Market Capitalisation £536.65M

Picton Property Income Limited entered the UK REIT regime on 1 October 2018 and became a commercial company. As such Picton is outside the scope of AIFMD and is not required to produce a Key Information Document (KID) under PRIIPs.


PR Newswire

26 January 2016

(“Picton” or the “Company” or the “Group”)

NetAssetValue as at 31December 2015 andInterimDividend

Picton (LSE: PCTN), the income focused property investment company, announces its Net Asset Value for the quarter ended 31 December 2015 and Interim Dividend.   Highlights during the quarter included:


  • Net Assets increased to £408.8 million (30 September 2015: £393.1 million).
  • NAV/EPRA NAV per share rose 4.0% to 75.7 pence (30 September 2015: 72.8 pence).
  • Total return for the quarter of 5.1% (30 September 2015: 3.9%), and 19.9% for the calendar year.
  • Net gearing of 33.3% (30 September 2015: 34.6%).
  • Average debt maturity of 11.6 years, with a weighted average interest rate fixed at 4.6% per annum.


  • Dividend of 0.825 pence per share declared and to be paid on 29 February 2016 (30 September 2015: 0.825 pence per share).
  • Post-tax dividend cover for the quarter of 117% (30 September 2015: 122%).
  • Dividend yield of 4.8%, based on a share price of 69.25 pence on 25 January 2016.

Portfolio Activity

  • Like-for-like increase in property portfolio valuation of 2.6% (30 September 2015: 2.2%), with the strongest valuation gains in the office portfolio.
  • Occupancy maintained at 95% (30 September 2015: 95%) for the 5th consecutive quarter.
  • Disposed of a low yielding, non-core retail asset in Guildford for £3.25 million, at a 9% premium to September 2015 valuation.
  • Completed nine lettings, adding £0.5 million per annum to the rent roll (after incentives), three lease renewals securing £0.17 million per annum (after incentives) and four rent reviews securing an income uplift of over £0.03 million, in line with September 2015 ERV s.

Post Quarter End Activity

  • Subsequent to the quarter end and following the valuation date, a number of significant asset management transactions have completed, which are expected to further enhance the income and capital position.
  • In 2016 we have completed three regears totalling £1.4 million pa, extending this income on average by over eight years (2% ahead of the December 2015 ERV), one rent review securing a £0.05 million pa uplift  (5% ahead of December 2015 ERV) and one letting securing £0.15 million pa (50% ahead of the December 2015 ERV)).
  • In addition, terms have been agreed in respect of 14 new lettings, subject to contract, at a combined rental in excess of £0.9 million pa (11% ahead of the December 2015 ERV).

Commenting, Nick Thompson, Chairman of Picton, said:

“OurThe strong performance thisover the quarter is attributable toa reflection of our high relative exposure to the outperformingoffice and industrial sectors which have outperformed, as well as our covered dividend, the positive impact of our capital structureuse of debt and the full benefit of the higher income as a result of recent acquisitions.”

Michael Morris, Chief Executive of Picton Capital, added:

“We are encouraged, not only by the activity within the portfolio during the quarter, and also but the strong start to 2016., in terms of underlying portfolio activity.  In particular, a number of lettings and repositioning initiatives continue to drive rents, enhancing our capital base and contributing to performance ahead of the wider market.”

For further information:


Jeremy Carey/James Verstringhe, 020 7920 3150,

Picton Capital Limited
Michael Morris, 020 7011 9980,

The Company Secretary
Northern Trust International Fund Administration Services (Guernsey) Limited

Trafalgar Court
Les Banques
St Peter Port

David Sauvarin, 01481 745 001,

Note to Editors

Picton Property Income Limited (´Picton´) is an income focused, property investment company listed on the London Stock Exchange. Picton can invest both directly and indirectly in commercial property across the United Kingdom.

With Net Assets of £408.8 million at 31 December 2015, the Company´s objective is to provide shareholders with an attractive level of income, together with the potential for capital growth by investing in the principal commercial property sectors.


The unaudited Net Asset Value (‘NAV’) of Picton, as at 31 December 2015, was £408.8 million, reflecting 75.7 pence per share, an increase of 4.0% over the quarter.

The NAV attributable to the ordinary shares is calculated under International Financial Reporting Standards and incorporates the external portfolio valuation as at 31 December 2015, including income for the quarter, but does not include a provision for the dividend this quarter, which will be paid in February 2016.

The next independent valuation of the property portfolio is scheduled for March 2016 and the unaudited NAV per share, as at 31 March 2016, will be announced in April 2016.

A detailed breakdown of the NAV is included in the Appendix.


An interim dividend of 0.825 pence per share is declared in respect of the period 1 October 2015 to 31 December 2015 (1 July 2015 to 30 September 2015: 0.825 pence).

The dividend will be paid on 29 February 2016 to shareholders on the register on 12 February 2016. The ex-dividend date is 11 February 2016.

Post-tax dividend cover for the quarter was 117% (30 September 2015: 122%).


The Group has total borrowings of £233.5 million with a fixed weighted average interest rate of 4.6% and a weighted average debt maturity profile of approximately 11.6 years.

As at 31 December 2015, net gearing, calculated as total debt including ZDPs, less cash, as a proportion of gross property value, was 33.3% (30 September 2015: 34.6%).

The Company, through subsidiary Picton ZDP Limited (PCTZ), has 22 milliona Zero Dividend Preference shares which are scheduled to mature maturity in October 2016. It intends to repay these ZDP shares in full at the maturity date and is currently exploring the most appropriate method of repayment. Thethe Company currently has a £26 million undrawn Rolling Credit Facility, over £70 million of uncharged assets, and existing cash resources to facilitate this..

The Company has received enquiriesfeedback  from a number of from PCTZ of ZDP shareholders concerning a possible rollover of ZDPs to Picton ordinary shares, recognising the higher dividend yield compared tovs the ZDP GRY and the potential benefit of deferringment of any Capital Gains TaxCGT liabilitiesy.  

The Company therefore nowIt intends to consult more widely with ZDP holders to establish whether a rollover would be viablein the coming quarter to establish if there is sufficient demand to facilitate a roll over from PCTZ to PCTN on a non dilutive basis for Ordinary shareholders.  It will provide clarity on the strategy at the time of the Annual Results, if not sooner.


According to the MSCI IPD Monthly Index, total returns were 3.1% in the quarter to December 2015, compared to 3.4% in the quarter to September 2015.

Capital growth remained positive and was 1.7% over the quarter, compared with 2.1% in September 2015. Across the principal IPD sectors, office values rose by 2.5% (September 2015: 3.1%), industrial by 2.3% (September 2015: 3.1%) and retail by 0.8% (September 2015: 0.8%). Over the quarter, the majority of the IPD segments recorded positive capital growth, with falls only recorded within the rRetail sector. Out of a total of 37 segments, 34 recorded positive capital growth, compared to 36 last quarter.

Over the quarter to December, rents grew by 1.1%, compared with 1.2% in September 2015. Across the principal IPD sectors, office rental values rose by 1.9% (September 2015: 2.1%), industrial by 1.6% (September 2015: 1.4%) and retail by 0.3% (September 2015: 0.3%).  Over the quarter, the majority of the IPD segments recorded positive rental growth, with falls only recorded in thesome retail sectorgments. Out of a total of 37 segments, 31 recorded positive rental growth compared to 29 last quarter.

The occupancy rate in the December IPD Monthly Index was higher than the previous quarter at 91.2% (September 2015: 90.6%).


The portfolio valuation increased by 2.6% during the period and occupancy was maintained at 95%.

The office assets in the portfolio recorded the strongest valuation gains and this was in part a reflection of asset management activity and rising rental levels across the portfolio.

The strongest gains were seen in the London portfolio where rising rental values (of currently at an average of £43 per sq ft across the London portfolio) £43 per sq ft overall) and the low overall current rental levels (which currently reflect under £31 per sq ft) will, in our view, offer further scope for income growth.

As at 31st December, the portfolio had a net initial yield of 5.7% (allowing for void holding costs) or 5.8% (based on contracted net income) and a net reversionary yield of 6.8%. The weighted average unexpired lease term based on headline rent was 5.7 years.

Key highlights in the quarter included:


At Parkbury, Radlett we secured a 3% uplift in rent at the second largest unit (40,000 sq ft)  at a February 2014 rent review increasing the rent to £0.38 million per annum. The uplift is 8% ahead of ERV.   We have agreed aon early surrender of a 22,000 sq ft unit which is coming back in February 2016, on the back of the strong demand we are presently seeing and currently we have one vacant unit, which is under offer.

In Harlow, we secured a 5% uplift in rent at a July 2013 rent review increasing the rent to £0.22 million per annum. The uplift is 1% ahead of ERV and a positive result especially with regard to other outstanding reviews. As anticipated, a 55,000 sq ft unit came back at the end of December and will be refurbished, prior to relettingwe expect strong interest in the unit post the refurbishment.

In Epsom, at Nonsuch Industrial Estate, we have let one of the larger units for a ten-year term, without break, at a rent of £0.04 million per annum with no incentive. The new rent equates to £16 per sq ft, which is 6% ahead of ERV and sets a new tone for the estate. We have one remaining unit to let.

During the quarter wethe company obtained planning permission to enable a former vacant industrial unit to be occupied by a national gym operator, which will be at a significantly higher rental income compared to the former industrial use.


Following further repositioning and upgrading of our units at our Angel Gate scheme in Islington, we have let two units securing £0.31 million per annum, which was 32% ahead of Septmeber ERV.  We continue to see strong demand for this scheme and have one vacant building to let where the refurbishment has just completed.

At 30 and 50 Pembroke Court in Chatham, which were acquired in June 2015, we have completed a lease regear at one of the buildings to Canterbury Christ Church University extending the income of £0.6 million per annum, by a further ten years, in return for a short rent free period.

In Fleet, the leasing transaction of 33,000 sq ft completed to a serviced office occupier, following refurbishment works undertaken by Picton, at a stepped rent rising to £0.4 million pa (reflecting £12.10 per sq ft), plus a top up reflecting occupancy within the building.

Retail / Leisure

At Gloucester Retail Park (acquired in March 2015), a planning application has been submitted to construct a new circa 2,000 sq ft retail pod, within the car park area, to further enhance the estate.  Terms have in principle been agreed  to lease the unit with an established multinational occupier and an Agreement for Lease is currently being negotiated.  Completion of the lease will occur once planning has been secured and construction completed. A further update will be provided in due course.  

Trading Activity

A non core high street retail unit in Guildford was sold for £3.25 million, reflecting a net initial yield of 4.3%. The unit is leased to L’Oreal (UK) Ltd, trading as Kiehl’s, for a further 4.8 years at an annual passing rent of £0.15 million. This price reflects a 9.2% premium to the September 2015 valuation and a 32% uplift from the 2010 acquisition price.

Terms have been agreed in principle and subject to contract, to redeploy these proceeds into a larger and relative income accretive opportunity, which meets the Company’s Investment criteria.  Legal and technical due diligence is being undertaken and iIt is expected that a further announcement will be made in the coming weeks, should the transaction proceed to confirm as such.



The unaudited Net Asset Value is as follows:

                                               31 Dec 2015
30 Sept 2015
30 June 2015
Investment properties *619.7606.3562.4
Other assets18.418.818.4
Other liabilities     (20.4)(19.0)(19.1)
Borrowings: Loan facilities




Net Assets408.8393.1382.6
Net Asset Value per share75.7p72.8p70.8p

* The investment property valuation is stated net of lease incentives.

The movements in Net Asset Value can be summarised as follows;

TotalMovementPer share
NAV at 30 September 2015393.172.8
Movement in property values14.93.82.7
Net income after tax for the period5.21.31.0
Dividends paid(4.4)(1.1)(0.8)
NAV at 31 December 2015408.84.075.7


The Group’s current portfolio is structured as follows:-

31 Dec 2015
Like for Like
Valuation Change
Office – Central/Greater London19.4%6.4%
Office – Rest of UK17.1%4.4%
Retail and Leisure         26.6%0.0%


31 Dec 2015
South East32.0%
Central & Greater London28.4%
South West3.8%
Northern Ireland0.4%


The top ten assets, which represent 47% of the portfolio by capital value, are detailed below.

Parkbury Industrial Estate, RadlettIndustrialSouth East
River Way Industrial Estate, HarlowIndustrialSouth East
Angel Gate Office Village, City Road, EC1OfficeLondon
Stanford House, Long Acre, WC2RetailLondon
Boundary House, Jewry Street, EC3OfficeLondon
50 Farringdon Road, EC1OfficeLondon
Shipton Way, Rushden, NorthamptonshireIndustrialEast Midlands
Pembroke Court, ChathamOfficeSouth East
Phase II Parc Tawe, SwanseaRetail WarehouseWales
Queens Road, SheffieldRetail WarehouseYorkshire & Humberside


Occupier focused, Opportunity led