Aberdeen Standard Investments to cash in on online retail boom with £250m-target listed trust
Aberdeen Standard Investments next month will list a new closed-ended investment trust on the London Stock Exchange that it says will “tap into the rapid growth of e-commerce across Europe”, it revealed in a statement today.
The fund manager said it plans to launch the new Aberdeen Standard European Logistics Income plc vehicle with a target equity issue of £250m, and that it plans to focus on investing in European logistic properties “such as large ‘big box’ ultra-modern warehouses and local ‘last mile’ distribution centres”.
The latest data on retailing trends shows that consumers are continuing to shift more of their shopping online, with the result that such purchases and the associated deliveries continue to grow at a formidable rate, Aberdeen Standard Investments noted.
As a result, “occupier demand” for the depots and warehouses needed to cater for this growing market is strengthening, and, typically, these properties are subject to long-term continuous leases that are “annually inflation-linked”, meaning that they offer solid rental income alongside the potential for capital growth, the company added.
The new company’s lead manager will be Evert Castelein, pictured left, who will based in Aberdeen Standard Investments’ Amsterdam office.
Evert has 15 years of experience within the direct real estate market, said the company in a statement, and 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 is seeking a distribution yield of 5.5% per annum, predominantly in the form of dividends, and a total return for investors of 7.5% per annum.
Proceeds are expected to be fully invested within 12 months, it said, adding that it expected that some “modest leverage” will be used, taking advantage of the competitive cost of finance in Europe.
Aberdeen Standard Investments plans to raise equity through “an initial placing and offer for subscription (including an intermediaries offer), with admission to the Premium segment of the official list of the UK Listing Authority, and to dealings on the London Stock Exchange, which are expected to commence in the second week of December”.
Global head of real estate investment research for Aberdeen Standard Investments Andrew Allen said that the European logistics market is “already sizeable” but would develop fast “as e-commerce expands over the next three years”.
Growth ‘driven by major players such as Amazon’
This will mean growth that will outpace that in the UK and will therefore create demand “for new large distribution warehouses across the region”, said Allen.
“At the same time,” he added, “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,” he said.
Europe would also benefit, he said, 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.”
The company said that it was the second largest European real estate investment manager, with presence across Europe that meant 25 offices in 14 countries, managing 144 logistics properties with a total value of €2.6bn across ten European countries.