abrdn European Logistics Income Reports Interim Results with Significant Asset Sales in Wind-Down

• 4p per share paid on 20 March (£16.5 million).
• 12p per share paid on 13 August (£49.5 million).
• 13p per share payable on 30 September (£53.6 million).

Total returned to date: 29.0p per share, or £119.5 million. The Board cites a remaining NAV less estimated costs of 42.4p, after the announced B Share distributions, with up to a further 2p potential latent capital gains tax depending on structures and pricing of remaining disposals.

Performance drivers: valuations down, discount narrows

H1 2025 NAV total return was -3.4% in euro terms, driven by €20.2 million of property valuation losses and a small realised disposal loss. Revenue earnings remained positive, but capital losses pulled IFRS EPS to -2.8c.

In contrast, the share price total return was +16.2% in sterling as the discount to NAV tightened to 10.8% from 21.9% at year end. The share price closed at 62p on 30 June versus a NAV of 69.5p.

Opinion: discount compression is what matters in a wind-down. Investors are effectively arbitraging the gap between market price and expected net realisation after costs. The Board’s pace on sales and capital returns is the catalyst here.

Balance sheet and debt: rapid degearing post period end

At 30 June, debt stood at €207.0 million at a fixed all-in 2.30% and LTV of 36.6%. Subsequent sales allowed €126.8 million of repayments, bringing total bank debt down to €80.2 million at a current all-in rate of 2.25%.

The €34.3 million Berlin Hyp facility was extended to 6 June 2026, now floating with an all-in rate of 3.3% and no early repayment penalties if assets are sold earlier. With disposals ongoing, gearing will naturally fluctuate, but remains well below the 50% cap.

Opinion: cutting gross debt to €80.2 million materially reduces risk and interest drag, and improves flexibility for the remaining sales programme.

Income, dividends and what changes next

ASLI paid 2.03c per share in H1 2025 distributions. However, with the portfolio shrinking, rental income is falling and more day-to-day costs will be met from capital. From Q3, distributions will be made solely to maintain UK investment trust compliance and may be designated as “qualifying interest income” under the interest streaming regime.

Translation: do not expect the historic dividend cadence. The key return is capital via B Shares as properties are sold.

Operations and leasing: value protection to aid sales

Active asset management continues to support pricing and liquidity:

• Vacancy reduced from 11.1% in December 2023 to below 3% by June 2025.
• Leasing progress in the Netherlands (Ede), Poland (Krakow), Spain (Gavilanes 3C) and post period in France (Gevrey) helps present cleaner, income-backed assets to buyers.
• At 30 June, the portfolio comprised 22 properties with a WAULT of 6.2 years to break and 7.5 years to expiry.

Opinion: stabilising occupancy and extending leases where sensible improves exit liquidity and reduces the risk of price chips at completion.

Macro and market context: reasons for caution and optimism

The ECB deposit rate sits at 2.0%. The manager expects logistics yields to tighten gradually into 2026 as liquidity improves, although near-term deal activity remains patchy given geopolitics and tariff risks. The Board flags that softer valuations and limited competitive tension in some markets could impact timing and pricing for remaining disposals.

Opinion: the macro backdrop has improved versus 2023, but not enough to guarantee smooth exits for every asset. The strategy remains to balance best achievable value against speed and carrying costs.

Why this update matters for shareholders

• Execution risk is falling. With 17 of 27 assets sold and debt sharply down, delivery risk looks lower.
• The discount has narrowed, but there is still a spread to the stated NAV and liquidation NAV. Future returns hinge on realisation prices versus valuations, disposal costs and taxes.
• Cash is flowing back. 29p already returned, with a stated remaining NAV less estimated costs of 42.4p and up to 2p possible latent CGT depending on deal structures.

Net-net, this is a credible wind-down in a tricky market. The main negative is the continued valuation pressure in H1. The positive is clear operational delivery on sales, degearing and capital returns.

What to watch next

• Completion of the seven targeted disposals in Q4 2025 and pricing versus book values.
• Any additional B Share returns timed off those completions.
• Further narrowing or widening of the discount as the realisation profile becomes clearer.
• Updates on the final three assets and the overall timetable to liquidation by no later than Q2 2026.

I will keep tracking the sale prices versus carrying values and the cadence of B Share payouts. In a wind-down, timing and execution are everything.