10
December 2024
PICTON PROPERTY INCOME
LIMITED
('Picton' or the
'Company')
LEI:
213800RYE59K9CKR4497
Portfolio
Update
Office disposal and asset
management activity improve income and occupancy
Picton is pleased to provide an
update on the progress of several initiatives highlighted in the
half year results announcement on 12 November 2024.
The recently completed transactions
comprising an office sale, strategic purchase and several leasing
and asset management transactions demonstrate progress in improving
the occupancy, net income and value within the portfolio, as
further detailed below.
Office disposal
We have exchanged contracts to sell
Charlotte Terrace, London W14, with completion due in January
2025.
The disposal is in line with our
strategy of disposing of assets that have been repositioned for
alternative use. We secured residential planning consent in respect
of a significant part of the void office element in August this
year. The asset is around 50% vacant by estimated rental value
(ERV) and comprises the second largest portfolio
void. Proforma occupancy will rise to 93% on completion (30
September 2024: 92%).
The disposal price of £13.1 million
reflects a 5% premium to the external valuation as at 30 September
2024.
Purchase adjacent to existing industrial
holding
We have completed a freehold
acquisition of a retail warehouse/trade counter unit at 90 Bristol
Road, Gloucester for £0.5 million, funded through cash resources.
The property comprises 5,100 sq ft and is located adjacent to our
Mill Place Trading Estate ownership. The acquisition will improve
the estate's overall roadside frontage to Bristol Road.
The off-market transaction was
structured as a sale and leaseback and reflects a net initial yield
of 7.7%, increasing to 8.7% in year six, based on a fixed rental
uplift. The purchase price reflects a low capital value of £98 per
sq ft, which is less than half of the estimated replacement
cost.
Leasing activity
We have re-let two retail warehouse
units, subject to completion of landlord works and within two
months of them becoming vacant, both at rents in line with the
September 2024 ERV:
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At Gloucester Retail Park, we
obtained planning consent for leisure use in the summer and have
secured a letting to Europe's largest trampoline park operator at
£0.2 million per annum.
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At Angouleme Retail Park, Bury, we
secured a letting with a leading UK bed retailer at £0.1 million
per annum.
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Expanding and securing existing occupiers
At Mill Place Trading Estate,
Gloucester, we have enabled the largest occupier to expand and have
extended their lease commitment by a further five years. This
involved leasing a vacant unit, relocating another occupier,
upgrading space and the demolition of a small unit, enabling open
storage land to be leased and rentalised. The new lettings total
£0.1 million per annum, and combined with the regear of their
current leases, secures £0.3 million per annum, subject to a
minimum uplift in 2026 at an open market rent review. The combined
new rent is 8% ahead of the September ERV.
At River Way Industrial Estate,
Harlow, in a back to back transaction, we have surrendered a lease
from an occupier in financial difficulty and re-leased it to a new
occupier. The new rent of £0.6 million per annum is over 50% ahead
of the previous passing rent and is 4% higher than the September
2024 ERV.
At 401 Grafton Gate, Milton Keynes,
we extended two office leases, representing approximately a quarter
of the space, that were due to expire in 2025. We have agreed an
immediate rental uplift of 37% to £0.4 million per annum, 17% ahead
of the September ERV. As part of the transaction, we will be
comprehensively upgrading the air conditioning within the building
which should achieve an A rated EPC. The works, due to commence in
2025, include energy efficiency measures which transition from a
gas to electric system.
Michael Morris, Chief Executive of
Picton, commented:
"This is further demonstration of
the Picton team delivering on identified initiatives that will
support earnings growth and create value for shareholders.
Pleasingly, all bar one of these transactions completed following
the recent Budget and show a depth of both investor and
occupational demand across our portfolio."
For
further information:
Picton
Kathy Thompson, Company
Secretary
020 7011 9988,
kathy.thompson@picton.co.uk
James Verstringhe,
Tavistock
020 7920 3150,
james.verstringhe@tavistock.co.uk
About Picton
Established in 2005, Picton is
listed on the main market of the London Stock Exchange and is a
constituent of a number of EPRA indices including the FTSE EPRA
Nareit Global Index.
Picton owns and actively manages a
£721 million UK commercial property portfolio, invested across 48
assets and with around 350 occupiers (as at 30 September
2024).
Through an occupier focused,
opportunity led approach, Picton aims to be one of the consistently
best performing diversified UK REITs and has delivered upper
quartile outperformance and a consistently higher income return
than the MSCI Quarterly Property Index since
launch.
With a portfolio strategically
positioned to capture income and capital growth, currently weighted
towards the industrial sector, Picton's agile business model
provides flexibility to adapt to evolving market trends over the
long-term.
Picton has a responsible approach to
business and is committed to being net zero carbon by
2040.
For more information please
visit: www.picton.co.uk
ENDS
