Abrdn European Logistics Income (ASLI ) is to wind down after failing to strike a deal with one of the ‘significant number’ of parties that showed interest in the real estate investment trust (Reit).

After a six-month strategic review born from frustration at the wide discount on the share price, the board of the £251m portfolio of warehouses and distribution depots has concluded that a managed disposal process and return of capital is in the best interests of shareholders.

Chair Tony Roper said the board had received 11 approaches proposing a range of options, including all-share mergers, plans to change the investment management team, recapitalisations and cash offers.

However, he said as all were priced at ‘material discounts’ to net asset value (NAV), none could compare with the shareholder value obtained from selling the trust’s assets over the next year.

In addition, he said the Reit’s current vacancy rate of 6.5% ‘provides the potential opportunity to capture the value associated with letting this vacant space ahead of a disposal’.

The board believes the majority of assets can be sold by the end of the second quarter of 2025 given the fund has ‘completed a substantial amount of preparatory work’ on the 25 urban and mid-box logistics assets to enable swifter sales.

A significant number of the interested parties that came forward when ASLI hoisted the ‘for sale’ sign were keen to acquire assets within certain geographies or individual assets rather than the whole portfolio.

The board said this provides ‘comfort as to the likely level of offer or interest in the managed wind-down process’ and predicted that the ‘pool of potential offerors is expected to be large’.

The news was not unexpected and the shares firmed 1% to 63p – 37% below their 2017 launch price and trading at about 22% under their estimated NAV of 81p on a 6% yield.

The macroeconomic backdrop that ASLI will be offloading assets into will also be more favourable, as drivers such as e-commerce and nearshoring continue, and lower interest rates in the second half of the year continue and will ‘support transaction volumes and pricing,’ Roper said.

Assuming shareholders approve the wind-down, the board will continue to pay dividends to maintain the investment trust status but the level of distributions will decline as the portfolio reduces in size and capital is returned to shareholders.

Deutsche Numis analyst Andrew Rees said transaction volumes had been subdued over the past 18 months but that the ‘industrial and logistics sector remains sought-after, particularly for urban, last-mile buildings, and therefore assuming the wind-down is approved by shareholders, we would expect the sales processes to yield swift outcomes for several assets’.

ASLI’s decision to wind down comes on the same day that stablemate Asia Dragon (DGN ) announced a strategic review that could see it dismiss fund manager Abrdn or merge with another trust. The past 17 months have been bruising for Abrdn’s investment company range, which has shrunk from 19 to a dozen trusts as a result of wind-downs, mergers and mandate losses.