Abrdn logistics fund buys €227m Madrid warehouses

Abrdn’s Aberdeen Standard European Logistics Income plc (ASLI) announced the acquisition of a portfolio of newly constructed last-mile logistics warehouses “with excellent sustainability credentials” located at Gavilanes in the first ring of Madrid, Spain, for €227 million.

The fund said Abrdn’s European logistics platform continues to grow and it is confident this will provide further near-term investment opportunities.

The portfolio is let to five tenants, with Amazon Europe accounting for 43% of the total portfolio rental income.

Global food retailer Carrefour, UK electric delivery vehicle maker Arrival and Spanish companies Talentum and MCR comprise the remaining portfolio tenants.

“The portfolio has been acquired for €227 million, representing a net initial yield of 3.4%,” said the fund.

“All leases are upward only, annual inflation linked, with strong rental growth potential … Attractive unexpired lease term of 14.8 years to expiry and 8.7 years to break.”

ASLI chairman Tony Roper said: “Raising equity in September was a significant milestone for the company and reflected our strong conviction in the Continental European logistics proposition.

“Having stated an ambition to scale the company, this substantial acquisition enables us to invest the equity proceeds within three months and provide shareholders with further exposure to high-quality, well-located logistics assets with inflation protected income.

“The investment manager’s scale and local presence continues to provide the company with a strong source of investment opportunities and we are excited for the future prospects of the company.”

ASLI investment manager Evert Castelein said: “This is an extremely rare opportunity to acquire a portfolio of truly last-mile warehouses, leased to investment grade counterparties, in one of Europe’s nascent but fastest growing e-commerce markets.

“Furthermore, the scale, specification and market leading environmental credentials increase its uniqueness as an investment proposition.

“This acquisition further increases the weighting of the company’s assets to last-mile logistics, where a number of drivers are forecast to provide strong future rental income growth.

“Despite recent growth, Continental Europe remains materially behind the UK in terms of e-commerce sales penetration and we believe this provides a compelling backdrop for further strong performance.

“Our Madrid-based transaction team played a crucial role in securing this transaction and completing the required due diligence over a short timescale.

“This acquisition has once again highlighted the importance of having local teams with strong relationships and a deep understanding of the key local market drivers.

“The Abrdn European logistics platform continues to grow and we are confident this will provide further near-term attractive investment opportunities.”