Picton and EPRA best practice recommendations

The European Public Real Estate Association’s (EPRA) mission is to promote, develop and represent the European public real estate sector.

EPRA provides effective and continuous leadership in matters of common interest by publishing research and encouraging discussion of issues impacting the property industry, both within the membership and with a wide range of stakeholders, including the EU institutions, governmental and regulator bodies and business partners.

We support EPRA’s drive to bring parity to the comparability and quality of information provided to investors and other key stakeholders of this Report. With this in mind, for our 2017 Report, we have aimed to allow our audience to navigate to key areas of narrative in the Report and have highlighted these areas within our Report using the EPRA logo to aid identification.

We have also included all of our key EPRA performance metrics in one section within the Report as well as highlighting other specific metrics throughout the Report.

EPRA performance measures (epm) 

EPRA Best Practices Recommendations recognise the six key performance measures detailed below, something we fully support. We aim to be as transparent with our EPRA Best Practices Recommendation reporting as possible, and we felt the inclusion of the purpose against each measure would be helpful for our audiences and help give context. We have also cross referenced these specific measures to more detailed information found in our 2017 Annual Report.

EPRA performance measures

201720162015

EPRA earnings

£20.6m£19.9m£15.3m

EPRA earnings per share

3.8p3.7p3.4p

EPRA NAV per share

82p77p69p

EPRA NNNAV per share

77p73p65p

EPRA cost ratio (including direct vacancy costs)

26.1%22.8%24.9%

EPRA cost ratio (excluding direct vacancy costs)

21.1%18.9%19.1%

EPRA net initial yield

5.9%5.6%5.9%

EPRA ‘topped-up’ net initial yield

6.3%6.2%6.5%

EPRA vacancy rate

5.8%3.9%4.8%

EPRA earnings:
A key measure of a company’s underlying operating results and an indication of the extent to which current dividend payments are supported by earnings.

EPRA NAV:
Makes adjustments to IFRS NAV to provide stakeholders with the most relevant information on the fair value of the assets and liabilities within a true real estate investment company with long-term investment strategy.

EPRA NNNAV:
Makes adjustments to EPRA NAV to provide stakeholders with the most relevant information on the current fair value of all the assets and liabilities within a real estate company.

EPRA net initial yield and ‘topped up’ net initial yield:
A comparable measure for portfolio valuations. This measure should make it easier for investors to judge for themselves, how the valuation of a portfolio compares with others. The EPRA NIY is based on the passing rents at the balance sheet date, the EPRA ‘topped up’ NIY also includes rents where there are unexpired lease incentives at the balance sheet date.

EPRA Vacancy rate:
A “pure” (%) measure of investment property space that is vacant, based on ERV.

EPRA Cost ratios:
A ratio to enable meaningful measurement of the changes in a company’s operating costs as a percentage of rental income.