Swedish Logistic Property's Bold Move: A SEK 1.1 Billion Share Issue
September 5, 2024, 4:06 pm
In a significant financial maneuver, Swedish Logistic Property AB (SLP) has announced a directed new class B share issue, raising approximately SEK 1.1 billion. This decision, made on September 4, 2024, marks a pivotal moment for the company, reflecting its aggressive growth strategy in the logistics real estate sector.
SLP is not just another player in the real estate game. It specializes in acquiring, developing, and managing logistics properties with a keen focus on sustainability. Since its inception in 2019, SLP has been on a growth trajectory, averaging one acquisition per month. The company has successfully completed 25 acquisitions worth around SEK 3.5 billion and invested SEK 1.4 billion in existing properties and new projects since its IPO in March 2022.
The recent share issue is a response to the strong demand for modern logistics properties. Investors are eager to tap into this burgeoning market, and SLP aims to capitalize on this momentum. The funds raised will be directed towards property acquisitions and new construction projects, targeting a net initial yield of over 6%. Additionally, SLP plans to invest in renovations and energy-saving projects, expecting a net yield on cost of 10-12%. This strategic allocation of resources underscores SLP's commitment to enhancing its portfolio while maintaining a stable financial risk profile.
The share issue involved the issuance of 31,428,572 class B shares at a subscription price of SEK 35 per share. This price represents a 30% premium to the net asset value (NAV) per share as of June 30, 2024, and a slight discount of 4.9% compared to the closing price on Nasdaq Stockholm on the day of the announcement. The increase in the share issue from SEK 1 billion to SEK 1.1 billion was driven by robust investor interest, highlighting the market's confidence in SLP's growth potential.
The decision to deviate from shareholders' pre-emptive rights was strategic. The Board of Directors assessed that a directed share issue would diversify and strengthen the shareholder base, particularly with institutional investors. This move is expected to enhance the liquidity of SLP's shares, a crucial factor for long-term growth. A rights issue, while offering existing shareholders the chance to maintain their stakes, would have taken longer to implement and exposed the company to greater market volatility.
SLP's financial health is also a focal point. The company anticipates a decrease in its loan-to-value ratio from 46.8% to approximately 37.5% as a result of the share issue. This reduction is significant, as it positions SLP to pursue further acquisitions without over-leveraging. The company targets a medium-term average annual growth in NAV per share and profit from property management of 15%, a goal it has consistently achieved since its operations began.
The share issue will increase the total number of shares in SLP from 226,641,235 to 258,069,807. This expansion will dilute existing shareholders by approximately 12.2% based on the total number of shares and 7.6% based on voting rights. While dilution can be a concern for existing investors, the potential for enhanced growth and value creation often outweighs these fears.
The logistics sector is experiencing a renaissance. E-commerce growth, coupled with the need for efficient supply chains, has created a surge in demand for logistics properties. SLP is well-positioned to take advantage of this trend. The company has a robust pipeline of potential investment opportunities, and the net proceeds from the share issue are expected to be deployed within 6-9 months.
Advisors for this share issue include ABG Sundal Collier, Nordea, Swedbank, and Van Lanschot Kempen, who acted as Joint Global Coordinators and Bookrunners. Their involvement underscores the seriousness of this financial endeavor and the confidence in SLP's strategic direction.
In conclusion, SLP's SEK 1.1 billion share issue is more than just a financial transaction. It is a bold statement of intent. The company is positioning itself to seize opportunities in a thriving logistics market while ensuring financial stability. As SLP continues to grow and adapt, it remains a key player in the logistics real estate sector, promising value for both tenants and shareholders alike. The road ahead is paved with potential, and SLP is ready to navigate it.
SLP is not just another player in the real estate game. It specializes in acquiring, developing, and managing logistics properties with a keen focus on sustainability. Since its inception in 2019, SLP has been on a growth trajectory, averaging one acquisition per month. The company has successfully completed 25 acquisitions worth around SEK 3.5 billion and invested SEK 1.4 billion in existing properties and new projects since its IPO in March 2022.
The recent share issue is a response to the strong demand for modern logistics properties. Investors are eager to tap into this burgeoning market, and SLP aims to capitalize on this momentum. The funds raised will be directed towards property acquisitions and new construction projects, targeting a net initial yield of over 6%. Additionally, SLP plans to invest in renovations and energy-saving projects, expecting a net yield on cost of 10-12%. This strategic allocation of resources underscores SLP's commitment to enhancing its portfolio while maintaining a stable financial risk profile.
The share issue involved the issuance of 31,428,572 class B shares at a subscription price of SEK 35 per share. This price represents a 30% premium to the net asset value (NAV) per share as of June 30, 2024, and a slight discount of 4.9% compared to the closing price on Nasdaq Stockholm on the day of the announcement. The increase in the share issue from SEK 1 billion to SEK 1.1 billion was driven by robust investor interest, highlighting the market's confidence in SLP's growth potential.
The decision to deviate from shareholders' pre-emptive rights was strategic. The Board of Directors assessed that a directed share issue would diversify and strengthen the shareholder base, particularly with institutional investors. This move is expected to enhance the liquidity of SLP's shares, a crucial factor for long-term growth. A rights issue, while offering existing shareholders the chance to maintain their stakes, would have taken longer to implement and exposed the company to greater market volatility.
SLP's financial health is also a focal point. The company anticipates a decrease in its loan-to-value ratio from 46.8% to approximately 37.5% as a result of the share issue. This reduction is significant, as it positions SLP to pursue further acquisitions without over-leveraging. The company targets a medium-term average annual growth in NAV per share and profit from property management of 15%, a goal it has consistently achieved since its operations began.
The share issue will increase the total number of shares in SLP from 226,641,235 to 258,069,807. This expansion will dilute existing shareholders by approximately 12.2% based on the total number of shares and 7.6% based on voting rights. While dilution can be a concern for existing investors, the potential for enhanced growth and value creation often outweighs these fears.
The logistics sector is experiencing a renaissance. E-commerce growth, coupled with the need for efficient supply chains, has created a surge in demand for logistics properties. SLP is well-positioned to take advantage of this trend. The company has a robust pipeline of potential investment opportunities, and the net proceeds from the share issue are expected to be deployed within 6-9 months.
Advisors for this share issue include ABG Sundal Collier, Nordea, Swedbank, and Van Lanschot Kempen, who acted as Joint Global Coordinators and Bookrunners. Their involvement underscores the seriousness of this financial endeavor and the confidence in SLP's strategic direction.
In conclusion, SLP's SEK 1.1 billion share issue is more than just a financial transaction. It is a bold statement of intent. The company is positioning itself to seize opportunities in a thriving logistics market while ensuring financial stability. As SLP continues to grow and adapt, it remains a key player in the logistics real estate sector, promising value for both tenants and shareholders alike. The road ahead is paved with potential, and SLP is ready to navigate it.