the Company's LTV to 38.2%, with an all-in interest rate of 2.0%, as well as improving the Company's cash position.

The weighted average unexpired lease term (to break) now stands at 6.8 years with the weighted average lease term (to expiry) now 8.1 years.

Debt Financing

At the end of the quarter, the Company's fixed rate debt facilities totalled €248.5 million at an average all-in interest rate of 2.0%, the earliest refinancing of debt is required in mid-2025. The current loan-to-value of 38.2% is marginally above the Company's target of c. 35%.

Interim Dividend

Following the conclusion of the Strategic Review, the Company announced an interim dividend for 2024 of 1.41c (GBP - 1.21p), payable on 5 July 2024 to shareholders on the register on 7 June 2024 (ex-date of 6 June 2024).

Breakdown of NAV Movement

Set out below is a breakdown of the change to the unaudited net asset value per Ordinary Share over the period from 1 January 2024 to 31 March 2024. The unaudited net asset value has been prepared under International Financial Reporting Standards ("IFRS").

EPRA Net Tangible Assets per share is 93.7 euro cents, which excludes deferred tax liability.

Net Asset Value analysis as at 31 March 2024 (unaudited)

*After lease incentive adjustment

The NAV per share at 31 March 2024 is based on 412,174,356 shares of 1 pence each, being the total number of Ordinary shares in issue at that time. As at the date of this announcement, the Company's share capital consists of 412,174,356 Ordinary shares with voting rights.

The Board is not aware of any other significant events or transactions which have occurred between 31 March 2024 and the date of publication of this statement which would have a material impact on the financial position of the Company.

Details of the Company and its property portfolio may be found on the Company's website at: http://www.eurologisticsincome.co.uk

For further information please contact:

abrdn Fund Managers Limited                                         

Ben Heatley                                                                          +44 (0) 20 7156 2382

Investec Bank plc                                                                 +44 (0) 20 7597 4000

David Yovichic

Denis Flanagan

FTI Consulting                                                                       +44 (0) 20 3727 1000

Dido Laurimore

Richard Gotla

Oliver Parsons