Picton Prop Inc Ltd Trading Update and Net Asset Value as at 30 June 2022
July 27 2022 - 1:00AM
UK Regulatory
TIDMPCTN
27 July 2022
PICTON PROPERTY INCOME LIMITED
("Picton", the "Company" or the "Group")
LEI: 213800RYE59K9CKR4497
Trading Update and Net Asset Value as at 30 June 2022
Picton announces a 2.0% increase in Net Asset Value for the quarter ended 30
June 2022.
Financial Highlights
* Net assets of £670.0 million (31 March 2022: £657.1 million).
* NAV/EPRA NTA per share increased by 2.0% to 122.9 pence (31 March 2022:
120.4 pence).
* Total return for the quarter of 2.8% (31 March 2022: 7.6%).
* LTV of 22.3% (31 March 2022: 21.2%).
Operational Highlights
* Like-for-like portfolio valuation uplift of 1.9% over the quarter.
* Completed three small lettings, in the office and retail sectors, and
renewed / regeared three leases, all in the industrial sector, with a
combined annual rent of £0.3 million, 6% ahead of the March 2022 ERV.
* Secured an average increase of 12% against the previous passing rent from
four rent reviews in the industrial and retail sectors, with a combined
annual rent of £0.3 million, which was 14% ahead of the March 2022 ERV.
* Purchased a multi-let mixed use London asset for £13.7 million.
* Occupancy of 91%, principally reflecting the existing vacancy in the above
acquisition (31 March 2022: 93%).
Dividend
* Interim dividend of 0.875 pence per share declared in respect of the period
1 April 2022 to 30 June 2022 and to be paid on 31 August 2022 (1 January
2022 to 31 March 2022: 0.875 pence per share).
* Annualised dividend equivalent to 3.5 pence per share, delivering a
dividend yield of 3.8%, based on 25 July 2022 share price.
* Dividend cover for the quarter of 103% (31 March 2022: 103%).
Lena Wilson CBE, Chair of Picton, commented:
"It is encouraging to have delivered yet another quarter of positive NAV
growth. Looking ahead, our conservative balance sheet and predominately fixed
long-term debt facilities put us in a favourable position to take advantage of
opportunities arising from current market conditions."
Michael Morris, Chief Executive of Picton, commented:
"We have seen valuation gains across each sector of the portfolio. Whilst we
recognise that macro events are leading to a slowing of capital growth in many
markets, both asset management initiatives and rental growth in a number of
subsectors have contributed to the overall positive result. We continue to
watch the market carefully for opportunities to grow the portfolio."
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 £879
million diversified UK commercial property portfolio, invested across 48 assets
and with around 400 occupiers (as at 30 June 2022).
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
NET ASSET VALUE
The unaudited Net Asset Value ('NAV') of Picton as at 30 June 2022 was £670.0
million, reflecting 122.9 pence per share, an increase of 2.0% over the quarter
or 2.8% on a total return basis.
The NAV attributable to the ordinary shares is calculated under IFRS and
incorporates the independent market valuation as at 30 June 2022, including
income for the quarter, but does not include a provision for the dividend this
quarter, which will be paid in August 2022.
30 Jun 2022 31 Mar 2022 31 Dec 2021 30 Sept 2021
£million £million £million £million
Investment properties* 863.2 834.2 774.2 730.2
Other assets 25.5 24.2 25.3 26.2
Cash 22.4 38.5 17.7 16.7
Other liabilities (22.6) (21.0) (19.3) (20.0)
Borrowings (218.5) (218.8) (182.2) (179.5)
Net Assets 670.0 657.1 615.7 573.6
Net Asset Value per share 122.9p 120.4p 112.8p 105.0p
*The investment property valuation is stated net of lease incentives and
includes the value of owner-occupied property.
The movement in Net Asset Value can be summarised as follows:
Total Movement Per share
£million % Pence
NAV at 31 March 2022 657.1 120.4
Movement in property values 13.3 2.0 2.5
Net income after tax for 4.9 0.7 0.9
the period
Dividends paid (4.8) (0.7) (0.9)
Other (0.5) - -
NAV at 30 June 2022 670.0 2.0 122.9
DIVID DECLARATION
A separate announcement has been released today declaring a dividend of 0.875
pence per share in respect of the period 1 April 2022 to 30 June 2022 (1
January 2022 to 31 March 2022: 0.875 pence).
Dividend cover over the quarter was 103% (31 March 2022: 103%).
DEBT
Total borrowings at 30 June 2022 were £218.5 million, with £4.9 million drawn
under the revolving credit facility and the balance drawn under long-term fixed
rate facilities. The net loan to value ratio, calculated as total debt less
cash, as a proportion of gross property value, is 22.3% (31 March 2022:
21.2%).
The weighted average debt maturity profile of the Group is approximately 9.3
years and the weighted average interest rate is 3.7%.
Picton has £45.1 million available through its undrawn revolving credit
facility.
PORTFOLIO UPDATE
Like-for-like, the portfolio valuation increased over the quarter by 1.9% or £
16.2 million, with £1.1 million of capital expenditure incurred across the
portfolio during the period. The valuation movements over the quarter are shown
below:
Sector Portfolio Like-for-like
Allocation Valuation Change
Industrial 59.3% 2.3%
South East 43.1%
Rest of UK 16.2%
Offices 30.3% 0.7%
London City and West End 7.0%
Inner and Outer London 5.2%
South East 8.7%
Rest of UK 9.4%
Retail and Leisure 10.4% 2.8%
Retail Warehouse 6.8%
High Street - Rest of UK 2.1%
Leisure 1.5%
Total 100% 1.9%
Against a backdrop of rising inflation and financing costs, there was some
upward pressure on yields in certain subsectors, albeit this was offset through
rental growth and portfolio activity.
The retail and leisure element of the portfolio saw the strongest growth,
principally reflecting lower yields for retail warehouse assets. On a
like-for-like basis the valuation of our office portfolio increased by 0.7%
over the quarter, principally reflecting investment into the assets.
Occupational demand in the industrial sector remains strong with associated
rental growth and this led to positive performance and a capital value uplift,
despite some small outward yield adjustments for lower yielding assets.
Charlotte Terrace, Hammersmith Road, London, W14 was acquired for £13.7
million. This mixed use London block comprises four adjoining buildings, which
total 28,500 sq ft of office space and 4,400 sq ft of retail space, arranged
over five floors. The property was redeveloped behind the façade in 1990 and is
Grade II listed, meaning there are no business rates payable on void units. The
purchase price reflects a net initial yield of 3.3%, rising to over 8% once
fully let and reflecting a low capital value of £417 per sq ft, which is below
its estimated replacement cost. In order to assist the leasing process, works
are underway to improve the occupier amenities.
As at 30 June 2022, the portfolio had a net initial yield of 4.1% (allowing for
void holding costs) or 4.3% (based on contracted net income) and a net
reversionary yield of 5.4%. The weighted average unexpired lease term, based on
headline rent, was 4.9 years.
Occupancy reduced to 91%, principally reflecting the existing vacancy in the
above recent acquisition.
The top ten assets, which represent 55% of the portfolio by capital value, are
detailed below.
Asset Sector Location
Parkbury Industrial Estate, Radlett Industrial South East
River Way Industrial Estate, Harlow Industrial South East
Datapoint, Cody Road, E16 Industrial London
Lyon Business Park, Barking Industrial Outer
London
Stanford Building, Long Acre, WC2 Office London
Shipton Way, Rushden, Northants Industrial East
Midlands
Angel Gate, City Road, EC1 Office London
Tower Wharf, Cheese Lane, Bristol Office South West
Sundon Business Park, Luton Industrial South East
50 Farringdon Road, EC1 Office London
MARKET BACKGROUND
According to the MSCI Monthly UK Property Index, the All Property total return
was 3.6% for the quarter to June 2022, compared to 5.5% for the previous
quarter.
Capital growth was 2.5% (March 2022: 4.3%) and rental growth was 1.1% for the
quarter (March 2022: 1.3%). A more detailed breakdown of the MSCI Monthly
Digest is shown below:
MSCI capital growth
Number of MSCI segments
Quarterly growth Positive growth Negative growth
Industrial 4.1% 7 0
Office 0.6% 5 5
Retail 2.2% 11 8
All Property 2.5% 23 13
MSCI rental growth
Number of MSCI segments
Quarterly growth Positive growth Negative growth
Industrial 2.7% 7 0
Office 0.1% 5 5
Retail 0.2% 10 9
All Property 1.1% 22 14
ENDS
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