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ASLI.L’s Q4 2025 NAV update was released today and it was a doozy. Adjusting for distributions made during the quarter, NAV including liquidation costs declined by ~€9m / €0.022 per share or 7%. The share price plummeted in response, down about 10% today.
The NAV decline wasn’t due to a major revaluation of the property portfolio - it declined €0.8m or 0.5% on a like-for-like basis. The valuation movement attributable to the French properties which were sold post period end.
Instead, the major culprits looks to be:
Net deferred and capital gains taxes, which were negative €7.7m vs. the 2025 Q3 NAV. It looks like the deferred tax estimate and management’s estimates for transaction costs and potential latent SPV capital gains tax weren’t adequate to capture this. If I had to guess, they had to remeasure due to the Avignon transaction, which completed post period end as French taxes are notoriously complicated.
Expenses in excess of income, which ran at negative €2.7m in the quarter.
A good reminder that even if you think there are going to be more frictional costs than you think in a real estate liquidation, there will in fact, still be more that you miss.
In this case, I think it would have been hard to capture the tax element but I should have thought through the fact that as the portfolio has shrunk, income will no longer cover operating expenses and the net expenses in excess of income will need to be captured in a liquidation estimate.
So where does that leave things? Clearly my previous update and decision to purchase some additional shares was overly optimistic. Leaving my property valuation estimates unchanged, I see net liquidation value of €131m / €0.32 per share. This is a ~9% decline versus my previous estimate and is effectively the same as the trading price at that point in time. The discount to liquidation value I saw then evaporated.
My updated net liquidation value estimat eincorporates the revised deferred tax, potential latent SPV capital gains tax, and other assets / liabilities. I have also added a €5m reserve for costs in excess of income (~ 2 quarters).
The move in the share price today is roughly 1 to 1 with the decline my liquidation estimate. Based on the current share price, I see a ~11% discount to net liquidation value.
Updates on the sale process are mixed. Positively, 1 of the 2 assets is under offer (but not yet under contract) with completion expected in early Q2. More negatively, management highlighted that the sales process for the other - while it had been progressing - has slowed in recent weeks due to Iran / macro concerns.
While there’s less upside here than I had thought, I continue to believe that this process will come to a close by the summer barring the macro situation getting significantly worse and buyers of European industrial assets completely stepping back.
