Continental European investor abrdn European Logistics Income, which is managed by abrdn, said that its portfolio valuation was “resilient” and it was well placed to capture long-term income growth in its full-year results for the year ended 31 December 2022.
The investor said its “differentiated strategy underpinned by high indexation and occupier demand” had seen its net asset value (NAV) per ordinary share decrease by 7.75% to €1.19 (31 December 2021: €1.29), despite the “highly volatile macroeconomic backdrop”. Its like-for-like portfolio valuation decreased by 4%.
It attributed the decrease to market-wide outward yield movements as a result of rising interest rates. Its IFRS NAV total return was -3.8% (31 December 2022: 12.4%) and its IFRS earnings per share was -4.51 cents (31 December 2021: 15.43 cents).
Its loan to value was 34% at 31 December (31 December 2021 25.1%) and it said it had low all-in cost of fixed term debt of 2.01%, with no major re-financings due until mid-2025.
The investor said it had recorded strong rent collection in the financial year, and had increased annualised passing rent by 18% to €34.7m (31 December 2021: €29.4m), striking leasing deals with the likes of ADER on previously vacant space at Madrid Phase II in Spain. It also agreed a new 9.5 year lease with Dachser France at a property at La Creche, Niort (pictured), 3% ahead of previous annual rent payable
Tony Roper, chairman of abrdn European Logistics Income, said: “Our core focus over the coming months will be on optimising the current portfolio in terms of both occupancy and earnings growth. We retain a strong conviction in our investment strategy and during this period of inflationary pressure, the company’s indexation characteristics should provide a level of inflation protection alongside our attractive dividend yield.
“Furthermore, we believe a combination of the portfolio valuation resilience versus other commercial real estate funds and the growth prospects in our key markets versus the UK provides an attractive differentiator for investors.”
Troels Andersen, lead fund manager at abrdn European Logistics Income, added: “Continental European logistics real estate is well placed to navigate the current high inflationary environment due to its CPI indexation characteristics and robust market fundamentals. Backed by the tailwinds of record-low vacancies and structural demand drivers, rental growth is expected to retain its momentum in most European logistics hotspots.
“While lingering economic, political, and financial market uncertainties may disrupt investment trends and present select occupational challenges in the short-term, the favourable underlying trends including growing e-commerce penetration, onshoring and supply chain reconfiguration/modernisation should remain important drivers for the sector.”
