Picton Prop Inc Ltd Trading Update
April 20 2023 - 1:00AM
UK Regulatory
TIDMPCTN
20 April 2023
Picton Property Income Limited
("Picton" or the "Company")
LEI: 213800RYE59K9CKR4497
Trading Update
Asset Management progress and stabilising valuations
Picton provides a trading update ahead of its full year results, to be released
on 25 May 2023.
Valuation
The independent valuation of the Group's property portfolio as at 31 March 2023
was £766.2 million, reflecting a 1.2% decline relative to 31 December 2022.
This compares with the recently released MSCI UK Monthly Property Index which
shows that All Property Capital Growth over the first three months of the year
was -1.2%. This represents a significant improvement relative to the prior
period and reflects stabilisation following the marked repricing after the
September 2022 mini budget. Specifically, the MSCI Index has shown positive
Capital Growth movements in March in both the industrial and retail sectors,
for the first time since June 2022.
Rent collection
Rent collection remains consistently strong at 99.8%, for the last quarter.
Occupancy
Occupancy has improved to 91% (from 90% at 31 December 2022) following several
leasing transactions offsetting space which has become available.
Portfolio activity
Activity over the three months included 19 lease renewals and extensions, 15
lettings, eight rent reviews and six surrenders. Key highlights over the
quarter include:-
Capturing rental growth in the industrial sector
At Parkbury Industrial Estate, Radlett, an existing occupier was upsized, with
two leases extended from 2025 to 2030 and the rent increased by 46% from £0.4
million to £0.6 million per annum, effective January 2025. In addition, Picton
has pre-leased a unit which will become vacant in 2024, increasing the passing
rent by 60% to £0.2 million per annum. Rents were in line with the December
ERV.
At Riverway Industrial Estate, Harlow, an occupier has agreed to take an
additional unit which became vacant at the end of 2022, after completion of
upgrading works by Picton, including the installation of solar panels. Their
rent increases from £0.3 million to £0.7 million per annum, which is in line
with the December ERV.
At Madleaze Trading Estate, Gloucester, a rent review has been agreed with the
largest occupier, increasing the rent by 29% to £0.3 million per annum, which
is 23% ahead of the ERV at the time of acquisition in 2021. Elsewhere on the
estate, two leases were renewed and separately occupier break options were
removed in a further two leases, securing income until 2029. These transactions
resulted in a combined uplift on the previous passing rent of 52% to £0.3
million per annum, 5% ahead of the December ERV.
Repositioning office assets
In response to market conditions, Picton is exploring higher value alternative
uses at several office assets. Further details will be provided as these
progress, but specifically at Angel Gate, London, EC1, Picton has used
permitted development rights to secure residential use at this part vacant
office scheme. Consent has been secured across seven buildings, totalling
17,760 sq ft, with the potential to create 19 residential units. In addition,
applications are being progressed for residential use on another six buildings
totalling 11,700 sq ft, creating a further 16 units.
Maintaining high retail occupancy
At Parc Tawe, Swansea, a lease has been renewed to a national retailer. The new
rent is £110,000 per annum and is 10% above the December ERV but 17% below the
previous passing rent.
At Gloucester Retail Park, a rent review was settled on one unit, increasing
the rent by 30% to £78,000 per annum, 8% ahead of the December ERV.
In Cheltenham, a lease to a local retailer has been surrendered, securing a
premium payment and a new letting to a national retailer has been agreed. This
increases the passing rent by 6% to £45,000 per annum which is 1% ahead of
December ERV.
A small retail unit has been leased to a local retailer at Charlotte Terrace,
London, W10, for £25,000 per annum in line with December ERV.
Michael Morris, Chief Executive commented.
'Our own independent valuation and the recent MSCI figures appear to indicate
that the marked repricing seen at the end of last year has substantially run
its course. In our portfolio increasing rents and rising rental values are
having a positive valuation impact and offsetting some of the outward yield
movement we have seen in recent months. Being able to improve occupancy and
adapt our portfolio to changing market conditions is also encouraging.'
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF THE UK MARKET
ABUSE REGULATION
For further information:
Tavistock
James Verstringhe, 020 7920 3150, james.verstringhe@tavistock.co.uk
Picton
Michael Morris, 020 7011 9980, michael.morris@picton.co.uk
Note to Editors
Picton, established in 2005, is a UK REIT. It owns and actively manages a £766
million diversified UK commercial property portfolio, invested across 49 assets
and with around 400 occupiers (as at 31 March 2023).
Through an occupier focused, opportunity led approach to asset management,
Picton aims to be one of the consistently best performing diversified UK
focused property companies listed on the main market of the London Stock
Exchange.
For more information please visit: www.picton.co.uk
ENDS
END
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