The Board of abrdn European Logistics Income plc (the "Company") announces the outcome of the Strategic Review and Formal Sale Process that commenced on 27 November 2023. The Board launched the Strategic Review recognising that the Company faces a number of challenges, at both a macro and company specific level. As previously noted, these challenges include the Company's materially uncovered annual target dividend of 5.64 cents (?) per share, a market capitalisation of £234 million liable to deter some potential investors due to lower share liquidity, and the Company's shares trading at a significant and persistent discount to the net asset value per share.

Additionally, in line with its constitutional terms as set out on launch in December 2017, the Company has proposed a continuation vote at the forthcoming Annual General Meeting on 24 June 2024. Following the commencement of the Strategic Review, the Company's Financial Adviser, Investec Bank plc ("Investec") has engaged with a significant number of interested parties with a view to facilitating an indicative proposal which would fulfil the Strategic Review's objective of maximising returns for Shareholders. Following a period of due diligence, eleven interested parties submitted an initial indicative proposal in the first quarter of 2024.

Submissions included proposals regarding all-share mergers, changes to the investment management arrangements, recapitalisation schemes and cash offers for the portfolio or Company. Reflecting continued Shareholder feedback, the Board and Investec focused efforts on those submissions proposing a cash offer for the portfolio or the Company. Access to additional confidential non-public Company information was provided and following a further period of due diligence, remaining interested parties were invited to submit revised offers, as a result of which a limited number of indicative offers were forthcoming.

As part of the Strategic Review, the Company's investment manager, abrdn Fund Managers Limited (the "Investment Manager"), provided the Board with analysis of, and a proposal involving, a managed disposal of the portfolio in a timely manner. The analysis comprised a range of detailed disposal scenarios over an illustrative period of 12-24 months for the entire portfolio, with capital being returned to Shareholders from Fourth Quarter 2024 and expected quarterly thereafter; and it considered the impact of likely disposal costs, local applicable capital gains taxes, the ongoing running costs of the Company and the optimal approach to repaying or maximising the value of the Company's fixed cost debt. Following a detailed review of the options available to the Company and after consultation with its advisers, as well as taking into account feedback received from a number of larger Shareholders, the Board has concluded that it would be in the best interests of Shareholders as a whole to put forward a proposal for a managed wind-down of the Company (the "Managed Wind-Down").

In arriving at this decision, the Board placed particular importance on the following factors: Shareholder Value Maximisation: the indicative potential value from the Managed Wind-Down is materially in excess of the net value achievable from the indicative cash offers received, all of which were subject to a number of preconditions and all of which represented material discounts to the Company's current net asset value. With an EPRA vacancy rate of 6.5%, the Managed Wind-Down provides the potential opportunity to capture the value associated with letting this vacant space ahead of a disposal. Feedback from Potential Offerors: a significant majority of interested parties communicated a strong preference to acquire assets within certain geographies or individual assets as an alternative to acquiring the entire portfolio, providing comfort as to the likely level of offeror interest in the Managed Wind-Down process.

With a diversified portfolio of 25 urban and mid-box logistics assets with an aggregate value of approximately ?616 million, the pool of potential offerors is expected to be large, with many of these parties now conversant with the Company's assets. Indicative Timeline: while further details will be provided in due course, under the Managed Wind-Down it is expected that the majority of the assets will have been disposed of by the end of the second quarter of 2025. The Company's advisers have completed a substantial amount of preparatory work including commissioning fully updated technical and environmental due diligence reports for the entire portfolio, ensuring that the Managed Wind-Down process can commence promptly after Shareholder approval of the required amendments to the Company's investment objective and investment policy.

Macroeconomic Backdrop: alongside positive thematic demand drivers for logistics tenants such as e-commerce and nearshoring, a forecast lower interest rate environment in the second half of 2024 and first half of 2025 is expected to support transaction volumes and pricing, resulting in a more favourable investment backdrop against which to wind down the portfolio. As the Strategic Review and Formal Sale Process have now concluded, the Company is no longer in an "offer period" as defined by the City Code on Takeovers and Mergers (the "Takeover Code") and the disclosure requirements pursuant to Rule 8 of the Takeover Code are no longer applicable from the time of this announcement.