Market Capitalisation £551.99M

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(s)

PR Newswire

23 January 2019 

(“Picton”, the “Company” or the “Group”)
LEI: 213800RYE59K9CKR4497

Net Asset Value as at 31 December 2018

Picton (LSE: PCTN), the property investment company, announces its Net Asset Value for the quarter ended 31 December 2018.

Highlights during the quarter included:

Positive results with improved balance sheet

  • Net Assets increased to £498.1 million (30 September 2018: £497.1 million).
  • NAV/EPRA NAV per share rose 0.3% to 92.5 pence (30 September 2018: 92.2 pence).
  • LTV of 25.0% (30 September 2018: 25.5%)
  • Total return for the quarter of 1.2% (30 September 2018: 1.5%).

Dividend declared and continued strong cover

  • Dividend of 0.875 pence per share declared and to be paid on 28 February 2019 (30 September 2018: 0.875 pence per share).
  • Annualised dividend equivalent to 3.5 pence per share, delivering a dividend yield of 4.2%, based on 22 January 2019 share price.
  • Dividend cover for the quarter of 123% (30 September 2018: 129%).

Continued portfolio activity 

  • Like-for-like increase in property portfolio valuation for the quarter of 0.1% (30 September 2018: 0.7%) driven by industrial sector gains.
  • Completed six lease renewals / regears and uplifts secured on eight rent reviews, on average 9.9% ahead of the September ERV, with a combined annual rent of £2.1 million.
  • Completed six lettings and one agreement to lease on average 2.1% below the September ERV, with a combined annual rent of £0.9 million.
  • Completed five surrenders and one agreement to surrender where the market rents are 23.2% ahead of rent passing and surrender payments received in excess of £0.3 million.
  • Occupancy of 93%, albeit principally impacted by the surrender activity (30 September 2018: 94%).

Nick Thompson, Chairman of Picton, commented: 

“Given the current macro environment, we are encouraged by positive NAV growth during the period. The benefits of lower taxation, through our entry into the REIT regime, alongside lower financing costs this quarter have positively contributed to this result.”

Michael Morris, Chief Executive of Picton, commented:

“As the debate and uncertainty around Brexit continues, it is becoming much clearer which parts of the market are still active and which are not. While we believe that our portfolio is well positioned with a strong weighting to the industrial sector, we’ve also proved that it is possible to limit the impact of some of the structural challenges being faced in other sectors through creative and innovative asset management. The expansion and transfer of Lidl from one unit in Swansea to replace a retailer subject to a CVA is an excellent example of this. We are also encouraged by our pipeline of asset management initiatives.”

This announcement contains inside information.

For further information:


Jeremy Carey/James Verstringhe, 020 7920 3150,


Michael Morris, 020 7011 9980, 

Note to Editors

Picton is a UK REIT established in 2005. It owns and actively manages a £684 million diversified UK commercial property portfolio, invested across 49 assets and with around 350 occupiers (as at 31 December 2018). 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: 


The unaudited Net Asset Value (‘NAV’) of Picton, as of 31 December 2018, was £498.1 million, reflecting 92.5 pence per share, an increase of 0.3% over the quarter.

31 Dec 2018
30 Sept 2018
30 June 2018
31 March 2018
Investment properties* 674.7 673.9 669.4 674.5
Other assets 16.7 18.8 16.6 17.9
Cash 22.8 20.1 44.0 31.5
Other liabilities (22.2) (21.4) (21.6) (22.5)
Borrowings (193.9) (194.3) (213.8) (214.0)
Net Assets 498.1 497.1 494.6 487.4
Net Asset Value per share 92.5p 92.2p 91.8p 90.4p

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

The NAV attributable to the ordinary shares is calculated under IFRS and incorporates the independent market valuation as at 31 December 2018, including income for the quarter, but does not include a provision for the dividend this quarter, which will be paid in February 2019.

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

Per share
NAV at 30 September 2018 497.1 92.2
Movement in property values 0.1 - -
Net income after tax for the period 5.8 1.2 1.1
Dividends paid (4.7) (0.9) (0.8)
Other (0.2) - -
NAV at 31 December 2018 498.1 0.3 92.5


A separate announcement has been released today (23 January 2019) declaring a dividend of 0.875 pence per share in respect of the period 1 October 2018 to 31 December 2018 (1 July 2018 to 30 September 2018: 0.875 pence). 

Post-tax dividend cover over the quarter was 123% (30 September 2018: 129%). 


Total borrowings at 31 December 2018 were £193.9 million, 87% of the debt is fixed under long term facilities, with the remainder at variable rates. The net gearing ratio, calculated as total debt less cash, as a proportion of gross property value, is 25.0% (30 September 2018: 25.5%). 

The weighted average debt maturity profile of the Group is approximately 10.1 years and the weighted average interest rate is 4.0%.

The Company has a further £26 million available from its undrawn RCFs. 


The portfolio valuation increased by 0.1% or £1.0 million, with the industrial sector delivering the strongest growth. The office sector saw a slight decline, which was in part due to the short-term impact of surrender activity. The retail and leisure sector valuation declined over the quarter, principally impacted by weaker sentiment in the regional retail and retail warehouse sectors.

The sector weightings at 31 December 2018 and valuation movements over the quarter are shown below:

Sector Portfolio
Like for like
Valuation change
Industrial 44.7% 2.3%
South East 31.5%
Rest of UK 13.2%
Offices 34.3% -0.4%
London City and West End 4.2%
Inner and Outer London 8.3%
South East 11.0%
Rest of UK 10.8%
Retail and Leisure 21.0% -3.2%
Retail warehouse 8.3%
High Street – Rest of UK 5.1%
High Street – South East 5.7%
Leisure 1.9%
Total 100% 0.1%

As of 31 December 2018, the portfolio had a net initial yield of 5.2% (allowing for void holding costs) or 5.4% (based on contracted net income) and a net reversionary yield of 6.5%. The weighted average unexpired lease term, based on headline rent, was 4.9 years. 

Occupancy reduced slightly to 93%, principally reflecting the surrender activity referred to below.

The top ten assets, which represent 50% 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
Stanford House, Long Acre, WC2 Retail London
Angel Gate, City Road, EC1 Office London
50 Farringdon Road, EC1 Office London
Tower Wharf, Cheese Lane, Bristol Office South West
Belkin Unit, Shipton Way, Rushden, Northants Industrial East Midlands
30 & 50 Pembroke Court, Chatham Office South East
Colchester Business Park, Colchester Office South East
Lyon Business Park, Barking Industrial Outer London

Key highlights in the quarter included:


Recognising the high occupancy in this element of the portfolio leasing activity was limited. We let a unit at Parkbury Radlett, achieving 100% occupancy, and securing £0.1 million per annum, in line with ERV. At the same estate we renewed two leases, increasing the passing rent by a combined 39% to £0.3 million per annum, 2% ahead of ERV and settled one rent review increasing the passing rent by 42% to £0.1 million per annum, 1% ahead of ERV.

At Nonsuch Industrial Estate in Epsom, where we have smaller units, we settled four rent reviews increasing the passing rent by 11% to a combined £0.1 million per annum setting a new rental tone for the estate. At the same estate we have surrendered two leases, so we can relocate an occupier and create a double unit to satisfy demand.

We extended £0.4 million of income at a 100,000 sq ft distribution facility at Haynes Way, Rugby on a short-term basis 33% ahead of ERV.


We let the first of two suites at 180 West George Street, Glasgow, generating income of £0.22 million per annum. During the period we received a floor back on lease expiry, which will be refurbished ahead of releasing alongside the remaining suite.

We surrendered a suite at Tower Wharf in Bristol, which expired in September 2019, receiving a payment of £0.34 million. Whilst this has a short-term impact on income and value we have completed a simple refurbishment and expect to secure a 40% uplift on the previous passing rent.

In a back to back transaction, we surrendered a lease at Trident House in St. Albans that had a break in September 2019, securing a new occupier on a new five-year lease at a rent of £0.11 million per annum in line with ERV.

Retail and Leisure

At Parc Tawe North in Swansea, we completed an Agreement to Lease with Lidl on the former Homebase unit, moving Lidl from its existing premises on the retail park and making it the anchor occupier.

Lidl currently occupies a 10,000 sq ft unit on a lease expiring in 2023 and will increase its footprint by 255%, as it takes the entire 35,500 sq ft previously occupied by Homebase. Following enabling works by Picton, Lidl will take a 20-year lease, with a break after 15 years, at an annual rent of £0.39 million.  The lease is subject to five-yearly Retail Price Index (RPI) based rent reviews capped at 2% per annum. Homebase was paying a rent of £0.44 million per annum on a lease expiring in 2022.

Lidl will continue to trade from its existing unit, paying £0.14 million per annum, until the enabling works and fit out have been completed at the former Homebase unit, which is expected to happen in the second quarter of 2019. The current lease will then be surrendered.

We simultaneously renegotiated a restrictive covenant to allow additional food retailing on the park and served notice to terminate Homebase’s lease as they had proposed a 90% reduction in rent post their CVA.

At Regency Wharf in Birmingham, we renegotiated a lease by inserting a rolling Landlord’s break option, which will enable us to secure vacant possession in the future. This will allow us to pursue a strategy of change of use from restaurant to office, which we anticipate will significantly enhance the ERV.

Two new occupiers were secured at Kings Heath in Birmingham, achieving 100% occupancy at the property. The combined rent is £0.07 million per annum, which is line with ERV.


According to the MSCI Monthly Index, the All Property total return was 1.1% for the quarter to December 2018, compared to 1.7% for the previous quarter. 

Capital growth was -0.2% (September 2018: 0.4%) and rental growth was -0.1% for the quarter (September 2018: 0.1%). A more detailed breakdown is shown below:

MSCI rental growth

Number of MSCI segments
Quarterly growth Positive growth Negative growth
Industrial 1.1% 7 -
Office 0.6% 9 1
Retail -1.5% - 20
All Property -0.1% 16 21

MSCI capital value growth

Number of MSCI segments
Quarterly growth Positive growth Negative growth
Industrial 2.2% 7 -
Office 0.6% 9 1
Retail -3.3% - 20
All Property -0.2% 16 21

*Source: MSCI Monthly Digest, December 2018


Occupier focused, Opportunity led