Aberdeen Standard Investments launches European logistics investment company

The global asset manager said the new company will tap into the rapid growth of e-commerce across Europe by investing in European logistic properties such as large ‘big box’ ultra-modern warehouses and local ‘last mile’ distribution centres.

Aberdeen Standard cited a strengthening of occupier demand and the benefit of long-term continuous leases for these properties which are annually inflation linked, thereby providing solid rental income alongside the potential for capital growth.

Whilst the company will invest directly in property, it will qualify as a closed-ended investment trust listed on the London Stock Exchange, therefore offering investors liquidity through the secondary market.

The lead manager of the company will be Evert Castelein, based in Aberdeen Standard Investments’ Amsterdam office.

Evert has 15 years of experience within the direct real estate market. He will be supported by two assistant fund managers – Ross Braithwaite and Attila Molnar - and by Andrew Allen, global head of real estate investment research.

The company will target a distribution yield of 5.5 per cent per annum, predominantly in the form of dividends, and a total return for investors of 7.5 per cent per annum (both in Euro terms). The target equity issue is £250 million, and the proceeds are expected to be fully invested within 12 months. It is expected that some modest leverage will be used, taking advantage of the competitive cost of finance in Europe.

The company will be raising equity by way of an Initial Placing and Offer for Subscription (including an Intermediaries Offer), with admission to the Premium segment of the Official List of the UKLA and to dealings on the London Stock Exchange, which are expected to commence in the second week of December.

Andrew Allen, global head of real estate investment research, Aberdeen Standard Investments added: “The European logistics market is already sizable but developing fast as e-commerce expands over the next three years, outpacing the UK and creating demand for new large distribution warehouses across the region. At the same time, as population growth rates rise in key European cities, competition for land intensifies – prompting a ‘race for space’, particularly for ‘last mile’ delivery on the outskirts of towns and cities. The new trust will exploit this supply-demand imbalance in the sector, as we believe this will support rental income and fuel growth.

“Europe will also benefit from on-going progress in global trade and an evolution in the way goods are manufactured, sold and distributed in a more integrated way, driven by the major players such as Amazon, and couriers like DHL and Fedex.”

Andrew Creighton, head of real estate continental Europe, Aberdeen Standard Investments added: “We have considerable resources on the ground across Europe, allowing us to buy assets in a range of countries and construct a truly diversified portfolio of properties. Investment opportunities range from major distribution hubs for online giants, to single warehouses close to urban areas as customers demand faster delivery of goods.”

As the second largest European real estate investment manager, Aberdeen Standard Investments has an extensive presence across Europe with 25 offices in 14 countries, an established track record managing real estate assets in listed closed-ended structures and 20 years extensive investing experience in logistics, managing 144 logistics properties with a total value of €2.6bn across ten European countries.