Aberdeen Standard European Logistics Income (ASLI) has built a portfolio of 10 assets, invested all the money it raised at IPO and has declared dividends totalling 3p per share in respect of its first accounting period (in-line with its target). Borrowing facilities are being arranged that will fund the purchase of one more asset and meet stage payments for construction projects that it has agreed to finance.
The growth of online shopping in Europe is transforming the logistics infrastructure that supports the retail market, which includes warehousing. Investors are drawn to the attractive prospective returns available from this sector and this has pushed up the prices of these assets, depressing their yields (which are income divided by value) in the process. In response, the ASLI board and manager have taken the commendable step of cutting the management fee, but have also trimmed the target dividend from 5.5% of the IPO price to 5.0% for ASLI’s second accounting year.
The manager and board are confident that the European logistics sector will continue to offer many attractive investment opportunities, and their intention is to seek to expand the company in due course.
ASLI invests in a diversified portfolio of ‘big box’ logistics (huge regional/national warehouses) and ‘last mile’ urban warehouse (usually smaller warehouses located closer to the end consumer) assets in Europe (this includes both the UK and the Nordic countries but, in practice the UK is unlikely to figure in the portfolio) with the aim of providing its shareholders with a regular and attractive level of income return (targeting a 3% yield on the IPO price in its first accounting period and a 5% yield in its second accounting year, both in euro terms) together with the potential for long-term income and capital growth (target total return of 7.5% a year in euros).