abrdn European Logistics Income

1 July 2020

Aberdeen Standard European Logistics Income PLC

Company Update

Following its announcement of earlier today that all resolutions put to the Annual General Meeting ("AGM") were passed overwhelmingly by shareholders, the Board of Aberdeen Standard European Logistics Income PLC (the "Company") is pleased to provide shareholders with the following update.

EPRA Index Inclusion

On 22 June 2020, the Company was added to the FTSE EPRA/NAREIT Global Real Estate Index Series, having satisfied the required eligibility criteria during the Index's recent Quarterly Review. Inclusion within this series is expected to result in increased liquidity in the shares and will help further broaden the Company's investor base.

Share Issuance

On 23 June 2020, the Company announced that in response to specific investor demand, it had issued 5 million new ordinary shares in the Company at a price of 105 pence per share. The shares were issued pursuant to the authority to dis-apply pre-emption rights granted by the Company's shareholders at the Company's previous AGM in June 2019. Admission became effective, and dealings in the new ordinary shares on the Main Market commenced, on Friday 26 June 2020. Immediately following their admission, the Company's issued share capital consists of 239,500,001 ordinary shares with voting rights. 

At the AGM, shareholders approved a fresh authority to issue up to 23,450,000 shares (representing 10% of the issued share capital as at the latest practicable date before the publication of the annual report), on a non-pre-emptive basis. Such shares will only be issued at a premium to the NAV per ordinary share at the time of issue.

Revolving Credit Facility

The Company is in advanced discussions with a number of debt providers regarding the provision of an enlarged Revolving Credit Facility ("RCF"). The RCF will increase the Company's flexibility to acquire new assets prior to raising fresh equity, and will reduce the impact of cash drag on the Company's investment returns. Further details of this facility are likely to be announced in Q3 2020.

Rental Collection & Dividend

A first interim dividend in respect of the year ending 31 December 2020, amounting to 1.24 pence (equivalent to 1.41 euro cents) per ordinary share, was paid to shareholders on 26 June 2020.

During the Q2 period, the Company successfully concluded negotiations with certain tenants negatively impacted by the COVID-19 pandemic and following the conclusion of this quarter, the Company confirms that 85% of Q2 rental income due was collected, slightly in excess of the forecast collection percentage of 82%. As previously disclosed, for the remaining outstanding rental income, the Investment Manager has agreed short-term rent deferrals and a small number of rent free periods, in exchange for material lease extensions.

The Board, through the Investment Manager, continues to closely monitor the performance of the Company's tenants as European countries emerge from enforced lockdowns. In light of the Q2 rental collection outcome and the current agreed tenant positions, it remains the Board's intention to pay quarterly dividends in line with the Company's dividend policy. The Q2 dividend is expected to be declared in late-August 2020.

Portfolio Valuation

As at 31 March 2020, the Company's portfolio was valued at €404.9 million (£359 million) and consists of 14 assets located across five European countries. An updated valuation at the quarter end date of 30 June 2020 is expected to be released in line with the Company's normal timetable around mid-August 2020.

The Board is pleased to note the positive development that the COVID-19 'material uncertainty' clause will no longer be applied to the Company's portfolio valuation. This follows the RICS Material Valuation Uncertainty Leaders Forum meeting on 11 June 2020 at which it was concluded that reporting a material valuation uncertainty for industrial and logistics real estate assets was no longer considered appropriate with sufficient amounts of up-to-date comparable market evidence upon which to base opinions of value. Given the unknown impact that COVID-19 might have on the real estate market in the future, valuations will be kept under frequent review.

Outlook

The Board and the Investment Manager continue to observe the strong structural tailwinds benefitting the European logistics sector and believe these have been reinforced following the onset of the COVID-19 pandemic. The Company's portfolio of 14 assets is diversified across five European countries, with 33 underlying tenants. 

The Company's three largest tenants by rental income operate either wholly or partly, in the food distribution sector and continue to experience significant demand. In addition, five of the Company's 14 properties incorporate cold storage facilities and this particular characteristic of the Company's portfolio has proven extremely resilient during the COVID-19 pandemic.

The Investment Manager sees an active pipeline of well-located "mid-box" and urban logistics assets throughout Europe. In particular, the Investment Manager is reviewing attractive sale and leaseback opportunities, a number of which were originated on an off-market basis. The Company will provide further detail as and when it is appropriate to do so. 

Further details on the Company and its property portfolio may be found on the Company's website which can be found at: http://www.eurologisticsincome.co.uk

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

Dominic Waters

Neil Brierley

Will Barnett

Alice Douglas

Denis Flanagan

LEI: 213800I9IYIKKNRT3G50