Market Capitalisation £560.75M

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.

PICTON PROPERTY INCOME LTD - Net Asset Value and Interim Dividend

PR Newswire

20 July 2016


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

Net Asset Value as at 30 June 2016 and Interim Dividend

Picton (LSE: PCTN), the income focused property investment company, announces its Net Asset Value for the quarter ended 30 June 2016 and Interim Dividend. 

Highlights during the quarter included:


  • Net Assets of 418.0 million (31 March 2016: £417.1 million).
  • NAV/EPRA NAV per share rose 0.2% to 77.4 pence (31 March 2016: 77.2 pence).
  • Total return for the quarter of 1.3% (31 March 2016: 3.1%).
  • Average debt maturity of 10.4 years, with a weighted average interest rate of 4.4% per annum.
  • New revolving credit facility established to provide increased operational and financial flexibility.
  • £37.2 million of undrawn facilities currently available.
  • Net gearing of 34.4% (31 March 2016: 34.6%).


  • Dividend of 0.825 pence per share declared and to be paid on 31 August 2016 (31 March 2016: 0.825 pence per share).
  • Post-tax dividend cover for the quarter of 111% (31 March 2016: 106%).
  • Dividend yield of 4.9%, based on a share price of 67.75 pence on 18 July 2016.

Portfolio Activity

  • Like-for-like increase in property portfolio valuation of 0.5% (31 March 2016: 1.5%), or 0.1% reflecting capital expenditure over the period.
  • Occupancy stable at 96% (31 March 2016: 96%).
  • 12 lettings completed, on average 7% ahead of March ERV, adding £1 million per annum to the rent roll.
  • 12 lease renewals/regears, on average 10% ahead of March ERV securing £0.4 million per annum.

Post Quarter End Activity:

  • Exchanged on the sale of Boundary House EC3 for £27.8 million, with completion due on 30 August 2016.
  • Pipeline of 11 lettings for a combined rent of £1.1 million and six lease renewal/regears for £0.5 million currently under offer.
  • Of these letting transactions 40% were agreed after the EU referendum result.

Commenting, Nick Thompson, Chairman of Picton, said:

“Despite the uncertainty created by the EU Referendum, the NAV has remained stable over the period which is primarily a reflection of active management activity, combined with strong dividend cover. Our closed ended structure, access to capital and operational flexibility, means we are well positioned to manage risks and take advantage of attractive opportunities should they arise.”

Michael Morris, Chief Executive of Picton Capital, added:

“In a period where the income component of total return becomes more dominant, we have been encouraged by the continued high occupancy within the portfolio and strength of our leasing pipeline.  During the period we have signed a new revolving credit facility which, together with the proceeds from our recent London office disposal, will enable us to reduce both the cost and overall level of debt, and improve our income position when our ZDPs mature in October.”

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
Katie Le Page, 01481 745 001,

Note to Editors

Picton Property Income Limited 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 £418.0 million at 30 June 2016, 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.


For April, May and the majority of June, the property market was operating against a backdrop of uncertainty prior to the EU Referendum. 

The full impact of the result on the UK commercial property market, both in terms of the occupier and investment markets, remains unclear. The MSCI IPD numbers, with a valuation date five working days after the Referendum, cannot fully incorporate the full effect of the decision.  This will develop as transactions take place and the subsequent MSCI IPD Monthly Indices are released.

According to the MSCI IPD Monthly Index, total returns were 1.3% in the quarter to June 2016, compared to 1.1% in the quarter to March 2016 (which had previously been adversely affected by the increase in stamp duty announced in March 2016).  

Capital growth was -0.1% over the quarter, compared with -0.2% in the quarter to March 2016.  On a monthly basis capital growth for June turned negative at -0.3%, weaker than both April (0.1%) and May (0.1%).

Across the principal sectors, industrial values rose by 0.4% (March 2016: 0.1%), office values recorded no movement (March 2016: 0.2%) and retail fell by -0.4% (March 2016: -0.8%).

The well publicised liquidity issues within some of the open ended commercial property funds have also impacted sentiment and, whilst this is only a small proportion of the overall commercial property market, this is likely to have a negative impact in the short term. The relative illiquidity of property, versus the need for liquidity offered by these structures, may lead to some sales having adverse valuation implications across the wider market.

In terms of the occupational markets, until the exact terms of the UK’s departure from the EU are known, we would expect weaker rental growth to materialise.  It is likely that some occupiers will postpone decisions in the short term, although this may vary across sector, geography and by type of occupier.  


The unaudited Net Asset Value (‘NAV’) of Picton, as at 30 June 2016, was £418.0 million, reflecting 77.4 pence per share, an increase of 0.2% over the quarter.

The NAV attributable to the ordinary shares is calculated under International Financial Reporting Standards and incorporates the external market valuation as at 30 June 2016, including income for the quarter, but does not include a provision for the dividend this quarter, which will be paid in August 2016.

By way of background, the definition of Market Value of each property is the “the estimated amount for which a property should exchange on the date of valuation between a willing buyer and a willing seller in an arm’s length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion.”

As the valuation date was in close proximity to the Referendum result, in line with the approach adopted by other valuers, CBRE Limited, the Group’s valuer has included the following comment in their valuation report:-

“Following the Referendum held on 23 June 2016 concerning the UK’s membership of the EU, a decision was taken to exit. We are now in a period of uncertainty in relation to many factors that impact the property investment and letting markets. Since the Referendum date it has not been possible to gauge the effect of this decision by reference to transactions in the market place. The probability of our opinion of value exactly coinciding with the price achieved, were there to be a sale, has reduced.  We would, therefore, recommend that the valuation is kept under regular review and that specific market advice is obtained should you wish to effect a disposal.”

At this early stage it is not possible to assess the full impact this may have on transactions in the market generally. This will be kept under close review by the Company and the next independent valuation of the property portfolio is scheduled for September 2016.  The unaudited NAV per share, as at 30 September 2016, will be announced in October 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 April 2016 to 30 June 2016 (1 January 2016 to 31 March 2016: 0.825 pence).  The dividend will be paid on 31 August 2016 to shareholders on the register on 12 August 2016. The ex-dividend date is 11 August 2016.

Post-tax dividend cover over the quarter was 111% (31 March 2016: 106%).


The Group has total borrowings of £249.8 million with a weighted average interest rate of 4.4% (94% fixed rate) and a weighted average debt maturity profile of approximately 10.4 years.

As at 30 June 2016, net gearing, calculated as total debt including ZDPs, less cash, as a proportion of gross property value, was 34.4% (31 March 2016: 34.6%). On 30 August, when the disposal of Boundary House completes, net gearing will reduce on a proforma basis to 31.5%.

During the quarter a new five-year £27 million revolving credit facility was established with Santander Corporate and Commercial Banking. If drawn, interest will be charged at 175 basis points over 3 month LIBOR, which is equivalent to 2.3% per annum currently. There is a nominal non-utilisation fee of 70 basis points, equivalent to £0.18 million per annum.

The Group has 22 million zero dividend preference shares (‘ZDPs’), which it intends to repay at maturity in October 2016, totalling £29.1 million and the Group currently has access to £37.2 million of undrawn facilities. 


The portfolio valuation increased 0.5% or £3.1 million, primarily as a result of active management and leasing activity completed during the period. The Group also incurred £2.2 million of capital expenditure, which has enhanced the portfolio value and is detailed below. This led to a net valuation uplift of 0.1% after capital expenditure.

Occupancy across the portfolio remained stable at 96%.

As at 30 June, the portfolio had a net initial yield of 5.6% (allowing for void holding costs) or 5.7% (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.

Encouragingly, transactions agreed within the portfolio following the EU referendum outcome remain supportive of 30 June valuation assumptions.

Key highlights in the quarter included:


At Angel Gate, EC1 we have let a recently refurbished unit on a ten year lease at a rent of £0.15 million per annum, in line with ERV. In other transactions, we renewed a lease for a further five years at £40,000 per annum in line with ERV and surrendered two leases where the occupiers were paying rents equating to close to £24 per sq ft.  The units will be refurbished and are expected to be re-let at rents nearly double this level.

At Trident House in St. Albans, we completed the letting of one of the two suites available on the 1st floor, securing a rent of £94,000 per annum, 4% ahead of ERV at £28.50 per sq ft. Post quarter end, we let the other available suite at a rent of £0.12 million per annum, 26% ahead of ERV and equating to £34.50 per sq ft, which we believe sets a new rental level in this market.

At 180 West George Street in Glasgow we extended a lease for a further five years, securing £0.16 million per annum, 12% ahead of ERV and setting a new rental level for the property at £26 per sq ft. We have two floors coming back at the end of the year, which we anticipated on purchase. The common areas within the building and these floors will be comprehensively refurbished to offer some of the best office space in the central Glasgow market in 2017.

Boundary House, Jewry Street, EC3, is located in the eastern part of the City and comprises a 45,000 sq ft multi-let office building, constructed in the mid 1950’s.  We completed two lettings (one following an active management surrender) achieving full occupancy. On 11 July we exchanged contracts to sell the asset for £27.8 million with completion due on 30 August 2016. We were paid a deposit of £2.8 million and will benefit from the rental income until the completion date. The property was acquired in 2006 for £16.1 million.


At one of our larger multi-let estates, River Way in Harlow, three units are coming back in the summer totalling 85,000 sq ft. We have pre-let two of these units to occupiers for a combined rent of £0.4 million per annum, with the leases starting the day after the current lease expires. The new occupiers are taking the units in their existing condition and we have secured dilapidations of £0.1 million from the outgoing occupiers. 

We are currently on-site refurbishing a 55,000 sq ft unit, our largest void, and the works are due to complete this summer. In addition, a further 29,000 sq ft unit comes back in August. Both of these units are currently under offer.

In Washington, at our 250,000 sq ft warehouse, we secured a rental uplift of £0.11 million at the June 2016 rent review, increasing the passing rent to £1.12 million per annum.

Retail and Leisure

At Gloucester Retail Park, we have now obtained planning permission and are preparing the unit for Pure Gym to take occupation, as detailed last quarter. In a separate transaction, we have now received planning permission for a drive through unit in the car park which, once developed, will be let to a Starbuck’s franchisee on a ten year lease at £60,000 per annum.



The unaudited Net Asset Value is as follows:

                                                30 June 2016
31 Mar 2016
31 Dec 2015
Investment properties * 648.5 646.0 619.7
Other assets 18.5 17.3 18.4
Cash 23.4 22.8 24.6
Other liabilities      (22.7) (19.5) (20.4)
Borrowings: Loan facilities




Net Assets 418.0 417.1 408.8
Net Asset Value per share 77.4p 77.2p 75.7p

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

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

Total Movement Per share
£million % Pence
NAV at 31 March 2016 417.1 77.2
Movement in property values 0.4 0.1 0.1
Net income after tax for the period 4.9 1.2 0.9
Dividends paid (4.4) (1.1) (0.8)
NAV at 30 June 2016 418.0 0.2 77.4


With the disposal of Boundary House, London EC3, due to complete on 30 August, we have also included proforma numbers, reflecting this disposal, by using 30 June values.  In terms of our London office exposure, this comprises 13% in Central London (Angel, Farringdon and Chancery Lane) and 2.5% in Greater London (Croydon).

The Group’s portfolio is structured as follows:-

Sector Weighting
30 June 2016
Proforma Weighting
30 August 2016
Like for Like
Valuation Change
Office – Rest of UK 19.6% 20.5% 0.4%
Office – Central/Greater London 19.0% 15.5% 1.4%
Industrial 36.1% 37.6% 0.2%
Retail/Leisure 25.3% 26.4% 0.3%
Total 100.0% 100.0% 0.5%


Geography Weighting
30 June 2016
Proforma Weighting
30 August 2016
South East 32.1% 33.5%
Central & Greater London 27.7% 24.5%
North 15.6% 16.2%
Midlands 13.4% 14.0%
Wales 3.8% 4.0%
South West 3.6% 3.8%
Scotland 3.4% 3.6%
Northern Ireland 0.4% 0.4%
Total 100.0% 100.0%


The top ten assets, which represent 46% 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
Angel Gate Office Village, City Road, EC1 Office London
Stanford House, Long Acre, WC2 Retail London
Boundary House, Jewry Street, EC3 Office London
50 Farringdon Road, EC1 Office London
Shipton Way, Rushden, Northamptonshire Industrial East Midlands
Pembroke Court, Chatham Offices South East
Phase II Parc Tawe, Swansea Retail Warehouse Wales
Queens Road, Sheffield Retail Warehouse North


Occupier focused, Opportunity led