LONDON: Aberdeen Standard European Logistics Income (ASLI) has signed an agreement to acquire a freehold logistics warehouse in ‘s-Heerenberg, Netherlands, for a net value of €24.0 million providing an expected net initial yield of 5.0%. The transaction is expected to close in July 2019. [the_ad id=”31605″]This is a freehold facility providing a high quality warehouse, cross dock and 40 loading bays covering almost 23,000 square metres. The total site size of 45,000 square metres offers expansion opportunities in the future.
The warehouse has an attractive income profile and is fully leased to third-party logistics operator JCL Logistics Benelux BV, a wholly owned subsidiary of JCL Switzerland AG. The lease has a remaining term of 12.5 years and is fully CPI indexed. JCL have a long history in ‘s-Heerenberg and provide services to their clients who produce bikes and associated parts in Asia and the USA.
‘s-Heerenberg itself is located close to the German border (Emmerich barge terminal) and has good accessibility to the A12 and A3 motorways with the A12 being the main connection between the port of Rotterdam and Germany. Other operators in the area include Main Freight and DSV.
ASLI has also just completed on the newly built warehouse in Zeewolde, Netherlands, for the previously indicated purchase price of €29.25 million providing a net initial yield of 5.0%. The agreement with developer Borghese was structured as a forward funded transaction with a 2.55% coupon rate.
This high quality freehold property had been pre-let to VSH Fittings B.V., a strong covenant tenant, on a 15 year lease commencing in June 2019 with capped CPI indexation of 2.4% per annum in accordance with local provisions.
Zeewolde is in the heart of the Netherlands in the province of Flevoland, close to Almere, the fastest growing municipality in the Netherlands and Lelystad, an ideal location for national distribution. Zeewolde is also ideally situated close to several motorways, the A6, A27 and A28. In addition to its central location in the Netherlands, Zeewolde is well positioned with regards the availability of labour and the relatively low land costs, resulting in attractive rent levels.
ASLI also finalised and signed an agreement for long term financing on its Dutch properties in Ede, Oss and Waddinxveen. This secured loan facility arranged with Berlin Hyp for a total value of €37.7 million has been fixed for a six year term at an attractive all-in interest rate. Monies have been used to finance the purchase of ‘s-Heerenberg in addition to further stage payments on the forward funded project in Oss and final completion payment on Zeewolde.
Evert Castelein, the Company’s Fund Manager, commented: “This additional facility in ‘s-Heerenberg is another excellent addition to ASLI’s property portfolio and will take the number of assets in the portfolio to eleven including the soon to be completed project in Oss. I am particularly pleased to see the handover of Zeewolde and the commencement of full income generation. This warehouse has been built to the latest standards for modern logistics and this together with the central location and the long lease with a strong covenant tenant will generate a durable income stream for the Company.
“I am very happy with the quality portfolio that we have built up across five countries in Europe which reflects a highly sustainable indexed income stream which helps protect against inflation. With the additional competitive bank funding in place our asset-level gearing will sit at or close to 35% on completion of the remaining forward funded project. Investment demand in the logistics sector remains strong. Based on healthy fundamentals we believe that the medium to long term outlook for the sector remains very favourable. Despite some tailwinds from economic output in certain areas, the structural shifts in consumption patterns and overall demand drivers remain supportive, while construction levels are relatively low. We continue to see a healthy pipeline of deal flow which we apply our stringent quality criteria against.”