Abrdn could sell its European Logistics Income company following a strategic review.
The company holds a portfolio of 26 operational mid-box and urban logistics real estate assets valued at €659.75m (£573m) across the Netherlands, France, Germany, Spain and Poland. The portfolio has a WAULT of 7.2 years to break and 8.6 years to expiry, with approximately two-thirds of the current rental income subject to full uncapped indexation.
The Edinburgh-headquartered global investor said today it was “undertaking a strategic review of the options available” and would consider all options that offer maximum value for its shareholders.
These include, but are not limited to, “undertaking some form of consolidation, combination, merger or comparable corporate action”, selling the entire issued share capital of the company under a “formal sale process”, and selling the company’s portfolio.
However, it added there was no certainty that any changes would result from the strategic review and that a continuation of the company’s current investment strategy with a rebased target dividend level was “a potential outcome”.
ELI chair Tony Roper said: “The board’s priority at all times is to act in the best interests of shareholders. Whilst we retain a strong conviction in the strategy, today’s proactive decision to launch a strategic review largely reflects the unprecedented macro backdrop that real estate companies are operating against and provides greater optionality to deliver shareholder value.”
The company’s annual target dividend of 5.64 cents (5p) per share remains materially uncovered. It pointed out that a reduction in the target level would be required to achieve a fully covered, sustainable dividend in the foreseeable future.
The ELI has a market capitalisation of £234m and an IFRS net asset value of €411.3m (£356.9m).
Abrdn acknowledged that it “remains of a size which might deter some potential investors due to lower share liquidity and a higher relative cost base”.
The company’s shares have continued to trade at a significant and persistent discount to NAV per share, which the board and investment manager believe does not reflect the long-term prospects of the portfolio.
A continuation vote will be proposed at its next annual general meeting, which is expected to be held in June 2024.
The statement said that, “cognisant of the feedback received from a number of shareholders in recent meetings”, this was now “an appropriate juncture at which to consider more fully the basis on which the company might best proceed, having regard for the best interests of shareholders as a whole”.
The mid-box and urban logistics investor was launched in December 2017 on the premise that e-commerce penetration in Europe was significantly behind the UK.
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