Occupier focused,
Opportunity led.
Focused on income
and value growth
Picton Property Income Limited
Annual Report 2025
Business Overview
Scan or click here to watch
our At a Glance video
We own and actively manage
a £723 million UK commercial
property portfolio, invested
across 47 assets and with
around 350 occupiers.
Through our occupier focused, opportunity led
approach, we aim to be the consistently best
performing diversified UK REIT. We have delivered
upper quartile outperformance and a consistently
higher income return than the MSCI UK Quarterly
Property Index since launch in 2005.
With a portfolio strategically positioned to capture
income and capital growth, currently weighted
towards the industrial sector, our agile business
model provides flexibility to adapt to evolving
market trends over the long term.
We have a responsible approach to business and
are committed to being net zero carbon by 2040.
We are listed on the main market of the London
Stock Exchange and a constituent of a number
of EPRA indices including the FTSE EPRA NAREIT
Global Index.
Strategic Report
01 Business Overview
02 Picton at a Glance
04 Highlights
06 Our Purpose
07 Our Strategy
08 Our Business Model
10 Strategy in Action
16 Chief Executive’s Review
20 Key Performance Indicators
24 Our Marketplace
26 Market Drivers
28 Portfolio Review
42 Financial Review
48 Managing Risks
49 Principal Risks
54 TCFD Statement
62 Sustainable Thinking
66 Environmental Focus
75 Social Impact
81 Governance
Governance
84 Chair’s Introduction
86 Governance at a Glance
88 Board of Directors
90 Our Team
92 Leadership and Purpose
96 Section 172 Statement
100 Division of Responsibilities
102 Composition, Succession and
Evaluation
104 Nomination Committee
109 Audit, Risk and Internal Control
110 Audit and Risk Committee
114 Property Valuation Committee
116 Remuneration Report
131 Directors’ Report
Financial Statements
134 Independent Auditor’s Report
138 Consolidated Statement of
Comprehensive Income
139 Consolidated Statement of Changes in
Equity
140 Consolidated Balance Sheet
141 Consolidated Statement of Cash Flows
142 Notes to the Consolidated Financial
Statements
Additional Information
160 EPRA BPR and Supplementary
Disclosures
164 Property Portfolio
165 Five-Year Financial Summary
166 Glossary
168 Financial Calendar and
Shareholder Information
Picton Property Income Limited
Annual Report 2025
We have focused on maximising
shareholder value through the review of
our capital priorities, ensuring proceeds
raised from repositioned office disposals
have been reinvested into portfolio
upgrades, repaid floating rate debt
and returned capital to shareholders.
Our occupier focused approach to
asset management ensures we work
collaboratively to help rightsize businesses
for success. Engaging with our occupiers
at key lease events, we have been able
to grow rental income and capture
reversionary potential.
We have been upgrading the portfolio to
improve environmental credentials and
occupier amenities. Our priority has been
focused on the office sector, which has
enabled us to attract and retain occupiers,
while also driving rental value growth.
Strategic capital allocation:
creating value
Proactive asset management:
growing income and capital
Sustainable refurbishments:
investing into the portfolio
Read more
onpages 10 to 11
Read more
onpages 12 to 13
Read more
onpages 14 to 15
Picton Property Income Limited
Annual Report 2025
01
Strategic
Report Governance
Financial
Statements
Additional
Information
2005
Inception
140p
120p
100p
80p
60p
40p
20p
0p
Pence per share
2005 20152010 2020 2025
2007
Global Financial
Crisis
2012
Internalisation
2018
REIT
conversion
2025
2015
£723m
£541m
2005 £491m
2025
2015
24%
30%
2005 40%
2016
Brexit
2020
Covid-19
2022
Start of interest
rate increases
Picton at a Glance
We are a diversified Real Estate Investment Trust (REIT)
investing in UK commercial property. Our property
portfolio consists of 47 assets invested in the industrial,
office, retail and leisure sectors.
Our portfolio composition
We own a portfolio strategically positioned to capture
income and capital growth through our asset and sector
selection. Our agile business model provides flexibility to
adapt to evolving market trends.
Industrial 64%
Office 24%
Retail & Leisure 12%
Our portfolio weightings
Portfolio valuation
£723m
Loan to value
24%
Industrial
Office
Retail & Leisure
Cumulative dividends paid
NAV per share
Picton Property Income Limited
Annual Report 2025
02
What makes
us different?
Long-term track record of
outperformance through a
diversified investment strategy
Our agile business model provides flexibility
to adapt our portfolio to evolving market
trends. Our proactive approach to asset
management means we have delivered
upper quartile outperformance against the
MSCI UK Quarterly Property Index over three,
five and ten years and since launch in 2005.
Attractive capital structure
We have a disciplined approach to capital
management, with long-term fixed rate
debt. We are focused on delivering a covered
and sustainable dividend through our asset
and sector allocation.
Portfolio with strong
income focus and significant
reversionary potential
Our diverse occupier base generates
a stable income stream, underpinned
by a well-positioned portfolio across
sectors. We aim to capture rental
growth and increase income through
our active asset management.
Fully aligned and responsible
approach to business
We are an internally managed business with
a fully aligned team. Our occupier focused
and hands-on approach ensures we engage
with our occupiers to create spaces to help
them succeed and maintain high occupancy
across the portfolio. We are committed to
enhancing the environmental performance of
our buildings, and meeting our sustainability
commitments while generating value for
all our stakeholders.
Scan or click here
to watch our Picton
Promise video
Read more
on page 08
Read more
on page 42
Read more
on page 28
Read more
on page 62
12
Consecutive years of
MSCI outperformance
100%
Long-term fixed rate debt
100%
Internally managed,
aligned team
For more information on our
strategy and performance
track record please see:
Our Strategy page 07
Key Performance
Indicators page 20
Portfolio Review page 28
Financial Review page 42
Sustainable Thinking
page 62
Picton Property Income Limited
Annual Report 2025
03
Strategic
Report Governance
Financial
Statements
Additional
Information
2025
2024
£37m
-£5m
2023 -£90m
2025
2024
£23m
£22m
2023 £21m
2025
2024
4.2p
4.0p
2023 3.9p
2025
2024
8.1%
-0.9%
2023 -13.9%
2025
2024
6.9p
-0.9p
2023 -16.5p
2025
2024
113%
114%
2023 112%
2025
2024
£533m
£524m
2023 £548m
2025
2024
100p
96p
2023 100p
Highlights
Our diversified approach has enabled
a track record of MSCI upper quartile
outperformance since launch in 2005
.
Valuable long-term
debt structure
Strong financial performance
delivering income and value growth
For more information on
our strategy and financial
performance see:
Chief Executive’s
Review page 16
Key Performance
Indicators page 20
Financial Review
page 42
Loan to value
24%
Borrowings
£210m
At fixed interest rates
Weighted average
interest rate
3.7%
Debt maturity profile
6.7 years
EPRA Net Disposal Value
(per share)
105p
Reflecting fair value of debt
Profit after tax
£37m
EPRA earnings
£23m
EPRA earnings per share
4.2p
Total return
8.1%
Earnings per share
6.9p
Dividend cover
113%
Net assets
£533m
NAV per share
100p
Picton Property Income Limited
Annual Report 2025
04
Picton MSCI
Mar
2015
Source: MSCI UK Quarterly Property Index
Mar
2016
Mar
2017
Mar
2018
Mar
2019
Mar
2020
Mar
2021
Mar
2022
Mar
2023
Mar
2024
Mar
2025
150
0
50
100
200
250
Total returns indexed from March 2015
Outperforming repositioned portfolio
with improved income and occupancy
All figures are as at 31 March 2025 or for the year ended 31 March 2025 unless otherwise stated.
The Financial Statements are prepared under IFRS. We use a number of alternative
performance measures (APMs) when reporting on the performance of the business and its
financial position. In common with many other listed property companies, we report the EPRA
performance measures. In the Additional Information section of this report on pages 160 to 163
we provide more detailed information and reconciliations to IFRS where appropriate.
Rent collection
99%
Occupancy
94%
Increase in ERV
3.8%
Upgrading and investing into
the portfolio
£12m
Lease transactions
78
9% ahead of ERV
Like-for-like increase
in contracted rent
3.0%
Office disposals
£51m
5.4% above March 2024 valuation
EPC ratings (A-C)
Improved from 80% in 2024
83%
These are very positive results
across key metrics. We have delivered
a profit of £37 million, 5% growth
in EPRA earnings and 4% growth
in net assets.
We are focused on income and value
growth for the benefit of shareholders.
We have outperformed the FTSE 350
REIT Index alongside our twelfth
consecutive year of outperformance
against the MSCI UK Quarterly
Property Index. This is the fifth
consecutive year of EPRA earnings
growth. We have again operated with
a well-covered dividend and recently
announced a 2.7% dividend increase,
the fifth increase since 2020.
Additionally, we intend to continue
our share buyback programme using
disposal proceeds to enhance earnings.
Francis Salway
Chair
Picton Property Income Limited
Annual Report 2025
05
Strategic
Report Governance
Financial
Statements
Additional
Information
Our Purpose
To be a responsible owner of
commercial real estate, helping
our occupiers succeed and being
valued by all our stakeholders.
Our purpose drives our decision making,
ensuring we create long-term value for our
shareholders, occupiers, and other stakeholders.
Our values
Our values have been
co-created by the
team and guide our
approach to running
the business.
Positive
We are collaborative,
upbeat and put people
at the forefront
We foster strong relationships
and invest in our shared success.
We demonstrate this through
our culture, our occupier focused
approach and engagement
with all our stakeholders.
Proactive
We are forward thinking,
agile and adaptive
We demonstrate this through our
asset management and dynamic
positioning of the portfolio.
Principled
We are professional,
diligent and strategic
We demonstrate this
through our integrity and
work ethic, our transparent
reporting and alignment with
our shareholders, and our
commitment to sustainability
and environmental initiatives.
Picton Property Income Limited
Annual Report 2025
06
Our Strategy
Through our occupier focused, opportunity
led approach, we aim to be the consistently
best performing diversified UK REIT.
01
Portfolio
Performance
Maximising
portfolio value
and income
02
Operational
Excellence
Driving efficiency
andadaptability
03
Acting Responsibly
Sustainability,
engagement,
and governance
Key focus areas
– Manage sector and asset allocation to grow income
and capital
– Reduce exposure to lower yielding assets
– Grow occupancy and income profile
– Enhance asset quality and create space that meets
evolving occupier expectations
– Outperform the MSCI UK Quarterly Property Index
Key focus areas
– Maintain disciplined approach to capital structure
and use of disposal proceeds
– Run an efficient and innovative operating platform
– Adapt to market trends with an agile and flexible
business model
– Deliver earnings growth
– Improve share price rating to facilitate future growth
Key focus areas
– Reduce our emissions to become net zero carbon
by 2040
– Actively engage with our occupiers, shareholders,
communities and other stakeholders
– Promote our Company values, nurture a positive
working culture, and alignment of the team
– Ensure the long-term success of the business with
strong governance and transparent reporting
We are focused on delivering
long-term income and
value. We invest in assets
with strong fundamentals
where we can unlock future
value, balancing income with
growth opportunities.
We drive portfolio performance
through our proactive asset
management and ensure
operational excellence with
disciplined capital allocation.
We are committed to acting
responsibly and future-proofing
our portfolio to meet our
evolving occupier needs and our
sustainability commitments.
Our Key Performance Indicators
1
Total return (%)
2
Total shareholder return (%)
3
Total property return (%)
4
Property income return (%)
5
Loan to value ratio (%)
6
Cost ratio (%)
7
EPRA NTA per share (pence)
8
EPRA earnings per share (pence)
9
EPRA vacancy rate (%)
10
Retention rate (%)
11
EPC rating A-C (%)
12
Employee satisfaction (%)
Relevant KPIs
1
3
4
7
9
10
Relevant KPIs
1
2
3
5
6
8
Relevant KPIs
2
10
11
12
For more information on
our strategic progress
and performance across
our report see:
Chief Executive’s
Review page 16
Key Performance
Indicators page 20
Principal Risks page 49
Picton Property Income Limited
Annual Report 2025
07
Strategic
Report Governance
Financial
Statements
Additional
Information
We have the flexibility
to adapt to changing
market conditions and
deliver value to our
stakeholders through
the property cycle.
Selling assets to
recycle into better
opportunities
Asset selection
and acquisition
Knowledge, expertise and
research-led decision making
Creating value through
proactive asset management
04 02
01
03
Our Business Model
We create value through managing a portfolio that generates a
diversified and stable income stream. We have the flexibility to
adapt to changing market conditions and so deliver value to our
stakeholders through the property cycle.
Underpinned by effective
risk management
Our business model is underpinned by our
approach to risk management. We adapt our
capital structure and use debt effectively to achieve
enhanced returns. We maintain a covered dividend
policy to generate a surplus which we can invest
back into the portfolio.
Responsible
stewardship
We have a responsible and ethical approach
to business and sustainability is embedded
within our corporate strategy. We understand
the impact of our business on the environment
and are committed to acting for the benefit of
all our stakeholders.
For more
information see:
Principal Risks page 49
Sustainable Thinking
page 62
Picton Property Income Limited
Annual Report 2025
08
2025
2024
16%
-1%
2025
2024
£12m
£4m
2025
2024
76%
86%
2025
2024
20%
16%
2025
2024
15
15
Creating value for our stakeholders:
Shareholders
Delivering income
and capital growth
for our shareholders
Occupiers
Providing sustainable
spaces to help
occupiers succeed
Employees
Fostering a strong
open culture, with
high employee
satisfaction score
Environment
Targeting 2040 net zero
carbon commitment
Communities
Making a positive
difference
Total shareholder return
16%
Investment into asset upgrades
£12m
Employee satisfaction score
76%
Reduction in Scope 1 & 2 emissions
compared to 2019 baseline
20%
Charities supported
15
01
Knowledge, expertise and
research-led decision making
Our in-depth understanding of the UK
commercial property market enables
us to identify and source value across
different sectors and reposition the
portfolio through the property cycle.
This expertise is underpinned by our
commitment to responsible investment,
integrating Environmental, Social
and Governance principles into our
decision making to drive sustainable
value and mitigate risks, for the
benefit of all our stakeholders.
02
Asset selection and acquisition
We have established a diversified
UK property portfolio which we
adjust as market conditions dictate.
We consider opportunities where we
can enhance value and/or income.
We consider and mitigate climate
change risks through our acquisition
process and due diligence.
03
Proactive asset management
Our diverse occupier base generates a
stable income stream, which we aim to
grow through active management and
capturing market rental uplifts. Our occupier
focused, opportunity led approach ensures
we create space that meets occupiers’
expectations in order to maintain high
levels of occupancy across the portfolio.
We are committed to mitigating climate
change risks and carry out sustainability
improvements across the portfolio to
meet our net zero carbon commitments.
04
Capital recycling and allocation
We identify assets for disposal to
maximise value creation. Proceeds are
invested into new opportunities, or
used elsewhere within the Group.
We ensure capital is efficiently
recycled, enhancing returns and
creating value for stakeholders.
Picton Property Income Limited
Annual Report 2025
09
Strategic
Report Governance
Financial
Statements
Additional
Information
STRATEGY IN ACTION
Strategic capital
allocation:
creating value
We remain firmly focused
on shareholder value and
responding to market
opportunities and challenges.
In recognition of the
disconnect between our
share price and our NAV, we
have reviewed and adapted
our capital priorities.
We have sought to maximise value to
shareholders through unlocking opportunities
with our alternative use strategy and raised £51
million of capital through disposal proceeds
during the year. These have facilitated the
rebalancing of our portfolio by reducing our
office exposure, repaying our entire floating
rate debt, investing into upgrading the
portfolio and returning capital to shareholders.
During the year, we completed the disposals
of three office assets where planning
permission was secured for residential and
student living uses. The total gross proceeds
from the three disposals was a 5.4% premium
to the valuation as at 31 March 2024.
£51m
Total gross proceeds from
repositioned asset disposals
24%
Office exposure, reduced
from 30% in 2024
1
2
3
Link to strategic
priorities:
Picton Property Income Limited
Annual Report 2025
10
Capital priorities during the year
Three repositioned office
asset disposals completed
during the year
Angel Gate, London
Alternative use: Residential
Completion date: Apr 2024
Gross proceeds: £29.6m
Premium to March 2024: 2%
Capital priorities: 1,3,4
Charlotte Terrace, London
Alternative use: Residential
Completion date: Jan 2025
Gross proceeds: £13.1m
Premium to March 2024: 4%
Capital priorities: 2,3
Longcross, Cardiff
Alternative use: Student
Completion date: Mar 2025
Gross proceeds: £8.3m
Premium to March 2024: 21%
Capital priorities: 2,3
1.
Reduce leverage
Central bank base rates remain
elevated and as such debt is less
accretive to returns. We therefore
prioritised reducing our leverage
through the repayment of our
floating rate revolving credit facility.
The drawn balance (£16.4 million)
was repaid in full from the proceeds
from the sale of Angel Gate, London
which completed in April 2024.
4.
Selective tactical
investment opportunities
Whilst we have seen an increase
in the volume of opportunities
this year, acquisitions have been
deprioritised except where
they are tactical to the existing
portfolio. We completed on
one acquisition (£0.5 million), in
November 2024, which was a
building adjacent to our existing
industrial asset in Gloucester.
2.
Share buybacks
The share buyback programme
offers an attractive risk adjusted
return for shareholders, being
accretive to both net assets per share
and EPRA earnings per share. Our
strong balance sheet and modest
gearing levels also support this. This
year we launched a £12.5 million
share buyback programme and
as at 31 March 2025, a total of 11.2
million shares at an average price
of 67p have been bought back.
3.
Reinvestment in
the portfolio
Whilst we have been committed
to reducing our office exposure,
we have also reinvested in our
remaining portfolio to unlock
reversion and maximise total
returns. During the year £11.8 million
was invested in the portfolio,
improving occupier amenities
and environmental credentials.
Capital recycled
£51m
Additional
Information
Financial
StatementsGovernance
Strategic
Report
Picton Property Income Limited
Annual Report 2025
11
STRATEGY IN ACTION
Proactive asset
management: growing
income and capital
Our occupier focused
approach to asset
management means we
have built longstanding
relationships with
our occupiers.
Proactive asset management helps us to
understand occupiers’ needs and through
ongoing communication and collaboration,
help their businesses succeed.
During the course of this year, we have been
working hard to capture the reversionary
potential in our portfolio through lease
events including rent reviews, lease
renewals, regears and surrenders.
With numerous lease events on
approximately a quarter of the portfolio by
rental value, we have improved occupancy,
increased contracted rental income by
3% and improved income longevity.
24%
Increase in contracted
income at key lease events
1
2
3
Link to strategic
priorities:
Picton Property Income Limited
Annual Report 2025
12
Capturing rental growth
at Parkbury, Radlett
At our largest industrial asset,
we have captured rental
growth through proactive
asset management.
We relocated an occupier to
another one of our assets,
more suited to their needs,
and facilitated another
occupier to take more space.
We retained an occupier 53%
ahead of the previous rent and
agreed to retain another occupier
64% ahead of the previous rent.
We have settled two further
rent reviews on the estate,
increasing the passing rent
on those units by 53%.
Creating value and
improving income
position at Datapoint,
London
We surrendered a lease on a unit
and simultaneously re-leased
it post refurbishment to an
adjoining occupier. We agreed
a payment from the outgoing
occupier that contributed to the
costs of the unit’s refurbishment.
By undertaking this transaction
we also increased and extended
the overall income, creating rental
evidence for the wider estate.
Elsewhere on the estate we
settled a rent review increasing
the passing rent by 33% and
renewed a lease, increasing
the passing rent by 47%.
Delivering rental
uplift at Grafton Gate,
Milton Keynes
During the year, we agreed
the renewal of leases with two
occupiers, both technology
companies, accounting for
approximately 50% of the
building’s floorspace.
As part of these transactions we
will upgrade the air conditioning
system to all electric in 2025 and
this is expected to improve the
EPC of the building to an A rating.
The combined rent was £0.8
million per annum, an uplift of
23% on the previous passing
rent and 33% ahead of ERV.
We have two suites to lease
accounting for approximately
25% of the building’s floorspace,
one having become available
at year end, and they will be
refurbished simultaneously,
ahead of re-leasing.
55%
Lease event uplift in
contracted income
at Parkbury,Radlett
30%
Lease event uplift in
contracted income
atDatapoint, London
23%
Lease event uplift in
contracted income
atGrafton Gate,
Milton Keynes
Improving income through key lease events
Contracted income
Sector Asset Event
vs previous
%
vs Mar 24 ERV
%
Lease length
improvement
Industrial Grantham Regear 0% 8% 13 years
Industrial Harlow Surrender/letting 53% 5% 5 years
Industrial Datapoint Letting/renewal/rent review/regear 30% 9% 7 years
Office Milton Keynes Renewal 23% 33% 4 years
Industrial Radlett Renewal/rent review 55% 1% 5 years
Total 24% 9%
Having worked with a number of landlords
over the years, it has been refreshing working with
Picton by comparison. We’re able to hold sensible,
logical discussions and negotiations enabling us
to grow our operation. Their assets are well cared
for and managed.
Netwise, Datapoint, London
Additional
Information
Financial
StatementsGovernance
Strategic
Report
Picton Property Income Limited
Annual Report 2025
13
Sustainable
refurbishments:
investing into the
portfolio
Enhancing environmental
credentials, improving
amenities and creating value.
We are committed to improving not
only the environmental credentials
of our buildings, but also ensuring
they meet occupier requirements as
demand for sustainable workspace and
best-in-class amenities increases.
This year has been a significant year for
investment in our portfolio. We have
prioritised upgrading our assets, particularly
in the office sector which has enabled us to
attract and retain occupiers, whilst also driving
rental value growth. One key example is our
investment this year at Tower Wharf, Bristol,
which has led to rental values increasing by 5%.
5%
Increase in rental value
at Tower Wharf, Bristol
1
2
3
Link to strategic
priorities:
STRATEGY IN ACTION
Picton Property Income Limited
Annual Report 2025
14
Tower Wharf, Bristol
Tower Wharf is a 70,000 sq ft building
originally constructed to a BREEAM Excellent
specification in 2006 and is located in central
Bristol. Offering waterside views, roof terraces
and a spacious reception area, alongside
end of trip facilities, this office space already
provided many sought after amenities.
With 20,600 sq ft of space becoming
available from occupiers downsizing and
relocating post-pandemic, we developed
a scheme to refurbish the office space
whilst simultaneously upgrading the air
conditioning, transitioning from gas to
electric, and, in line with our sustainable
refurbishment guidelines, reusing, recycling
and repurposing where possible.
We also worked with an existing occupier to
enable them to relocate within the building
and take on 150% more space, moving from
part of the ground floor to the whole of the
third floor that had recently been vacated.
Recognising greater occupational demand
for smaller fully fitted suites, we divided
the first floor into two suites of between
3–4,000 sq ft, which we also refurbished to
a fully fitted standard, ready for immediate
occupation and these are under offer to lease.
During 2025 we plan to replace the remaining
gas fired air conditioning, to run the whole
building on green electricity and provide
fully decarbonised workspace. We also have
further works planned to the reception area
and façade, future-proofing the building
to retain and attract future occupiers.
This refurbishment strategy has resulted in a
5% increase in rental value over the year. We
anticipate a return on cost post letting of 21%.
We have successfully reduced our vacancy
at the building with positive leasing activity,
retained occupiers with the provision of
higher quality sustainable workspace, and
reduced our net zero carbon transition risk.
B
EPC rating
£2.1m
Total investment
£0.2m
Circular economy savings
Additional
Information
Financial
StatementsGovernance
Strategic
Report
Picton Property Income Limited
Annual Report 2025
15
Chief Executive’s Review
We have improved
occupancy, upgraded
the quality of our
portfolio and delivered
earnings growth.
Michael Morris
Chief Executive
Scan or click here to
watch our Results video
Picton Property Income Limited
Annual Report 2025
16
We have successfully continued
our long-term track record of
outperformance and grown
income and value.
£723m
Portfolio valuation
100p
Net asset value per share
4.2p
EPRA earnings per share
These are positive results, showing progress
across multiple areas. We are pleased to
be able to report a profit of £37 million,
recognising an increase in the portfolio value
over the year and EPRA earnings of £23 million.
Net assets have grown to 100 pence per share.
We have improved portfolio occupancy
and income, reduced financing costs and
invested more than ever before into the
portfolio to enhance our assets and retain
and attract new occupiers. This has enabled
us to grow the like-for-like rental income
and reversionary upside within the portfolio,
which will underpin future earnings growth.
We have paid dividends of £20 million,
up 6% on the preceding year, while
maintaining a well-covered dividend of
113%. In January of this year, we launched a
share buyback programme utilising some
of the proceeds from our asset disposals.
These have been accretive and have further
contributed to these positive results.
Performance
During the year we have seen growth in
both our net assets and our EPRA earnings
per share, up 4% and 5% respectively. This
led to a total return of just over 8%. Over the
same period our shareholder total return
was 16%, reflecting an improved share price
rating at the year end, in part recognising the
impact of our share buyback programme.
Our net asset value is £533 million and
although our portfolio valuation reduced, this
was because we have made asset disposals.
This has allowed us to repay our floating
rate debt and reduce our financing costs.
We have again operated with a fully covered
dividend and we announced following
the year end, a near 3% increase in our
dividend effective May 2025, which is the
fifth successive increase since 2020.
Portfolio performance
We have continued to outperform the MSCI
UK Quarterly Property Index, now for the
twelfth consecutive year. Since launch in
2005 we have delivered upper quartile total
return performance at a property level.
Occupancy at the year end was 94%, up
from 91% a year ago and with two vacant
office asset disposals in the final quarter, the
full impact of lower property costs has not
been fully recognised in this year’s results.
There is over £7.5 million of reversion in
the portfolio. Approximately £4.1 million
is where contracted rent is below ERV,
compared with £3.6 million last year and
£3.4 million of space available to lease,
compared with £5.3 million last year. This will
underpin medium-term earnings growth.
Nearly two thirds of the portfolio is now
invested in industrial, warehouse and
logistics assets and this is where there
is the biggest reversionary upside.
Our diversified approach enables us to adjust
the portfolio to changing market conditions,
and this year has been no exception as we
have sought to reduce our office exposure,
particularly where we have identified assets
that can be repositioned for higher value
alternative uses. The two assets identified
for disposal a year ago have now been sold,
in addition to a third where planning was
secured during the year. Total gross proceeds
of £51 million were realised, reflecting disposals
at a 5% premium to their March 2024 valuation.
During the year, office exposure has reduced
from 30% to 24% and we expect this to
reduce further this year as we make selective
disposals, particularly of lower yielding assets
or, where we believe additional value can be
extracted from alternative use projects.
Picton Property Income Limited
Annual Report 2025
17
Strategic
Report Governance
Financial
Statements
Additional
Information
Operational excellence
We are in a strong operational position,
having conservative but valuable financing
arrangements. Overall, our loan to value ratio is
a modest 24%. All our drawn debt is currently
fixed at interest rates well below prevailing
market levels and with the earliest maturity
in 2031. Our EPRA NDV, which reflects the
fair value of our debt is 105 pence per share
or 5% higher than our published EPRA NTA.
Following the year end we completed the
refinancing of our revolving credit facility.
This is currently undrawn but provides £50
million of additional operational flexibility
and opportunity for future investment.
We also have been able to grow earnings
by reducing void costs through disposals
and managing our administrative
costs as efficiently as possible.
We have recently
completed the
refinancing of our
revolving credit
facility, providing
£50 million of additional
operational flexibility
and opportunity for
future investment.
Michael Morris
Chief Executive
Acting responsibly
We have invested £12 million into upgrading
assets including key decarbonisation
projects in the office sector to aid future
leasing prospects. We now have 83% of the
portfolio with EPC ratings of A-C, up from
55% in 2020. Equally, 40% of the portfolio
is rated A-B, up from 9% in 2020, reflecting
our ongoing progress, particularly focused
around the timing of lease events.
From a governance perspective, we welcome
Francis Salway as our new Chair and
Helen Beck as Chair of the Remuneration
Committee, who have joined during the
year. I would like to take this opportunity
to thank Lena Wilson and Maria Bentley
for their contributions during their tenure.
I would also like to thank the team and the
wider Board for all their input and support
this year in helping us deliver these results.
105p
EPRA NDV per share
24%
Loan to value
Chief Executive’s Review continued
Picton Property Income Limited
Annual Report 2025
18
Equity capital markets
The Board is well aware of the disconnect
in the listed real estate sector between
share prices and reported net asset values.
This has led to considerable corporate M&A
activity this year, with purchasers taking
advantage of this arbitrage, as companies
have been either taken over or taken private
at levels more reflective of book value.
The Board is focused on improving
shareholder value and remains mindful of
opportunities that might exist to achieve
this. It is some comfort to see the discount
narrowing this year, alongside our decision
to allocate capital for share buybacks.
The Board will continue to repurchase
shares this coming year, utilising proceeds
from future disposals to achieve this,
whilst pursuing other investment
opportunities that grow earnings.
We have invested
significantly into our
assets, and now have
83% of the portfolio with
EPC ratings A–C, up
from 55% in 2020.
Michael Morris
Chief Executive
Outlook
The team is focused on delivering
positive outcomes for shareholders and
other stakeholders. We have a strong
balance sheet and attractive financing
that underpins future success.
In terms of the portfolio, we continue to
improve our assets, enabling us to capture
rental value growth and increase the
reversionary income. We have proven
this year our ability to continue unlocking
value across the portfolio in terms of the
reversion, which primarily is focused within
the industrial assets. Whilst the office
assets are more challenging, pricing has
compensated for some of the additional
risks and we have proven our ability to
crystallise upside from disposals within
this sector, which we expect to continue.
By improving occupancy further we should
be able to not only improve rental income
but reduce property costs associated
with vacant property. Across the portfolio
we have a pipeline of opportunities
that should provide further potential
to capture income or value growth.
Our priorities for the year ahead are:
– Portfolio rebalancing: continuing to improve
the portfolio rental income profile, by
reducing exposure to lower yielding assets.
We will reinvest into higher yield/growth
opportunities
– Portfolio investment: continuing to invest
into the portfolio to upgrade assets and
create value and income growth
– Leverage: maintaining prudent leverage,
using our revolving credit facility tactically
for accretive opportunities
– Shareholder capital: continuing to utilise our
share buyback programme, to unlock value
whilst the discount remains elevated,
providing liquidity to shareholders
We have a long-term track record of property
level MSCI outperformance, stretching back
nearly 20 years. We are focused on ensuring this
continues and equally, that this is reflected in
share price performance this forthcoming year.
Michael Morris
Chief Executive
21 May 2025
Read more in our
Sustainable Thinking
on pages 62 to 83
Picton Property Income Limited
Annual Report 2025
19
Strategic
Report Governance
Financial
Statements
Additional
Information
2025
2024
8.1%
-0.9%
2023
-13.9%
2025
2024
16 .0%
-1.0%
2023 -26.4%
2025
2024
7.3%
1. 6%
2023
-8.7%
Key Performance Indicators
We have a range of key performance
indicators that we use to measure the
performance and success of the business.
Financial KPIs
8.1%
16.0%
7.3%
Why we use this indicator
The total return is the key measure of the overall performance of the
Group. It is the change in the Group’s net asset value, calculated in
accordance with IFRS, over the year, plus dividends paid.
The Group’s total return is used to assess whether our aim to be the
consistently best performing diversified UK REIT is being achieved,
and is a measure used to determine the annual bonus.
Our performance in 2025
Our total return for the year was driven by valuation gains, most notably
in the industrial and retail sectors, realised gains on repositioned office
disposals and growth in EPRA earnings.
Why we use this indicator
The total shareholder return measures the change in our share price
over the year, plus dividends paid. We use this indicator because
it is the return seen by investors on their shareholdings.
Our total shareholder return relative to a comparator group is
a performance metric used in the Long-term Incentive Plan.
Our performance in 2025
An increase in the share price over the year, supported by the share
buyback programme, together with increased dividends, contributed
to a return of 16%.
Why we use this indicator
The total property return is the combined income and capital return
from our property portfolio for the year, as calculated by MSCI. We use
this indicator because it shows the success of the portfolio strategy
without the impact of gearing and corporate costs.
Our total property return relative to the MSCI UK Quarterly Property
Index (over one year) is a performance condition for the annual bonus
and (over three years) for the Long-term Incentive Plan.
Our performance in 2025
We have outperformed the MSCI UK Quarterly Property Index for the
twelfth consecutive year, delivering a return of 7.3% compared to the
Index return of 6.3% for the year. We have also delivered upper quartile
outperformance against MSCI over three, five and ten years, and since
launch in 2005.
1/ Total return
2/ Total shareholder return
3/ Total property return
Link to strategic priorities:
1
2
3
Link to strategic priorities:
1
2
3
Link to strategic priorities:
1
2
3
Picton Property Income Limited
Annual Report 2025
20
2025
2024
5.2%
5.1%
2023 4.4%
2025
2024
24%
28%
2023 27%
2025
2024
1.3%
1.2%
2023 1.0%
We consider that industry standard measures, such as those calculated
by MSCI, are appropriate to use alongside certain EPRA measures
and others that are relevant to us. In this regard, we consider that the
EPRA net tangible asset per share (EPRA NTA), earnings per share and
vacancy rate are the most appropriate measures to use in assessing
our performance.
Key performance indicators are also used to determine variable
remuneration rewards for the Executive Directors and the rest of the
team. The indicators used are total return, total shareholder return, total
property return and EPRA earnings per share. This is set out more fully
in the Remuneration Report.
5.2%
24%
1.3%
Why we use this indicator
The property income return, as calculated by MSCI, is the income
return of the portfolio. Income is an important component of total
return and our portfolio is biased towards income generation in
addition to capital growth.
Our performance in 2025
The income return for the year of 5.2% was ahead of the MSCI UK
Quarterly Property Index of 4.8% and we have also outperformed
over three, five and ten years, and since launch in 2005.
Why we use this indicator
The loan to value ratio is total Group borrowings, net of cash, as a
percentage of the total portfolio value. This is a recognised measure
of the Company’s level of borrowings and is a measure of financing
risk. See the Supplementary Disclosures section for further details.
Our performance in 2025
The loan to value ratio has decreased over the year with the positive
valuation movements and repayment of the revolving credit facility.
Why we use this indicator
The cost ratio, recurring administration expenses as a proportion of
the average net asset value, is a measure of how efficiently the business
is being run, and the extent to which economies of scale are being
achieved. See the Supplementary Disclosures section for further details.
Our performance in 2025
The cost ratio has increased over the year, partly due to the share
buyback programme which has reduced net assets over the period,
and staff costs.
4/ Property income return
5/ Loan to value ratio
6/ Cost ratio
Link to strategic priorities:
1
2
3
Link to strategic priorities:
1
2
3
Link to strategic priorities:
1
2
3
Our strategic priorities
Portfolio Performance
1
Operational Excellence
2
Acting Responsibly
3
Remuneration link
Picton Property Income Limited
Annual Report 2025
21
Strategic
Report Governance
Financial
Statements
Additional
Information
2025
2024
100p
96p
2023 100p
2025
2024
4.2p
4.0p
2023 3.9p
2025
2024
6.2%
9.2%
2023 9.5%
Key Performance Indicators continued
EPRA KPIs
100p
4.2p
6.2%
Why we use this indicator
The EPRA net tangible assets (NTA) per share, calculated in accordance
with EPRA, measures the value of shareholders’ equity in the business.
We use this to measure the growth of the business over time and
regard this as the most relevant net asset metric for the business.
Our performance in 2025
The EPRA NTA per share has increased this year by 4% as a result of
the positive valuation movements, gains on asset disposals, share
buybacks, growth in EPRA earnings and operating a covered dividend.
Why we use this indicator
The earnings per share, calculated in accordance with EPRA, represents
the earnings from core operational activities and excludes investment
property revaluations, gains/losses on asset disposals and any
exceptional items. We use this because it measures the operating profit
generated by the business from the core property rental business.
The growth in EPRA earnings per share is also a performance measure
used for the Long-term Incentive Plan.
Our performance in 2025
We have grown EPRA earnings this year by 5% which was as a result of
our office repositioning and disposal strategy allowing repayment of
the floating rate debt and reducing void costs, in addition to securing
reversion on the industrial portfolio.
Why we use this indicator
The vacancy rate measures the amount of vacant space in the portfolio
at the end of each financial period, and over the long-term, is an
indication of the success of asset management initiatives undertaken.
Our performance in 2025
The repositioning and disposal of three part-vacant office assets,
together with letting activity across the portfolio, has led to a reduction
in the EPRA vacancy rate.
7/ EPRA NTA per share
8/ EPRA earnings per share
9/ EPRA vacancy rate
Link to strategic priorities:
1
2
3
Link to strategic priorities:
1
2
3
Link to strategic priorities:
1
2
3
Picton Property Income Limited
Annual Report 2025
22
2025
2024
66%
76%
2023 67%
2025
2024
83%
80%
2023 76%
2025
2024
76%
86%
2023 82%
Non-financial KPIs
66%
83%
76%
Why we use this indicator
This provides a measure of ERV at risk and the retention of that ERV
during the year. This is achieved through lease extensions or removal
of break options.
Our performance in 2025
Excluding properties held for sale, total ERV at risk due to lease expiries
or break options totalled £6.4 million, in line with last year.
Of the ERV at risk in the year, we retained 66% through lease renewals or
removal of break options. In addition, 18% of the ERV not retained, was let
to a different occupier within the year, ensuring a positive outcome on
84% of the total ERV at risk. A further £5.4 million of ERV was retained
through lease extensions, removal of breaks or back-to-back surrender
and releasing, where lease events were dated after the year end.
Why we use this indicator
Energy Performance Certificates (EPCs) indicate how energy efficient a
building could be by assigning a rating from A (very efficient) to G (very
inefficient). From 1 April 2023, Minimum Energy Efficiency Standards
(MEES) regulations prohibited leasing space that is F or G rated, unless
an exemption certificate applies. The minimum EPC rating is likely to be
raised further, with the UK Government consulting on proposals to
require a minimum of C by 1 April 2028, and B by 1 April 2030.
Our performance in 2025
The proportion of EPC ratings between A–C has increased this year to
83%. Of the remainder, 15% is rated D and only 2% is rated E. We are fully
compliant with MEES regulations and have no F or G ratings in the
portfolio. The proportion of EPC A-B ratings has improved significantly
over the last six years, from 9% in March 2020, to 40% in March 2025.
Why we use this indicator
We use this indicator to assess our performance against one of our
strategic objectives, to nurture a positive culture reflecting the values
and alignment of the team. The indicator is based on the employee
survey carried out during the year.
Our performance in 2025
Our employee satisfaction score remains high but has decreased
this year, a potential reflection of the wider economic uncertainty
and increased workload across the business.
10/ Retention rate
11/ EPC rating A-C
12/ Employee satisfaction
Link to strategic priorities:
1
2
3
Link to strategic priorities:
1
2
3
Link to strategic priorities:
1
2
3
Picton Property Income Limited
Annual Report 2025
23
Strategic
Report Governance
Financial
Statements
Additional
Information
Our Marketplace
Macroeconomic conditions remain
uncertain despite a backdrop of
reducing interest rates.
Economic backdrop
Political decisions are influencing
the economic backdrop.
The US Government’s tariff
announcement in April
caused significant disruption
in financial markets and
downgrades to economic
growth forecasts globally. The
situation remains fluid, with
the 90-day implementation
delay and the more recent
announcement of a temporary
tariff reduction between the
US and China resulting in an
equity market recovery.
For the UK, exports to the US
account for a relatively small
percentage of overall Gross
Domestic Product (GDP).
Certain industries are likely to
face direct challenges, while
indirect effects may arise from
weakened global demand and
heightened trade uncertainty.
The consistent increases in the
household savings ratio since
September 2022 reflect the
impact of underlying economic
uncertainty felt by consumers.
Recent retail sales data has been
more positive than expected,
although thought to be
attributable to unseasonably
good weather. The April GFK
Consumer Confidence Barometer
recorded declines across all
measures compared to the
previous month, indicating that
this level of consumer spending
growth may not last. However,
in real terms, wages continue to
show a steady increase; for the
three months to February, regular
and total pay grew by 1.9%.
Whilst the situation with US tariffs
continues to evolve, the outcome
could have a disinflationary effect
on the UK, potentially prompting
a faster reduction in the base rate
than anticipated. Furthermore,
unlike other recent market
shocks, the tariffs are a voluntary
measure and could be reversed as
quickly as they were announced.
With inflation no longer a
pressing concern, the Bank
of England’s decision to lower
interest rates now depends more
on economic growth forecasts
and labour market data.
The UK’s high level of market
transparency, coupled with
comparative stability, low inflation
and interest rates, continues to
make it an attractive market for
global investors, and well placed
to capitalise on any positive
momentum during a recovery
in commercial property pricing.
On a relatively positive note, if
the tariffs are enforced following
the 90-day delay, the 10% rate on
most UK goods is comparatively
lower than what has been
suggested for many other nations.
In 2024 UK GDP is estimated
to have grown by 1.1%, placing
the UK third in the ranking of
G7 economies. This compares
to the 0.4% recorded for 2023.
With mounting concerns over US
tariffs, public borrowing and fiscal
rules, in the Spring both the Office
for Budget Responsibility and
the Bank of England halved their
GDP growth forecasts for 2025.
Since August 2024, inflation has
remained close to the Bank of
England’s 2% target, with the
annual Consumer Prices Index
(CPI) standing at 2.6% in March
2025. The Bank of England
began its rate-cutting cycle in
August, implementing four 25
basis point reductions, which
have brought the base rate down
to 4.25%. The five-year SONIA
swap rate has decreased to 3.8%,
compared to around 4% a year
ago. In January, concerns over
public finances and the UK’s
economic trajectory led to a
sharp rise in the ten-year gilt yield,
which surged to a post-Global
Financial Crisis high of 4.9%. It has
since fallen slightly, but remains
above the ten-year average.
Businesses are contending
with uncertainty as well as
escalating costs, as the tax
increases announced in the
October budget took effect
in April, potentially impacting
expansion and hiring decisions.
Recent data from the Office for
National Statistics recorded a
further softening in employment;
in March payrolled employees
decreased by 78,000 (0.3%) on
the month to 30.3 million. The
number of job vacancies fell
for the thirty-third consecutive
quarter to 781,000. The
unemployment rate is now 4.4%,
in line with the ten-year average.
Read more in Market
Drivers on pages 26 to 27
Market drivers
Geopolitical
drivers
Economic
drivers
Property
drivers
ESG
drivers
Technology
drivers
Picton Property Income Limited
Annual Report 2025
24
All Retail Office Industrial
Mar
2016
Mar
2017
Mar
2018
Mar
2019
Mar
2020
Mar
2021
Mar
2022
Mar
2023
Mar
2024
Mar
2025
40
30
20
10
0
-30
-20
-10
All Retail Office Industrial
Mar
2016
Mar
2017
Mar
2018
Mar
2019
Mar
2020
Mar
2021
Mar
2022
Mar
2023
Mar
2024
Mar
2025
0
-15
-10
-5
5
10
15
UK Property Market
For the year ending March
2025, the MSCI UK Quarterly
Property Index recorded an All
Property total return of 6.3%,
driven by 1.5% capital growth
and a 4.8% income return. This
marks a notable recovery from
the -1.0% total return reported
for the year to March 2024.
Looking at the three main sectors,
retail and industrial outperformed,
achieving total returns of 9.4%
and 9.3%, respectively. Meanwhile
the office sector lagged,
delivering a total return of 1.5%.
MSCI reported four consecutive
quarters of capital growth at an
All Property level to March 2025.
Both the industrial and retail
sectors experienced quarter-
on-quarter capital growth,
whilst capital values in the office
sector continued to decline.
As of March 2025, the MSCI All
Property equivalent yield was
6.6%, in line with March 2024.
The occupier market has
remained resilient, with a flight
to quality driving consistent
quarter-on-quarter rental growth
across all three main sectors. All
Property ERV growth reached
4.0% for the year to March 2025,
up from 3.7% in the previous year.
In terms of investment
transaction volumes, MSCI
reported £49.9 billion in total
purchases for the year, reflecting
a 15% increase compared to the
prior year, however this is still
below the long-term average.
Of the total capital invested, 22%
was allocated to the industrial
sector, 20% to offices, and 18%
to retail, while the remaining
40% was directed toward
alternative property sectors.
The All Property averages mask
nuances at sector and sub-
sector levels; further details for
the three main sectors are set
out in the table on the right.
12 months to March 2025 All Property Industrial Office Retail
Total return 6.3% 9.3% 1.5% 9.4%
Income return 4.8% 4.4% 4.1% 6.0%
Capital growth 1.5% 4.7% -2.5% 3.3%
Number of positive
segments 16 5 1 10
Number of negative
segments 8 0 6 2
ERV growth 4.0% 5.8% 3.1% 2.8%
Number of positive
segments 21 5 7 9
Number of negative
segments 3 0 0 3
Source: MSCI UK Quarterly Property Index
1.5%
Annual capital
growth
4%
ERV growth
15%
Increased
investment activity
MSCI UK Quarterly Property Index
Annual Capital Growth (%)
MSCI UK Quarterly Property Index
Annual Estimated Rental Value Growth (%)
Picton Property Income Limited
Annual Report 2025
25
Strategic
Report Governance
Financial
Statements
Additional
Information
Market Drivers
Geopolitical drivers:
– Uncertainty
– Conflict
– Tarif fs
– Fiscal policy
Impact on investment markets
Geopolitical uncertainty can
disrupt investment markets,
but the UK remains globally
appealing due to its transparency,
governance and stability.
Impact on occupational markets
Geopolitical tension and an
increase in trade tariffs could
disrupt supply chains and
raise occupiers’ costs.
Fiscal policy affects business
expenses and consumer
spending, influencing occupier
priorities like efficiency,
headcount and other overheads.
Our strategic response
We have an agile and flexible
business model therefore
can adapt and respond
to market trends.
Economic drivers:
– GDP growth
– Inflation
– Interest rates
– Business and consumer
confidence
Impact on investment markets
Stable inflation and declining
interest rates, which reduce the
cost of debt, benefit investors.
Falling Government bond yields
widen the risk-free rate gap,
making property investment
more attractive. However, periods
of lacklustre economic growth are
linked to declining employment,
weaker business sentiment, and
reduced consumer spending.
Impact on occupational markets
Economic conditions shape
occupiers’ business confidence,
expansion plans and space
requirements. Property sectors
respond differently; retailers
depend more on consumer
confidence, while industrial
occupiers may have a stronger
alignment with trade volumes.
Our strategic response
We have an appropriate capital
structure for the market cycle and
have maintained our defensive
position, with a conservative loan
to value of 24% and additional
operational flexibility through our
undrawn revolving credit facility.
We have a diverse income
base that has proven to be
very resilient, operating within
a wide variety of business
segments. Our occupier focused,
opportunity led approach
enables us to create spaces to
help our occupiers succeed.
Proactive asset management
drives performance through
enhancing asset quality,
attracting and retaining occupiers,
minimising the cost of vacancy
and maximising efficiency.
Property drivers:
– Diversification
– Sector performance
– Asset selection
– Construction costs
– Investor and occupier demand,
supply and rents
Impact on investment markets
The commercial property
market is cyclical, shaped by
supply-demand dynamics and
economic conditions. Property
sectors react differently and
can be at alternative points in
the cycle. Diversified investing
can reduce risk for investors.
Currently, industrial property
generally offers a more defensive
lower yield, while offices provide
higher yields but often higher
capital expenditure requirements.
Rising construction costs have
reduced development across all
sectors, driving supply constraints
and underpinning rental growth.
Impact on occupational markets
Structural drivers affect property
sectors differently. Online
retailing has boosted industrial
demand at the expense of in-
store retail. Post-pandemic, the
acceleration in remote working
reshaped the office market,
however limited development
has created competition for
prime, ESG-compliant spaces.
Our strategic response
Our in-depth understanding
of the UK commercial
property market enables
us to identify and source
value across different sectors
and reposition the portfolio
through the property cycle.
Through maintaining a diversified
portfolio, we dilute cyclical risks
associated with a single sector.
Dynamics that cause a downturn
or disproportionate shock in one
sector have a reduced impact
on overall performance.
4.25%
Bank of England
base rate vs 5.25%
March 2024
2.6%
Annual CPI inflation
vs 3.2% March 2024
1.1%
Annual UK GDP
growth vs 0.4%
December 2023
Read more in our
Portfolio Review
on pages 28 to 41
Picton Property Income Limited
Annual Report 2025
26
We have retained our overweight
position in the better performing
industrial sector and disposed
of selected buildings within
our office portfolio. Our higher
yielding retail portfolio provides a
strong income return for investors.
We are investing in our assets in
line with our strategic priorities.
ESG drivers:
– Climate change
– Asset resilience
– Net zero transition
– Biodiversity
– Social impact
– Governance
Impact on investment markets
ESG plays an increasingly vital
role in investment pricing and
decision making.
Decarbonised, energy-efficient
assets with high EPC ratings
command a premium, while
assets that are not net zero
aligned risk becoming stranded.
Property owners must balance
diverse stakeholder demands,
including those of local
communities and natural capital.
Impact on occupational markets
Occupiers have various motives
for engaging with ESG, including
their own commitments and
ambitions. Ultimately, being
more sustainable can increase
profitability. Achieving more whilst
using fewer resources cuts costs,
and occupying a sustainable
building aligns with this goal.
From a social perspective,
buildings containing health
and wellness facilities, green
spaces, biophilic design
and other amenities can
improve occupiers’ employee
satisfaction and retention.
Read more in Sustainable
Thinking on pages 62 to 83
Our strategic response
We are committed to integrating
sustainability within our
business activities, and in a
way that makes a positive
contribution to society, whilst
minimising any negative impact
on people, local communities,
and the environment.
We are focused on our net
zero goal and are investing in
decarbonising the portfolio
in line with our sustainable
refurbishment guidelines.
Technology drivers:
– Artificial Intelligence
– PropTech
– Big Data
Impact on investment markets
Technological change, including
AI, Machine Learning, Big Data,
and digitalisation, are reshaping
capital markets. AI and Big Data
provide investment advantages
but pose risks such as cyber
insecurity and job losses.
Assets with integrated technology
and suitable infrastructure are
more investable than those
reliant on outdated systems.
Impact on occupational markets
Technological advances reshape
employment trends and
require evolving workspaces.
Technology-enabled buildings
with automation and grid
capacity attract occupiers and
command rent premiums.
Sector-specific needs include
supply chain optimisation,
electric vehicle fleet capacity,
and data centre capabilities.
Our strategic response
Our diversified approach
enables us to adapt to change
driven by technological drivers.
Investing where there is
downside protection against
obsolescence forms part of
our investment process.
We are committed to maintaining
an efficient operating platform
and continue to investigate
and invest in PropTech
solutions where appropriate.
Wherever possible, we use
data to measure, manage and
drive progress on our strategy,
including our sustainability goals.
Read more in Principal
Risks on pages 49 to 53
Picton Property Income Limited
Annual Report 2025
27
Strategic
Report Governance
Financial
Statements
Additional
Information
Portfolio Review
Our property portfolio consists
of 47 assets. Our diverse exposure
provides flexibility to adapt as
market conditions dictate.
Property Se cto r
Properties valued between
£10 million and £20 million
The Business Centre, Wokingham
Colchester Business Park, Colchester
B&Q, Queens Road, Sheffield
Madleaze Trading Estate, Gloucester
180 West George Street, Glasgow
Parc Tawe North Retail Park, Swansea
Nonsuch Industrial Estate, Epsom
Gloucester Retail Park, Gloucester
Vigo 250, Birtley Road, Washington
30 & 50 Pembroke Court, Chatham
Mill Place Trading Estate, Gloucester
Easter Court, Warrington
Metro, Manchester
Units 1 & 2, Kettlestring Lane, York
Swiftbox, Haynes Way, Rugby
Properties valued between £5 million
and £10 million
401 Grafton Gate, Milton Keynes
Units 1 & 2, Downmill Road, Bracknell
Angouleme Retail Park, Manchester
Queen’s House, Glasgow
Regency Wharf, Birmingham
Thistle Express, Luton
109–117 High Street, Cheltenham
Abbey Business Park, Belfast
Properties valued under £5 million
Crown & Mitre Complex, Carlisle
Trident House, St Albans
Atlas House, Marlow
Sentinel House, Fleet
Scots Corner, Birmingham
Kingstreet Lane, Winnersh
Waterside House, Leeds
78–80 Briggate, Leeds
53–57 Broadmead, Bristol
17–19 Fishergate, Preston
7–9 Warren Street, Stockport
Oxford Lane, Cardiff
6–12 Parliament Row, Hanley
72–78 Murraygate, Dundee
Geographical weighting
25–50%
10–25%
0–10%
Portfolio composition
Industrial 64%
Office 24%
Retail & Leisure 12%
Picton Property Income Limited
Annual Report 2025
28
Our top ten properties valued in excess of £20 million
01.
Parkbury Industrial
Estate, Radlett
Approx area (sq ft) / 341,000
Capital value (£m) / >100
Occupancy rate (%) / 98
EPC rating / A–D
02.
River Way Industrial
Estate, Harlow
Approx area (sq ft) / 454,800
Capital value (£m) / 50–75
Occupancy rate (%) / 100
EPC rating / A–D
03.
Stanford Building,
London WC2
Approx area (sq ft) / 20,100
Capital value (£m) / 30–50
Occupancy rate (%) / 97
EPC rating / B
04.
Datapoint, Cody Road,
London E16
Approx area (sq ft) / 55,100
Capital value (£m) / 30–50
Occupancy rate (%) / 100
EPC rating / B–C
05.
Lyon Business Park,
Barking
Approx area (sq ft) / 99,400
Capital value (£m) / 20–30
Occupancy rate (%) / 100
EPC rating / B–D
06.
Shipton Way,
Rushden
Approx area (sq ft) / 312,900
Capital value (£m) / 20–30
Occupancy rate (%) / 100
EPC rating / C
07.
Sundon Business
Park, Luton
Approx area (sq ft) / 127,800
Capital value (£m) / 20–30
Occupancy rate (%) / 100
EPC rating / A–D
08.
50 Farringdon Road,
London EC1
Approx area (sq ft) / 31,300
Capital value (£m) / 20–30
Occupancy rate (%) / 100
EPC rating / B
09.
Tower Wharf, Cheese
Lane, Bristol
Approx area (sq ft) / 70,200
Capital value (£m) / 20–30
Occupancy rate (%) / 88
EPC rating / B–C
10.
Trent Road,
Grantham
Approx area (sq ft) / 336,100
Capital value (£m) / 20–30
Occupancy rate (%) / 100
EPC rating / C
Picton Property Income Limited
Annual Report 2025
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Strategic
Report Governance
Financial
Statements
Additional
Information
Portfolio Review continued
Proactive asset
management
This year we have reduced office exposure,
and improved portfolio occupancy, income
and rental values.
Top ten occupiers
The largest occupiers, based on a percentage of contracted
rent, as at 31 March 2025, are as follows:
Occupier
Contracted rent
(£m) %
Public sector 1.8 3.8
Whistl UK Limited 1.6 3.4
The Random House Group Limited 1.6 3.4
B&Q Limited 1.2 2.6
Snorkel Europe Limited 1.2 2.4
XMA Limited 1.0 2.0
Portal Chatham LLP 0.9 1.8
Orlight Limited 0.8 1.7
DHL Supply Chain Limited 0.8 1.6
Blanco UK Limited 0.8 1.6
Total 11.7 24.3
Longevity of income
As at 31 March 2025, expressed as a percentage of
contracted rent, the average length of leases to first
termination was 4.9 years (2024: 4.2 years). This is
summarised as follows:
%
0 to 1 year 20.8
1 to 2 years 14.4
2 to 3 years 8.1
3 to 4 years 9.4
4 to 5 years 12.4
5 to 10 years 24.6
10 to 15 years 9.1
15 years or more 1.2
Total 100
Although we have increased income longevity in the year,
there are a number of lease events in the short term which
are a focus for the team. We will be working to ensure the
void risk is mitigated and the reversion captured.
Occupier activity was somewhat
subdued reflecting the
Budget and other political
events. Despite this, we saw
rental growth assisted by low
levels of supply in many sub-
markets. We expect these
trends to continue into 2025.
Occupational demand is stable in
the industrial sector, supported
by a lack of supply in the multi-
let market in particular.
The office sector remains in
transition though the severe
lack of supply of prime space
has led to strong rental growth
for the best buildings and
locations. Poorer quality buildings
continue to suffer from weak
occupier demand and may
lead to further supply being
repositioned for alternative uses.
In the retail sector there is
competition for space leading to
rental growth for prime locations.
We successfully repositioned
office assets at Angel Gate,
London, (residential via permitted
development rights), Charlotte
Terrace, London, (residential)
and Longcross, Cardiff (student
accommodation) and have
completed the disposal of all
three assets during the period for
a combined £51 million, 5% ahead
of the 31 March 2024 valuation.
Our portfolio value has increased
on a like-for-like basis and we
have disposed of our three largest
void assets at pricing ahead of
the March 2024 valuation. We
have used proceeds in part to
invest back into the portfolio to
upgrade assets. This ongoing
programme has enabled income
and capital accretive lease
transactions, and improved the
overall quality of our portfolio.
The portfolio valuation as
at 31 March 2025 was £723.1
million, a like-for-like portfolio
valuation increase of 3.8% or
2.1% after capital expenditure.
At the year end, the contracted
rent, which is the rent receivable
after the expiry of lease incentives
increased by £1.4 million or 3%
on a like-for-like basis, to £48.2
million. The passing rent was
£42.3 million, a decrease of £0.7
million or 1.6% on a like-for-like
basis, reflecting lease incentives.
The March 2025 ERV of the
portfolio was £55.6 million,
a 4% like-for-like increase on
the prior year. We had ERV
growth of 3% in the industrial
sector proven by new lettings
and active management.
The office sector was up 4%
driven by our central London
holdings and our asset upgrade
programme. The retail and
leisure sector increased by 5%.
Picton Property Income Limited
Annual Report 2025
30
South East 45%
Rest of UK 19%
Industrial weighting
64%
Retail Warehouse 8%
High Street Rest of UK 2%
Leisure 2%
Retail and Leisure weighting
12%
Rest of UK 9%
Central London 8%
South East 7%
Office weighting
24%
Picton Property Income Limited
Annual Report 2025
31
Strategic
Report Governance
Financial
Statements
Additional
Information
Portfolio Review continued
Portfolio summary
FY 2025 FY 2024
Like-for-like
% change
Assets 47 49
Occupancy 94% 91%
Valuation £723.1m £744.6m 3.8%
Disposal proceeds £51.0m
Acquisition £0.5m
Capital expenditure £11.8m £4.5m
Equivalent yield 6.8% 6.8%
Passing rent £42.3m £44.7m -1.6%
Contracted rent £48.2m £48.7m 3.0%
ERV £55.6m £57.6m 3.8%
Performance
For the year to March 2025, we
produced a total property return
of 7.3%, outperforming the MSCI
UK Quarterly Property Index
which recorded a total return
of 6.3%. This outperformance
was driven by both income
return and capital growth.
Our portfolio income return
was 5.2%, outperforming
MSCI’s income return of 4.8%.
Capital growth was 2.1%,
compared to MSCI at 1.5%.
We have now outperformed the
benchmark for 12 consecutive
years and delivered upper quartile
performance since launch,
ranked 8 out of 72 portfolios.
Occupancy
Occupancy has increased from
91%, rising to 94%. This compares
to the MSCI UK Quarterly Property
Index of 91%, as at 31 March 2025.
The total void ERV is £3.4 million.
The majority of our void is in
the office sector, comprising
void ERV of £2.6 million, or 76%
of the total void. Our offices
have an occupancy rate of
86%. Our industrial and retail
assets have occupancy rates
of 99% and 94%, respectively.
Portfolio activity
We continue to actively manage
the portfolio completing over 78
asset management transactions,
increasing both contracted rent
and estimated rental value (ERV).
– 25 lettings or agreements to
lease, securing additional rent
of £2.9 million, 7% ahead of ERV
– 36 lease renewals or regears,
securing £6.6 million per
annum, an uplift of £0.8 million,
10% ahead of ERV
– 13 rent reviews, securing an
uplift of £0.4 million per annum,
7% ahead of ERV
– Four lease variations to remove
occupier break options,
securing £0.6 million per
annum
Picton Property Income Limited
Annual Report 2025
32
Retention
Over the year to March 2025,
total ERV at risk, due to lease
expiries or break options,
totalled £6.4 million. This
excludes office buildings which
were sold during the year.
We retained 66% of total ERV
at risk. Of the ERV that was
not retained, a further 18% or
£1.1 million was re-let to new
occupiers during the year,
therefore a positive outcome
was achieved on 84% of
the ERV that was at risk.
In addition, a further £5.4 million
of ERV, which expired in more
than 12 months time, was retained
by either removing future break
options, extending leases, or
agreeing back-to-back surrenders
and re-letting transactions
ahead of lease events.
Investment activity
Investment market activity
remained below the long run
average over the year, with the
anticipated rebound post the
general election evaporating amid
concerns over the economy. This
limited activity to prime assets
and value add opportunities.
Over the year, three assets
were sold for a combined
£51 million, and one tactical
acquisition of a trade counter
unit, adjoining an existing asset,
was made for £0.5 million.
Portfolio key asset management activity
Transactions
Lettings
(New rent vs March 2024 ERV)
7%
Break removals
(New rent vs previous rent)
13%
Renewals/Regears
(New rent vs previous rent)
14%
Rent reviews
(New rent vs previous rent)
26%
Lettings 25
Renewals/regears 36
Break removals 4
Rent reviews 13
78
New rent £2.9m
March 2024 ERV
£2.7m
New rent
Previous rent £0.5m
£0.6m
New rent
Previous rent £5.8m
£6.6m
New rent
Previous rent £1.5m
£1.8m
10% ahead of March 2024 ERV
19% ahead of March 2024 ERV
7% ahead of March 2024 ERV
Picton Property Income Limited
Annual Report 2025
33
Strategic
Report Governance
Financial
Statements
Additional
Information
Asset upgrades
This year, we have invested
significantly to upgrade the
overall quality of the portfolio.
We have utilised proceeds from
some of our asset disposals to
invest back into the portfolio
to upgrade assets to enhance
rents and value, improving their
appeal to occupiers, in terms
of quality of accommodation,
energy efficiency measures
and occupier amenities.
The majority of these projects
have been linked to lease
events to maximise prospects
for occupier retention or
reletting as a result of the
investment programme.
Over the year, we have invested
£11.8 million into the portfolio
across more than 20 projects,
with the top six projects
accounting for 68% of the spend.
All the works undertaken are
in line with our sustainable
refurbishment guidelines,
which follow industry best
practice. Where appropriate,
we remove gas from buildings,
install solar panels and upgrade
insulation, in line with our
net zero carbon pathway.
This has resulted in an
improvement in our EPC ratings
with 83% of our properties
(by rental value) now rated
C and above, an increase
of 3% on the prior year.
1. At Grafton Gate, Milton Keynes
we are replacing the original
gas fired air conditioning
system with a new fully electric
system for the whole office. In
conjunction with the solar
panels previously installed the
building’s EPC will improve to
an A rating. As a result of the
works we have renewed two
leases securing annual rent of
£0.8 million, which represents
an uplift of 23% on the previous
passing rent and 33% ahead of
the pre-upgraded ERV.
2. At Atlas House, Marlow we have
replaced the air conditioning in
the building and now have a
fully electric system with
additional rooftop solar panels.
As part of the refurbishment we
have also added an occupier
business lounge and installed
new LED lighting. The entire
office now has an EPC A rating.
As a result of the upgrade we
secured a lease renewal at £0.1
million per annum, which
represents an uplift of 42% on
the previous passing rent but
6% below ERV, due to a lower
refurbishment specification.
3. At Madleaze Trading Estate in
Gloucester, we are replacing the
roofs on a number of units
comprising approximately 25%
of the total estate. These works
were part of asset management
transactions agreed last year
and as a result, we have
regeared a lease and let an
additional unit to an existing
occupier at £0.5 million per
annum, 22% ahead of ERV.
4. At Colchester Business Park,
we have completed the first
phase of the refurbishment of
the largest office building on
the business park and have
replaced the original air
conditioning system which
utilises gas, with a new
all-electric system. To reduce
our embodied carbon
emissions we have re-used
equipment from our Bristol
and Cardiff buildings. As part of
the building upgrade we have
also delivered market-leading
occupier amenities by creating
an occupier business lounge
and end of trip facilities.
5. At 50 Pembroke Court,
Chatham we have replaced the
air conditioning system which
utilises gas, with a new electric
system and have installed
rooftop solar panels. The
building EPC will achieve an
A rating when reassessed.
6. At Tower Wharf, Bristol we have
commenced the replacement
of the gas powered air
conditioning with a new
electric system. To reduce our
embodied carbon emissions,
as part of the refurbishment of
the first and third floors we
have reused equipment and
furniture from our Cardiff
building and the previous
occupier of the third floor. The
EPC of the refurbished floor
has a B rating. On completion
of the air conditioning works,
the entire office will have an
A rating.
Portfolio Review continued
Read more in
Strategy in Action
on pages 14 to 15
Net Zero Progress
on pages 70 to 71
£11.8m
Total invested
20+
Projects
83%
EPC ratings A-C,
improved from 80%
in 2024
Picton Property Income Limited
Annual Report 2025
34
Summary and outlook
Despite this challenging macro-
environment, the UK commercial
property market has proven to
be remarkably resilient and we
have seen positive valuation
movement over the year as the
strength in occupational markets
has helped grow our income
and parts of the market have
seen greater pricing tension.
With the interest rate cycle
having peaked, we expect
market liquidity to improve and
transaction activity to increase as
the year progresses. There may be
a short-term softening of rental
growth as businesses adopt a
more cautious approach, but this
is set against a backdrop of tight
supply generally and particularly
for better quality assets.
Demand at our industrial
assets has been resilient, in
particular at our multi-let estates
where we have continued to
capture reversionary potential
at lease events and have seen
further rental growth over
the period. Our distribution
portfolio remains fully let with
reversionary potential, although
an element of this reversion will
be captured through lease expiry
and reletting, which may have
a short-term income impact.
With regard to office assets, we
have successfully progressed
our alternative use strategy
by disposing of three assets at
accretive pricing over the year and
continue to monitor the office
portfolio for enhanced returns
via change of use. We have also
leveraged our portfolio investment
programme to secure income-
accretive new lease commitments
with existing occupiers. We will
continue our selective office
asset disposal programme.
Occupier demand will continue
to focus on well-located
office buildings with good
fundamentals, including strong
environmental credentials
and occupier amenities.
The retail portfolio has seen
rental growth and capital value
appreciation over the year. The
occupier market for well-located
high street and retail warehouse
is robust, having seen many
years of downwards repricing.
The high take-up of stores
released by insolvent operators
such as Wilko and Homebase
demonstrates some of the risks
and opportunities in this sector.
The portfolio remains well placed
and overall of a high quality,
enabling us to maintain and
enhance income through our
occupier focused approach.
As at 31 March 2025 there is
£7.5 million of reversion in the
portfolio. Approximately £4.1
million is where contracted rent
is below ERV and £3.4 million
is from letting vacant space.
We expect total returns to broadly
converge across the sectors
following a period of significant
repricing of office assets in
particular. We believe performance
will be location and asset specific
and the need to be able to
proactively manage assets will
become increasingly important
to total return performance.
We remain focused on growing
income and creating value. The
portfolio has been upper quartile
versus the MSCI UK Quarterly
Property Index on a total return
basis since launch and has had
an income return ahead of
the benchmark every year.
We still have significant reversion
to capture through both leasing
of void space and as rents are
reset to market levels at review
or lease expiry. Our proactive
approach to asset management
will unlock further value
through asset repositioning
and lease restructuring.
Jay Cable
Head of Asset Management
21 May 2025
Picton Property Income Limited
Annual Report 2025
35
Strategic
Report Governance
Financial
Statements
Additional
Information
Portfolio Review continued
Market backdrop
The industrial, warehouse
and logistics sector has been
robust throughout the year.
The investment market has
seen stable yields, with some
yield compression for the best
multi-let locations with short-
term reversionary potential.
Capital growth has been driven
broadly by movements in
income. Rents have continued
to move upwards against a
backdrop of limited supply.
In certain markets, there is a
little more supply than there has
been historically, but similarly
speculative development is
now more constrained, which is
likely to reduce future pipeline.
Portfolio activity
Our industrial assets increased
in value by 5% over the year, from
£439.9 million to £463.2 million.
The contracted rent increased
by 8% from £23.6 million to
£25.7 million and the ERV
Industrial snapshot:
FY 2025 FY 2024
Like-for-like
% change
Assets 19 18
Occupancy 99% 98%
Valuation £463.2m £439.9m 5.0%
Acquisition £0.5m
Capital expenditure £3.0m £2.4m
Equivalent yield 5.6% 5.7%
Passing rent £22.6m £22.3m 0.7%
Contracted rent £25.7m £23.6m 8.1%
ERV £29.5m £28.5m 3.1%
Industrial
During the year we have continued
to unlock reversionary potential, increasing
the contracted rent. High occupancy and
active management have supported rental
growth and further valuation gains.
Picton Property Income Limited
Annual Report 2025
36
New rent
March 2024 ERV
£1.7m
£1.6m
New rent
Previous rent
£4.5m
£3.8m
New rent
Previous rent
£0.3m
£0.2m
New rent
Previous rent
£0.9m
£0.7m
grew by 3% from £28.5 million
to £29.5 million. Occupancy
increased from 98% to 99%.
The majority of our industrial
assets are multi-let, comprising
54% of our total portfolio by
value, with the majority located
in the South East. At present
we only have four vacant
units, with one under offer
and one currently undergoing
refurbishment. Our UK-wide
distribution warehouse assets
comprise 10% of the total portfolio
by value and are fully leased.
The industrial portfolio
currently has £3.8 million of
reversionary income potential
between contracted rent and
ERV, with only £0.4 million
relating to the void units.
Over the year we completed £7.4
million of lease transactions at
an average of 6% ahead of the
March 2024 ERV. Of these £1.7
million were new lettings, 8%
ahead of ERV, £4.5 million were
lease renewals or regears, 7%
ahead of ERV and 19% ahead
of the previous rents, and £0.9
million of rent reviews securing
a rental uplift of £0.3 million, 2%
ahead of ERV and 38% ahead of
the previous rent. In addition, we
removed a break option securing
£0.3 million, 18% ahead of ERV.
Key transactions in the
year included:
– Grantham – lease regear
securing an increased term
certain of 13 years at a rent of
£1.6 million per annum, 8%
ahead of ERV
– London, Datapoint – lease
renewal securing £0.7 million
per annum, 47% ahead of the
previous passing rent and 12%
ahead of ERV
– Harlow – surrendered a lease
and simultaneously re-let the
unit for £0.6 million per annum,
53% ahead of the passing rent
and 5% ahead of ERV
Additionally, we completed
lettings in Bracknell, Gloucester,
London, Luton and Warrington for
a combined £1.2 million per
annum, 10% ahead of ERV.
Transactions
Lettings 12
Renewals/regears 24
Break removals 1
Rent reviews 8
Lettings
(New rent vs March 2024 ERV)
8%
Break removals
(New rent vs previous rent)
28%
18% ahead of March 2024 ERV
Rent reviews
(New rent vs previous rent)
38%
2% ahead of March 2024 ERV
Renewals/regears
(New rent vs previous rent)
19%
7% ahead of March 2024 ERV
45
Additional
Information
Financial
StatementsGovernance
Strategic
Report
37
Picton Property Income Limited
Annual Report 2025
Portfolio Review continued
Market backdrop
The office sector has been
subdued this year with
reduced investor demand
and elevated vacancy rates.
Occupational demand continues
to favour high quality buildings
with good environmental
credentials and occupier
amenities. We are seeing a rental
premium for this type of space
but conversely occupational
and investor demand outside
of this is limited. This has
led to a general downward
repricing, particularly once costs
associated with asset upgrading
are factored into appraisals.
Alternative use strategies are a
way of finding liquidity without
significant capital investment.
Asset selection is key, as each
building must be viewed
independently, in respect of
its location and dynamics,
sustainability credentials,
flexibility of floorplates and
occupier amenities.
Office snapshot:
FY 2025 FY 2024
Like-for-like
% change
Assets 14 17
Occupancy 86% 80%
Valuation £175.3m £224.9m -0.4%
Disposal proceeds £51.0m
Capital expenditure £8.1m £1.9m
Equivalent yield 8.2% 7.8%
Passing rent £14.0m £14.5m 10.3%
Contracted rent £14.9m £16.9m 0.6%
ERV £18.7m £22.0m 4.3%
Office
We have improved occupancy in the year,
and completed accretive disposals for higher
value alternative uses. We continue to invest
significantly into the portfolio by upgrading
assets, which has led to rental growth, leasing
activity and occupier retention.
Picton Property Income Limited
Annual Report 2025
38
New rent
March 2024 ERV
£0.8m
£0.7m
New rent
Previous rent
£0.7m
£0.5m
New rent
Previous rent
£0.1m
£0.1m
Portfolio activity
During the year we completed
the disposal of three office assets
that we had repositioned for
alternative uses, 5% ahead of
the March 2024 valuation. This
reduced our office exposure
by 20%. The passing rent on
our retained office assets
increased by 10% to £14 million,
the contracted rent increased
by 1% to £14.9 million and the
ERV grew by 4% to £18.7 million.
The value of the retained office
assets has decreased on a like-
for-like basis by 0.4% over the
year to £175.3 million, with our
asset upgrades mitigating a
larger impact. Occupancy has
increased from 80% to 86%.
Our regional office assets
comprise 16% of the portfolio by
value and have a reversionary
yield in excess of 10%. Our
central London offices comprise
8% of the portfolio by value,
are fully leased and offer
alternative use opportunities.
The office portfolio currently
has £3.8 million of reversionary
income potential between
contracted rent and ERV,
with a further £2.6 million
relating to the void units.
Over the year we completed
£1.5 million of lease transactions
at an average 15% ahead of the
March 2024 ERV. Of these, £0.8
million were new lettings, 10%
ahead of ERV and £0.7 million
were lease renewals or regears,
22% ahead of ERV and 26%
ahead of the previous rent.
We have invested to improve the
quality of our office portfolio to
assist with future lettings and
occupier retention. This has also
helped to improve overall office
ERVs as the space is upgraded.
We have now removed gas
from 43% of our office portfolio
by value, with a further 26%
currently planned. We have
completed £1 million per annum
of leasing transactions as a
direct result of the upgrades,
17% ahead of March 2024 ERV.
Key transactions in the
year included:
– Bristol – upsized an occupier
into new space at £0.5 million
per annum, 5% ahead of ERV
– Marlow – lease renewal securing
£0.1 million per annum, 42%
ahead of the previous passing
rent and 6% below ERV
– Milton Keynes – agreed two
lease renewals securing a
combined £0.8 million per
annum, 23% ahead of the
previous passing rent and 33%
ahead of ERV
2% ahead of March 2024 ERV
Transactions
Lettings 11
Renewals/regears 7
Rent reviews 2
20
Lettings
(New rent vs March 2024 ERV)
10%
Rent reviews
(New rent vs previous rent)
14%
22% ahead of March 2024 ERV
Renewals/regears
(New rent vs previous rent)
26%
Picton Property Income Limited
Annual Report 2025
39
Strategic
Report Governance
Financial
Statements
Additional
Information
Portfolio Review continued
Market backdrop
The retail and leisure sector
has been resilient, having
seen considerable repricing
in prior years. Values have
moved upwards and the sector
benefits from a relatively
high income component.
With elevated interest rates,
cost of living concerns and
the impact of the October
Budget on their cost base,
there remain headwinds for
operators in the sector. We are
also seeing demand from leisure
operators for both high street
and retails warehouse units.
The significant reduction in
rents in prior years provides a
relatively low base and for the
right quality assets we are seeing
tentative signs of rental growth. In
a number of instances occupier
defaults have led to relatively
swift re-leasing at similar rents. It
is likely that rents set before 2020
are still above market levels, albeit
rents agreed after this time are
starting to have upside potential.
Retail and leisure snapshot:
FY 2025 FY 2024
Like-for-like
% change
Assets 14 14
Occupancy 94% 98%
Valuation £84.6m £79.8m 6.0%
Capital expenditure £0.7m £0.2m
Equivalent yield 7.9% 8.3%
Passing rent £5.7m £7.9m -27.5%
Contracted rent £7.6m £8.2m -7.3%
ERV £7.4m £ 7.1m 5.4%
Retail and leisure
We have seen strong valuation gains from
our retail assets, driven by asset management
improving the income profile. Whilst we are
starting to see rental growth, new rents are
often below pre-pandemic levels.
Picton Property Income Limited
Annual Report 2025
40
New rent
March 2024 ERV
£0.4m
£0.4m
New rent
Previous rent
£1.5m
£1.5m
New rent
Previous rent
£0.3m
£0.3m
New rent
Previous rent
£0.9m
£0.8m
We continue to see opportunities
in the sector for certain retail
warehouse and prime high street
locations, but asset selection is key.
Portfolio activity
Our retail assets increased in
value by 6% over the year from
£79.8 million to £84.6 million. The
contracted rent reduced by 7.3%
from £8.2 million to £7.6 million
as we re-let space following the
expiry of over-rented leases.
The ERV grew by 5.4% from £7.1
million to £7.4 million. Occupancy
decreased from 98% to 94%.
Our retail assets are predominantly
retail warehouse, underpinned by
value-led retailers and make up 8%
of the total portfolio. They consist
of 19 units across four parks with
one vacant unit in Swansea. Our
high yielding high street portfolio
makes up 2% of the total portfolio,
with only £0.2 million of vacancy.
Over the year we completed
£2.9 million of lease transactions
at an average 12% ahead of the
March 2024 ERV. Of these £0.4
million were lettings, 3% below
ERV, £1.5 million were lease
renewals or regears, 15% ahead
of ERV and £0.3 million of break
removals, 21% ahead of ERV.
Key transactions in the
year included:
– Sheffield – regeared the lease
securing ten years term certain
at a rent of £1.2 million per
annum, 14% ahead of ERV
– Gloucester – leased a unit and
regeared a lease, securing ten
years term certain on both units
at a combined £0.4 million per
annum, 9% ahead of ERV
– Swansea – secured a 10% uplift
at an indexed rent review
securing £0.4 million per
annum, 26% ahead of ERV
Transactions
Lettings 2
Renewals/regears 5
Break removals 3
Rent reviews 3
13
Lettings
(New rent vs March 2024 ERV)
-3%
21% above March 2024 ERV
Break Removals
(New rent vs previous rent)
Unchanged
13% ahead of March 2024 ERV
Rent reviews
(New rent vs previous rent)
16%
15% above March 2024 ERV
Renewals/regears
(New rent vs previous rent)
-3%
Additional
Information
Financial
StatementsGovernance
Strategic
Report
41
Picton Property Income Limited
Annual Report 2025
Financial Review
We have prioritised
the divestment of low
income producing office
assets in order to support
earnings growth over the
medium term.
Saira Johnston
Chief Financial Officer
Picton Property Income Limited
Annual Report 2025
42
Portfolio repositioning helps
to deliver earnings growth
and valuation gains.
£37m
Profit after tax
2024: £(5m)
2023: £(90m)
£23m
EPRA earnings
2024: £22m
2023: £21m
4.2p
EPRA earnings per share
2024: 4.0p
2023: 3.9p
3.7p
Dividends per share
2024: 3.5p
2023: 3.5p
113%
Dividend cover
2024: 114%
2023: 112%
24%
Loan to value
2024: 28%
2023: 27%
100p
NAV per share
2024: 96p
2023: 100p
105p
EPRA NDV per share
2024: 101p
2023: 105p
This year we have delivered EPRA earnings
growth and a profit of £37.3 million. This has
been underpinned by positive valuation
movements and by the disposals of three
repositioned office assets, totalling £51
million. These proceeds have been used
to fully repay the floating rate revolving
credit facility, reinvest in the portfolio and
return capital to shareholders through
the share buyback programme.
EPRA earnings, comprising the operating
profit before movement on investments, less
the net interest expense, was £22.8 million,
an increase of 5% during the financial year.
The overall profit for the year includes gains
on disposals of £1.5 million and the positive
valuation movement of £12.9 million.
We have been focused on growing
earnings, whilst delivering an increasing,
covered and sustainable dividend, through
repositioning the portfolio’s sector
allocation alongside continued proactive
and hands-on asset management.
Looking forward, we are committed to
delivering earnings growth over the medium
term. We are continually evaluating lease
events and the optimal approach to deliver
this, accepting some short-term reduction in
income to capture the reversion and create
value across the portfolio.
Net asset value
The Group’s net asset value as at 31 March 2025
was £533.4 million, or 100 pence per share.
This reflected an increase of 4% or 4 pence per
share over the financial year. The analysis of the
net asset value movement is set out below.
£m
March 2024 net asset value 524.5
EPRA earnings 22.8
Gains on disposals 1.5
Valuation movement 12.9
Share-based awards 0.8
Purchase of shares held in trust (1.5)
Share cancellation (7.5)
Dividends paid (20.1)
March 2025 net asset value 533.4
Picton Property Income Limited
Annual Report 2025
43
Strategic
Report Governance
Financial
Statements
Additional
Information
Financial Review continued
The following table reconciles the net asset value calculated in accordance with
International Financial Reporting Standards (IFRS) with that of the European Public
Real Estate Association (EPRA).
2025
£m
2024
£m
2023
£m
Net assets – IFRS and EPRA net tangible asset value 533.4 524.5 547.6
Fair value of debt 26.1 24.7 22.8
EPRA net disposal value 559.5 549.2 570.4
Net asset value per share (pence) 100 96 100
EPRA net tangible asset value per share (pence) 100 96 100
EPRA net disposal value per share (pence) 105 101 105
Income statement
Rental income decreased by £0.4 million
during the financial year to £43.5 million
as a result of the three disposals. These
properties contributed £1.7 million of rental
income in the previous year, compared
to £0.5 million in the current year.
Net rental income, excluding disposals, on a
like-for-like basis, increased by £0.9 million
or 2.4%, which was underpinned by the
increased rents on the industrial assets. The
contribution from the industrial assets was
60% for the year, an increase of 5% which is
a result of the portfolio repositioning during
the year. In particular we saw increases in
industrial rental income in Barking, Bracknell,
Harlow and Warrington where we benefitted
from the full year of rents, following leasing
activity in the previous financial year.
Property expenses also reduced as a result
of lower void costs and general property
operating costs. Property expenses on
assets disposed during the year were £1
million (£1.6 million in the prior year).
Other property income decreased as a
result of lease events during the year.
We have been focused on cost management
recognising that an element of staff costs
are performance related. Administration
costs were lower than the prior year, due to
the exceptional costs incurred in respect of
corporate activity. We have during the year
incurred some non-recurring costs due to
Board transition, totalling £0.3 million.
Our EPRA cost ratio (excluding direct
vacancy costs) has decreased from 23% to
22% during the financial year in part due
to the non-recurring items noted above.
The Group cost ratio has increased from 1.2%
to 1.3%, which is primarily due to the lower
average net asset value over the period.
Net finance costs
Our financing costs decreased from £8.9
million to £7.7 million as a result of repaying
the floating rate revolving credit facility in
April 2024 and interest on the increased cash
balances as a result of the disposals in the year.
Dividends
In April 2024, we increased our annual
dividend by 6% to 3.7 pence per share,
following the sale of Angel Gate, London
and subsequent debt repayment.
On 6 May 2025 we announced a further
increase in the dividend to 3.8 pence per share,
a 2.7% increase. We have maintained dividend
cover at 113% giving comfortable headroom.
Investment properties
As at 31 March 2025 the portfolio comprised
47 assets and the appraised value was
£723.1 million, with revaluation gains on
the portfolio of £12.9 million, net of capital
expenditure and lease incentives.
During the year we disposed of three assets
for total gross proceeds of £51 million,
and £50 million net of disposal costs. The
disposals realised a gain of £1.5 million
reflecting the uplift from March 2024 values.
We have continued to invest in the property
portfolio with £11.8 million in capital
expenditure during the financial year to
support the rental income increases and
capital values over the medium to longer
term. Capital expenditure has been across
all sectors with a focus on the office assets,
which comprised approximately 70% of
the spend during the year. The key office
projects included the refurbishment of
Tower Wharf, Bristol, Atlas House, Marlow,
Grafton Gate, Milton Keynes, Pembroke Court,
Chatham and Colchester Business Park.
£20.1m
Dividends paid
£11.8m
Invested into portfolio upgrades
Picton Property Income Limited
Annual Report 2025
44
Summary of borrowings
2025 2024 2023
Fixed rate loans (£m) 209.6 211.1 212.6
Drawn revolving facility (£m) – 16.4 11.9
Total borrowings (£m) 209.6 227. 5 224.5
Borrowings net of cash (£m) 174.3 207.7 204.4
Undrawn facilities (£m) 50.0 33.6 38.1
Loan to value ratio (%) 24.1 27.9 26.7
Weighted average interest rate (%) 3.7 3.9 3.8
Average duration (years) 6.7 7.2 8.4
The value of the floor that we occupy at
Stanford Building, London, has been excluded
from the value of Investment Properties and
included separately within Property, Plant and
Equipment. Any capital movements arising
from the revaluation of this element of the
property are shown within the Consolidated
Statement of Comprehensive Income and
classified as owner-occupied property.
Borrowings
Total borrowings were £209.6 million at
31 March 2025, with the loan to value ratio
at 24%. The weighted average interest
rate on our borrowings was 3.7% while the
average loan duration was 6.7 years.
The fair value of our drawn borrowings at
31 March 2025 was £183.5 million, lower than
the book value by £26.1 million. As a result, our
EPRA NDV asset value was £559.5 million at
31 March 2025, higher than the reported net
assets under IFRS. Market rates continue to be
higher relative to the rates set on our facilities.
At 31 March 2025, the revolving credit facility
was undrawn, remaining undrawn since April
2024, when it was repaid with the proceeds
from Angel Gate. The £50.0 million facility
was due to mature in May 2025 and has been
refinanced post year end for a further three
years in order to provide operational flexibility
and future investment opportunity. Under
the revolving credit facility extension, the
margin will increase to 165 bps for the first
£25 million drawn and 170 bps thereafter.
We have strong banking relationships
with our lenders; the Group has remained
fully compliant with its loan covenants
and has made scheduled amortisation
payments during the year of £1.5 million.
Cash flow and liquidity
During the year, our cash balances increased
to £35.3 million, mainly due to the disposals
during the year. The cash flow from operating
activities this year was £24.9 million and
dividends paid were £20.1 million.
Net disposal proceeds of £50 million have
primarily been used to repay debt (£17.9
million), invest in the property portfolio
(£11.8 million), purchase shares (£7.5 million),
hedge employee share schemes (£1.5
million) and one tactical acquisition (£0.5
million). The remaining proceeds will be
used to fund the amounts outstanding
under the share buyback programme
(approximately £5 million, as at 31 March
2025) and future capital expenditure.
Share capital
No new ordinary shares were issued during
the year. We announced a share buyback
programme on 30 January 2025 which, on
4 April 2025, was increased to £12.5 million
and extended to 21 May 2025. As at 31 March
2025, a total of 11,205,596 shares had been
purchased and cancelled at a cost of £7.5
million, at an average price of 67 pence. This
equates to a 33% discount to the March 2025
NAV per share and has been accretive to
both earnings and NAV growth. Post year
end, a further 5,360,795 shares have been
purchased and cancelled as at 19 May 2025.
The Company’s Employee Benefit Trust (EBT)
purchased 2,100,000 shares during the year
and holds 2,942,959 shares as at 31 March 2025.
Shares are held by the EBT to hedge awards
outstanding under employee share schemes.
As the Trust is consolidated into the Group’s
results, these shares are effectively held in
treasury and therefore have been excluded
from the net asset value and earnings per
share calculations, from the date of purchase.
Saira Johnston
Chief Financial Officer
21 May 2025
£51m
Disposal proceeds
£12.5m
Share buyback programme
£17.9m
Repaid debt
Picton Property Income Limited
Annual Report 2025
45
Strategic
Report Governance
Financial
Statements
Additional
Information
2025
2024
100p
96p
2023 100p
2022 120p
2021 X.Xp
2025
2024
105p
101p
2023 105p
2022 119p
2021 X.Xp
2025
2024
109p
105p
2023 110p
2022 131p
2021 X.Xp
2025
2024
£22.8m
£21.7m
2023 £21.3m
2022 £21.2m
2021 £X.Xm
Financial Review continued
The EPRA key performance measures
for the year are set out here, with
more detail provided in the EPRA
Best Practices Recommendations (BPR)
and Supplementary Disclosures section
which starts on page 160.
Alternative
performance measures
(APMs)
We use a number of alternative
performance measures
(APMs) when reporting on the
performance of the business
and its financial position. These
do not always have a standard
meaning and may not be
comparable to those used by
other entities. However, we use
industry standard measures and
terminology where possible.
In common with many other
listed property companies, we
report the EPRA performance
measures. We have reported
these for a number of years in
order to provide a consistent
comparison with similar
companies. In the Additional
Information section of this
report, we provide more detailed
information and reconciliations
to IFRS where appropriate.
Our key performance indicators
include three of the key EPRA
measures but also total return,
total property return, property
income return, total shareholder
return, loan to value ratio, cost
ratio, occupier retention rate,
employee satisfaction and EPC
ratings. The definition of these
measures, and the rationale
for their use, is set out in the
Key Performance Indicators
section on pages 20 to 23.
EPRA’s mission
The European Public Real Estate
Association’s (EPRA) mission is to
promote, develop and represent
the European public real estate
sector. As an EPRA member,
we fully support the EPRA Best
Practices Recommendations
which recognise the key
performance indicator
measures, as detailed here.
Specific EPRA metrics can
also be found within the Key
Performance Indicators section
of this report on pages 20 to 23,
with further disclosures and
supporting calculations on
pages 160 to 163.
EPRA NTA per share
100p
EPRA NDV per share
105p
EPRA NRV per share
109p
EPRA earnings
£22.8m
Picton Property Income Limited
Annual Report 2025
46
2025
2024
4.2p
4.0p
2023 3.9p
2022 3.9p
2021 X.Xp
2025
2024
6.2%
9.2%
2023 9.5%
2022 7.2%
2021 X.X%
2025
2024
30.9%
32.4%
2023 29.9%
2022 26.0%
2021 X.X%
2025
2024
5.4%
5.4%
2023 5.0%
2022 4.1%
2021 X.X%
2025
2024
21.9%
23.0%
2023 21.3%
2022 19.9%
2021 X.X%
2025
2024
6.2%
5.9%
2023 5.5%
2022 4.8%
2021 X.X%
2025
2024
24.5%
28.2%
2023 27.0%
2022 21.3%
2021 X.X%
1 Including direct vacancy costs
2 Excluding direct vacancy costs
For more information
on our strategy and
performance across
our report see:
Chief Executive’s
Review page 16
Key Performance
Indicators page 20
Principal Risks page 49
EPRA earnings per share
4.2p
EPRA vacancy rate
6.2%
EPRA cost ratio
1
30.9%
EPRA net initial yield
5.4%
EPRA cost ratio
2
21.9%
EPRA ‘topped-up’ net initial yield
6.2%
EPRA LTV
24.5%
Picton Property Income Limited
Annual Report 2025
47
Strategic
Report Governance
Financial
Statements
Additional
Information
Managing Risks
Responsibilities
The Board recognises that there is inherent risk
that could have a material impact on the Group’s
operations and is committed to effective risk
management to protect stakeholder value.
Board
The Board has ultimate responsibility for risk
management and internal controls within the
Company as well as determining the risk appetite.
The Board reviews the Risk Management Policy at
least annually and will ensure that it is aligned with
the Company’s strategic priorities.
Audit and Risk Committee
Responsible for overseeing the development and
implementation of the Risk Management Policy,
including a six-monthly or as necessary, review of
the existing and emerging risks alongside
mitigating controls and their effectiveness. The
Audit and Risk Committee will report to the Board
on such matters.
Executive Committee
The Executive Committee is responsible for
detailed risk assessment including maintaining
a risk matrix setting out risks, detailed controls
and risk appetite as well as embedding a culture
of risk awareness in relation to day-to-day
operational matters.
Management committees
Support the Executive Committee in these
matters. The Transaction and Finance Committee
has oversight of all property transactions and the
Responsibility Committee specifically has input on
the ESG risks across all areas.
Macroeconomic and geopolitical
challenges have continued into
2025 which has provided some
uncertainty around interest
rates and inflation. Our approach
to risk management remains
key to managing our ongoing
operations and performance,
as well as positioning ourselves
to take advantage of the
changing landscape in the
medium and long term.
Review of risk
management framework
The Board has ultimate
responsibility for risk
management and internal
controls. The Board has adopted
a structured approach to
considering risks and defined
a framework that informs
decision making so that
the risks can be reported,
monitored and mitigated.
During the year, the Board
reviewed and updated the
Risk Management Policy to
strengthen the management
of risks and incorporate risk
and controls scoring into its
framework and risk matrix. Based
on this scoring, the Board has
identified 11 principal risks as
disclosed on pages 49 to 53.
In addition the Board reviews
risk appetite to manage risks and
operations, whilst acknowledging
that the nature of the Company’s
operations involves taking risks.
Whilst the risk appetite might
change over time and different
points in the property cycle, the
overall appetite for risk remains
low and aligned to our long-
term strategic objectives.
Emerging risks
In addition to monitoring
the principal risks, the Board
considers emerging risks. Last
year the Board identified six
emerging risks which have
been incorporated into the
principal risks under economic
market conditions, discount
and the ability to attract capital,
portfolio strategy, regulatory
compliance, climate change
and operational risk.
We recognise that these risks
are rapidly evolving and are
harder to predict in longer-term
timescales. We will in particular
continue to monitor the rapid
changes in technology such
as AI to determine how this
will affect us, our occupiers
and wider stakeholders.
Picton Property Income Limited
Annual Report 2025
48
Low
High
Probable
Unlikely
Likelihood score
Impact score
B
A
D
C
E
F
K
J
I
G
H
Principal Risks
The principal risks have the potential to affect the
business meeting its strategic objectives materially.
These are summarised in the diagram below
and described in the table on the following pages,
which also includes commentary on updates
of any changes during the year.
Market
A
Economic market conditions
B
Discount and ability to
attract capital
Portfolio
C
Portfolio strategy
D
Investment
E
Occupiers
F
Valuation
Finance and Tax
G
Liquidity and working capital
H
Gearing
Other
I
Regulatory compliance
J
Operational
K
Climate change
Principal risks
Risk matrix
The principal risks remain consistent
with those reported last year but we
have recategorised and reframed
the descriptions of some risks and
added a new principal risk: discount
and ability to attract capital.
Picton Property Income Limited
Annual Report 2025
49
Strategic
Report Governance
Financial
Statements
Additional
Information
Principal Risks continued
Market
A
Economic market conditions
The Company’s performance
is adversely impacted by
wider economic factors such
as inflation, interest rates,
political changes, recession
and geopolitical events.
Impact
Investors required return
increases and there is a
difference between the
Company’s achieved returns
compared to their return
requirements.
Occupiers’ businesses are
adversely impacted by poor
economic conditions.
Inflation impacts the
Company’s cost base.
How is the risk managed
The Board considers
economic and market
conditions when reviewing
its strategy and making
investment decisions.
Commentary
Current macroeconomic
conditions and geopolitical
events mean the outlook
remains uncertain.
The outlook for GDP
growth, inflation, the labour
market and other factors
will influence the central
bank’s decision making
on interest rates.
Risk trend:
Link to strategic priorities:
1
2
3
B
Discount and ability to attract capital
The Company’s share price
discount to NAV will persist or
widen and there is insufficient
appetite from new or existing
shareholders to support an
equity raise or growth.
Impact
A share price discount will
prevent the Company raising
more equity which adversely
affects the Company’s ability
to achieve economies of
scale from an internally
managed model.
Shareholder dissatisfaction
increases susceptibility to
corporate activity/interest.
Unable to attract broader
coverage from analysts/
rating agencies/investors
due to scale.
How is the risk managed
The level of discount relative
to the NAV is closely
monitored by the Board.
The Board has prioritised the
allocation of capital to repay
the floating rate debt in order
to support earnings growth
and narrow the discount. New
investment opportunities
have been de-prioritised and
a share buyback programme
has commenced.
Proactive push to widen
shareholder base with brokers,
as well as increase shareholder
engagement for example,
hosting a capital markets day.
Commentary
The Board is working closely
to address the discount at
which the shares trade
through capital allocation and
executing the planned office
repositioning strategy.
Risk trend:
Link to strategic priorities:
1
2
3
Picton Property Income Limited
Annual Report 2025
50
Portfolio
C
Portfolio strategy
Diversification across
geographies and ‘traditional’
sectors may lead to the
Company’s portfolio delivering
below MSCI/peer group
performance.
Impact
Underperformance vs. peer
group and insufficient clarity
to investors on return profile.
The Company is unable to
meet investors’ required
returns and is perceived to
hold sectors/assets which
generate lower returns than
either the overall benchmark
or specialists.
How is the risk managed
The composition of the
portfolio is reviewed regularly
alongside market trends to
determine whether a pivot
in sector or geography
weightings is appropriate.
Annual asset level business
plans are completed with
forecast returns.
Team remuneration is linked
to MSCI and peer
performance.
Commentary
The Group has continued to
reduce its exposure to the
office sector by pursuing
alternative use strategies
and executing on disposals.
As a result, the portfolio is
most concentrated in the
industrial sector.
The portfolio has outperformed
the MSCI UK Quarterly
Property Index this year.
Risk trend:
Link to strategic priorities:
1
2
3
D
Investment
Lack of acquisitions or
reinvestment opportunities
that are accretive to returns.
Where suitable investments
can be identified, there
may be pricing competition
which affects the ability to
transact. Issues not identified
in due diligence.
Impact
Underperformance in the
property portfolio.
Unable to recycle capital and
reprofile returns and/or yield
on the portfolio.
How is the risk managed
The team is actively engaging
with the market, seeking
new deals and building
an investment pipeline.
Acquisitions are subject to
Board-level approval and
post-acquisition reviews are
carried out after two years.
Commentary
Notwithstanding the current
prioritisation of share
buybacks, we continue to
monitor future opportunities
and evaluate returns.
MSCI recorded a 15% increase
in transaction volumes in the
year to March 2025, albeit
investment volumes remain
below the long-term average.
Risk trend:
Link to strategic priorities:
1
2
E
Occupiers
Occupier defaults,
increasing numbers of
lease breaks actioned.
Poorer occupational
property market.
Impact
Immediate impact on
earnings and dividend
capacity.
Risk of bank covenant
breaches.
How is the risk managed
The property portfolio is
diversified across sectors,
assets and occupiers.
Our occupier focused
approach, underpinned
by our key Picton Promise
commitments, ensures
strong occupier engagement,
evidenced by our annual
occupier survey.
Monthly meetings
monitor Property Manager
performance, with weekly rent
collection reporting.
Commentary
The occupier market has
remained resilient, with MSCI
reporting four consecutive
years of robust levels of rental
growth to March 2025.
Our rent collection is 99%.
Risk trend:
Link to strategic priorities:
1
3
Increasing No change/
stable
Decreasing
Risk trend:
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Additional
Information
Principal Risks continued
Portfolio continued
F
Valuation
Property valuations are
subjective and dependent on
geopolitical, macroeconomic
and cyclical factors, such as
inflation and interest rates in
addition to structural changes
in certain sectors and regions.
Impact
Decreasing valuations reduce
investor confidence and
share price. Volatile or
unsupportable valuations
could lead to loss of investor
confidence in the NAV. Breach
of banking covenants.
How is the risk managed
The properties are valued
quarterly by an independent
valuer with oversight from
the Property Valuation
Committee, which facilitates
an in-depth quarterly review.
Mandatory valuation rotation
with a maximum of five years
for an individual and ten years
for a firm.
No development or land.
Commentary
Commercial property values
have stabilised during the year
and headroom exists on
banking covenants.
Knight Frank were appointed
as external valuer effective
June 2025 due to mandatory
valuer rotation. As at 31 March
2025 a shadow valuation was
carried out alongside CBRE,
and reviewed by the Property
Valuation Committee.
Risk trend:
Link to strategic priorities:
1
Finance and tax
G
Liquidity and working capital
The Company requires
cash flows from rental
income and contractual lease
payments in order to meet its
liabilities to lenders, suppliers
and dividend payments
to shareholders.
Impact
Insufficient cash to meet
liabilities which may mean
delayed payments to
suppliers, insufficient cash
for dividends payments.
How is the risk managed
The revolving credit facility
(RCF) allows flexibility to draw,
repay and manage working
capital, capital expenditure
and disposal/acquisitions.
The Board reviews quarterly
cash flow forecasts.
Commentary
During the year the Company
disposed of three assets and
the disposal proceeds have
been utilised during the year
to repay the RCF.
Post year end we refinanced
the RCF with NatWest,
extending the maturity for an
initial term of three years with
two further one year extension
options. The RCF is undrawn
but provides operational
flexibility and opportunity
for investment.
Risk trend:
Link to strategic priorities:
2
H
Gearing
Potential to enhance returns
but in falling markets there
may also be an adverse
impact on performance. A
breach of debt covenants or
failure to manage refinancing
events could lead to a funding
shortfall. Cost base exposed to
interest rate risk.
Impact
Loan amounts become
immediately due in the event
of a breach or a refinancing
which may have to be
resolved by forced asset
sales or penal interest rates.
Increased cost base if interest
rate increases.
How is the risk managed
The Board reviews quarterly
cash flow forecasts and
loan covenants.
Interest rate hedging is
in place through the fixed
rate loans.
We have a diverse lender base
and longstanding
relationships.
Commentary
Disposal proceeds have been
utilised during the year to
repay the RCF and reduce our
LTV from 28% to 24%.
The RCF has been refinanced
and the maturity extended for
an initial term of three years
with two further one year
extension options.
Debt maturity is 6.7 years.
Risk trend:
Link to strategic priorities:
2
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Other
I
Regulatory compliance
The Company must comply
with a wide range of
legislation and regulation
including health and
safety, tax and listing rules,
environmental reporting
and accounting matters.
New or revised legislation or
regulations may have an
adverse impact on operations
and increase costs.
Impact
Financial loss and reputational
damage or REIT status
withdrawn.
Litigation, fines and
reputational damage from
health and safety failures.
Additional costs as a result of
increasing legislation and loss
of shareholder confidence as a
result of any breaches.
How is the risk managed
Appointment of Deloitte as
tax advisers.
The Board monitors changes
to legislation with its
professional advisers and
through industry bodies
such as the Better Buildings
Partnership and British
Property Federation.
The governance structure
supports this further with the
Health and Safety and
Responsibility committees.
Commentary
Planning reforms have been
beneficial to our change of use
strategy and securing planning
permission for alternative use
at four office assets.
The Government is expected
to continue support of the
REIT regime and its focus to
decarbonise and transition
to net zero.
Risk trend:
Link to strategic priorities:
2
3
J
Operational
A small team with higher key
person reliance and simple
operational structure which
may be impacted by a major
event/business disruption.
Impact
Loss of certain individuals will
have a material impact on
operations and shareholder
engagement/market
perception.
An unexpected business
disruption event would
have an adverse financial
impact and restrict the ability
to operate.
How is the risk managed
A succession plan is in place
and reviewed annually.
We have in place an employee
incentive package to support
retention.
Incident Management
Strategy and Business
Continuity Plan is in place.
We engage regularly with
our employees.
Commentary
The risk of cyber events
and business disruption
events remains.
During the year we reviewed
our Incident Management
Strategy and Business
Continuity Plan.
Our internal audit scope
included a review of IT
controls, and our cyber
certifications were updated.
We rolled out IT Security
training for all our employees.
Risk trend:
Link to strategic priorities:
2
K
Climate change
Transition risks associated
with the long-term trends
arising from climate change.
These include increasing
regulation, reporting,
insurance, Government
response and business
models of landlords and
occupiers changing.
Physical risks associated with
the impact of climate change
on our buildings.
Impact
Cost base increased by
increased reporting
requirements and regulation.
Valuation adversely impacted
by capital expenditure needed
to transition, manage
obsolescence and stranded
asset risk.
How is the risk managed
ESG governance processes
are embedded into
investment, asset and
operational processes.
Environmental consultants
available on a retainer basis
to advise on upcoming
transition risks.
The portfolio is diversified across
a number of sectors, assets and
geographic locations.
Flood risk assessments
have been carried out for all
properties in respect of pluvial,
fluvial and reservoir flooding.
EPC ratings are closely
monitored and reported.
Commentary
We continue to improve our
EPC profile and remain fully
MEES compliant.
Our assessments show that
the flood risk in the portfolio
remains de minimis.
Our due diligence process
alerts us to any physical or
transition risk associated
with property acquisitions.
Risk trend:
Link to strategic priorities:
2
3
Increasing No change/
stable
Decreasing
Risk trend:
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Additional
Information
Governance
Strategy
Risk management
Metrics & targets
TCFD Statement
We are committed to ensuring that sustainability
is embedded in everything we do as a business,
and we are dedicated to proactively managing our
climate-related risks and reporting climate-related
financial information publicly and transparently
for our stakeholders.
Here, we firstly outline our
overarching risk management
approach and secondly,
disclose the climate-related
risks and opportunities for
the business, which we have
identified in accordance with
the Task Force on Climate-
related Financial Disclosures’
(TCFD) recommendations and
complying with the LSE Listing
Rules published by the Financial
Conduct Authority in 2022.
This is an area which is
evolving and we will seek to
improve our disclosure over
time. Additional information is
published in our Sustainability
Data Performance Report.
Inside this section
55 Governance
56 Strategy
60 Risk management
61 Metrics and targets
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Governance
Recommendation Commentary
1.1 The Board’s oversight of
climate-related risks and
opportunities
For more information
Managing Risks on page 48
Board Committees on page 100
Scan or click here to
see our ESG policies
The Board has ultimate responsibility for risk management including monitoring ESG and
climate-related risk as part of the Group’s overall risk management framework.
The Board has delegated responsibility to the Audit and Risk Committee for ensuring that
climate-related risks and wider sustainability issues facing the Group are identified and monitored.
The Board has also delegated responsibility for monitoring existing and emerging risks alongside
the mitigating controls and their effectiveness.
Climate change has been identified as a principal risk to the business and the Audit and Risk
Committee is therefore responsible for updating the Board on the current and planned actions
being taken to mitigate material climate-related risks to the Group.
The Board receives climate-related information as part of the Executive’s reporting to the Board
on responsibility matters, and on climate-related risk as part of the Audit and Risk Committee’s
reporting to the Board following its annual review of the Risk Management Policy.
The Board has adopted a new ESG Governance Policy this year as part of the work undertaken
reviewing and developing our ESG Strategy.
1.2 Management’s role in
assessing and managing
climate-related risks and
opportunities
For more information
Scan or click here to
see our ESG policies
The Executive Committee is responsible for detailed risk assessment including a risk matrix
setting out risks, detailed controls and risk appetite as well as embedding a culture of risk
awareness in relation to day-to-day operational matters. Climate-related risks, both transitional
and physical are included in this and each stage of an asset’s life cycle from acquisition.
The Executive Committee has delegated day-to-day responsibility for ESG, including climate-
related matters and wider sustainability issues, to the Responsibility Committee.
The Responsibility Committee meets regularly to consider all aspects of sustainability and is
responsible for identifying and reporting any emerging climate-related risks and opportunities.
The Committee ensures compliance with all relevant ESG standards and legislation and provides
regular updates to the Executive Committee.
The Responsibility Committee is also responsible for overseeing our ESG strategy and has
oversight of the Climate Action Working Group, which is responsible for the implementation of
several climate-related policies and strategies which have been put in place to mitigate the risks
of climate change.
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Statements
Additional
Information
TCFD Statement continued
Strategy
Recommendation Commentary
2.1 Climate-related risks
and opportunities identified
over the short, medium and
long term
Climate-related risks will materialise over differing time horizons and we have undertaken
climate risk assessments to identify the short-term risks and consider those that might impact
in the medium and long term.
The climate risk assessments carried out in 2021, were across the two climate scenarios RCP 4.5
and RCP 8.5 by the Intergovernmental Panel on Climate Change (IPCC) to identify the top
climate-related risks and opportunities to our business in the short term (2020–2029), medium
(2030–2039) and long term (>2040) as well as assess their implications and the necessary actions
to manage them. We will review the need to update this assessment after each five-year period,
or sooner if more than 25% of the portfolio changes. Since 2021, there have been three asset
acquisitions and disposals and we do not deem this to be a material portfolio change in this
context.
Scenario analysis
The climate risk assessment process in 2021, covered all relevant climate-related risks, tailored to
the assets’ geography sector, across the decades 2020–2029, 2030–2039 and 2040–2049 under
scenarios RCP 4.5 and RCP 8.5.
From this we were able to identify the risk profiles of our assets, strengthening our ability to
make sound strategic decisions on where to focus mitigation actions and harness opportunities.
The asset-level assessment included modelling our assets’ susceptibility to climate-related risks,
including physical risks, for example flooding, heat stress and extreme weather events; and
transition risks, such as market risks and technology, in quantitative terms, exposing the
potential financial losses and savings associated.
The business-level assessment qualitatively determined the likelihood and impact of a range of
physical and transition climate-related risks on a scale of one to five, with consideration of the
portfolio modelling results, by rigorously analysing the most up-to-date, peer-reviewed scientific
literature. The impact assessment factored in the level of disruption, financial impact and ease/
cost of mitigation of the risk, ranging from minimal or no impact (1) to catastrophic impact that
threatens the business’ future (5). Likelihood was based on the probability, frequency, duration of
impact and speed at which the risks materialise, ranging from risks with a short duration that
materialise gradually to risks that materialise rapidly and endure over a significant period. High
impact opportunities were also identified in relation to our business strategy.
Climate risk is considered as part of the acquisition due diligence process in accordance with
BBP Acquisitions Sustainability Toolkit. We do not believe the portfolio changes since 2021
have impacted the risks and opportunities within the portfolio.
We identified our top risks, which are included in the table below.
Time horizons
We have selected time horizons aligning with climate policy and available data. We have
assessed our time horizons and current business strategy against climate risks over the short,
medium and long term.
Short term
2020–2029
Medium term
2030–2039
Long term
>2040
To mitigate the largest
impacts in the current
decade, plans and resilience
measures must be
implemented in the
immediate term. Our
short-term focus has been to
transition from gas to electric
in buildings that we manage
directly. In addition, we are
installing solar on-site
renewables where feasible.
We aim to achieve net zero
carbon by 2040, ahead of the
UK Government’s 2050 target.
Aligning this time horizon to
our decarbonisation target
supports clear stakeholder
communications and asset
planning, as net zero carbon
and climate resilience
measures can be executed
in parallel.
We recognise that long-term
climate risks present
near-term challenges, such
as reputational damage or
reduced asset values.
Identifying these risks has
guided our investment
decision to embed climate
resilience across our business
and portfolio.
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Risk Risk description Risk impacts Mitigating controls
Short term 2020–2029
Changes in
market and
occupier
expectations
and demand
As markets shift to meet
growing demand for low or zero
carbon alternatives, climate
resilient assets could achieve
‘green premiums’ by
outperforming unsustainable
assets. Failure to adapt could
create competitive risk and
occupier default risk, while
demand may also shift away
from certain geographies or
sectors.
– Lower demand for inefficient
assets, creating lower rental
and asset values
– Stranded asset risk in high-risk
geographies
– Occupier default risk for
occupiers with carbon
intensive operations
– Risk: management approach
includes identification and
tracking of climate-related risk,
including both physical and
transition risks
– Data: we are working with our
data system provider and
managing agent to improve the
quality of our energy consumption
data, in respect of detail, accuracy
and coverage, for both landlord
and occupier data
– Occupiers: incorporating green
lease clauses to engage occupiers
and improve data collection
– Investment: consideration of
divestment from high-risk assets
if necessary. Acquisition due
diligence incorporates Better
Buildings Partnership acquisition
guidelines
– Refurbishment: investing
in the current portfolio in
accordance with our sustainable
refurbishment guidelines at an
appropriate time in the lease
event cycle
– Portfolio management:
incorporating TCFD considerations
and net zero strategy into our
annual asset business plans, with
actions being regularly reviewed
and monitored through the ESG
Governance Policy
Increased
building
standards
requirements
Buildings to adhere to higher
standards, to improve efficiencies
and operational practice.
Non-compliant assets could
experience reputational risk and
reduced occupier demand.
– Capital expenditure cost to
meet new standards
– Stranded asset risk and
increased void period for
non-compliance
Financial market
impacts
Market preferences shift towards
low carbon solutions and climate
resilience, or due to sustained
damage from climate-related
physical impacts.
– Potentially affecting our ability
to secure financial capital,
acquisition activities and
asset values
Strategy continued
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Additional
Information
TCFD Statement continued
Risk Risk description Risk impacts Mitigating controls
Medium term 2030–2039
Decarbonisation
and increased
energy demand/
cost
Increasing demand for
renewable energy sources and
low carbon solutions exceeds
supply or infrastructure
capabilities.
– Rise in energy prices due to
support for low carbon
generation
– Increased operational costs,
fuelled by price increases and
rising demand for cooling
– Increase in material and
procurement costs due to
supply chain disruptions and
carbon tax on embodied
carbon
– Risk: management approach
includes identification and
tracking of climate-related risk,
including both physical and
transition risks
– Refurbishment: continued
implementation of our sustainable
refurbishment guidelines across
our portfolio at an appropriate
time in the lease event cycle.
Updating these as needed to
implement our net zero strategy
– Portfolio management: continued
incorporation of TCFD risk analysis
and our net zero strategy into
asset-level business plans
– Continued monitoring and
evolution of the process, through
the ESG Governance Policy
– Update climate risk assessment
and prioritise assets with
vulnerability to extreme
weather events
Flooding Increased duration and intensity
of precipitation, snow melt and
rising sea levels will exacerbate
all types of flooding. In our
current portfolio there is very
limited exposure to coastal
flooding risk. Some assets have a
degree of exposure to fluvial and
pluvial flooding risk.
– Repair costs and loss of access
to asset
– Capital expenditure to install
mitigation measures
– Reduced regional investment
and footfall
– Decline in asset value or
stranded asset risk
Heat stress Rising mean temperature and
extreme temperature highs puts
pressure on both our assets and
people. Our concentration of
assets in Southern England
increases our susceptibility to
this risk and to associated costs.
– Degradation of plant and
equipment leading to capital
expenditure associated with
replacement
– Increased operational costs
– Reduced occupier demand for
spaces lacking sufficient
cooling and/or ventilation
Extreme weather
events
Extreme weather events,
including storms, heavy winds,
heavy precipitation, drought and
snow become more frequent
and severe, exacerbated by
shifting sea temperatures and
seasonal patterns.
– Repair costs and loss of access
to asset
– Capital expenditure to install
mitigation measures
– Decline in asset value or
stranded asset risk
Long term >2040
Drought and
water stress
Water becomes increasingly
scarce, with supply unable to
meet demand. As temperatures
rise, average drought lengths
could increase, with implications
on water costs, supply chains
and public health.
– Increased operational costs
– Decline in asset value for water
inefficient asset
– Capital expenditure to improve
efficiency
– Increased risk of property
damage due to subsidence
– Increased insurance cost
– Supply chain risk
– We will carry out a detailed water
stress assessment and develop a
mitigation and adaptation plan
Strategy continued
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Strategy continued
Recommendation Commentary
2.2 Impact of climate-related
risks and opportunities on
the organisation’s businesses,
strategy and financial
planning
For more information
Sustainable Thinking: Our
Approach on pages 64 to 65
Net Zero Progress
on pages 70 to 71
Acting responsibly is a key strategic priority and is embedded within our business model
supporting what we do in all elements of investment and asset management, whilst considering
the impact on all of our stakeholders. This year we reviewed our materiality assessment, ESG
priorities and defined a framework of strategies and policies to support these across all areas of
our business. The framework includes a Climate Change Policy, supported by a Climate
Resilience and Net Zero Strategy as well as a Biodiversity Policy.
Our pathway to achieve net zero carbon by 2040 aligns with the Better Buildings Partnership’s
(BBP) Net Zero Carbon Pathway Framework and the UK Green Building Council’s (UKGBC) net
zero carbon hierarchy.
Managing climate risk is integrated in all stages of the asset life cycles as set out below:
1. Acquisitions
The BBP Acquisitions Sustainability Toolkit is used during the acquisition process. This includes a
sustainability investment checklist to assist with due diligence and guidance for asset onboarding
post-acquisition.
2. Refurbishment
We have created refurbishment guidelines supported by sector-specific net zero carbon guides.
The refurbishment guidelines will evolve to include assessing transition and physical risks,
and improving overall asset performance, for example:
– Stranding risk assessment using CRREM, to ascertain the stranding year of each asset
– Thresholds for whole life carbon emissions and embodied carbon of materials
– Requirements to mandate the use of low and zero-carbon technologies, maximising
renewable energy generation and procurement of renewable energy
– Physical risk assessment and climate resilience including measurement and reporting
of flood and overheating risks as well as incorporating adaptation measures
3. Asset management
Our asset-level business plans are reviewed annually and incorporate TCFD considerations
as well as net zero strategy. The plans include data on the current position of each asset, for
example energy intensity, EPC ratings, presence of fossil fuel-based systems and any on-site
renewables. The business plans detail our strategy over the short, medium and long term for
each asset in terms of building decarbonisation, execution of the net zero carbon guides and
consideration of current and future physical and transition risks.
Effective collaboration with our occupiers is essential if we are to achieve our net zero commitment.
2.3 Resilience of the
organisation’s strategy,
taking into consideration
different climate-related
scenarios
Having conducted climate risk assessments across the IPCC’s RCP 4.5 and RCP 8.5 scenarios,
we have an understanding of our material climate-related risks and opportunities.
Our chosen scenarios align with industry best practice and cover the most likely range of average
global temperature rise in the coming decades. The RCP 4.5 climate scenario is characterised by
significant policy action and market forces to decarbonise and meet the Paris Agreement. Our
resilience to risks presented by the low-carbon transition is being secured by implementing our net
zero carbon pathway and related activities described in this TCFD disclosure. The RCP 8.5 scenario is
characterised by significant changes in weather patterns and severe physical hazards, accompanied
by increased risks for destabilisation of financial markets affecting revenues, insurance challenges
and litigation cases if risks are not managed adequately. Our resilience against risks associated with
this high emissions scenario is being secured by embedding stringent mitigation measures to
support climate adaptation and resilience across each stage of the property life cycle and our
proactive approach to assessing and managing risks.
Analysing these distinct climate scenarios has enabled us to understand the wide scope of
climate-related risks and opportunities and inform actions to support our resilience.
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Strategic
Report Governance
Financial
Statements
Additional
Information
Risk management
Recommendation Commentary
The organisation’s processes
for identifying and assessing
climate-related risks
For more information
Scan or click here to
see our ESG policies
The material climate-related risks defined as a result of this assessment are incorporated in the
risk management framework and matrix, which is reviewed annually. This year we have
formalised an ESG Governance Policy which sets out responsibilities for all elements of ESG
including climate risk.
Climate change risk is considered a principal risk. In assessing this risk, we have carried out asset-
level desktop assessments for our entire portfolio to understand our exposure to this climate risk at a
more granular level, addressing flooding from rivers, surface water, reservoirs and sea.
The organisation’s
processes for managing
climate-related risks
For more information
Net Zero Progress
on pages 70 to 71
We are committed to future-proofing our portfolio and retaining its value and have built this into
our business model as noted below.
1. Business planning
The asset-level business plans contain an ESG dashboard which includes EPC ratings, flood risk and
whether the asset meets the key elements of our net zero strategy, such as removing fossil fuels and
installing solar panels. The business plans are reported to the Board and reviewed semi-annually.
2. Acquisitions
The BBP Acquisitions Sustainability Toolkit is used during the acquisition process. This includes
a sustainability investment checklist to assist with due diligence and guidance for asset
onboarding post-acquisition.
3. Refurbishment
We acknowledge that this investment is vital to maintain the value of our assets and to remain
attractive to occupiers seeking climate change resilience. Our sustainable refurbishment guidelines
include a number of detailed initiatives that support this and underpin our net zero strategy.
4. Portfolio management
We will continue to inspect properties on an ongoing basis to ensure the asset-level business plans
are implemented and these include actions to address for changing risks. We work with our
property manager to improve the data on our buildings, helping us to understand our portfolio’s
baseline resilience to climate risk impacts and informing our asset resilience planning and capital
expenditure requirements. We meet regularly with our insurance advisers to discuss climate-related
issues as needed. This year we changed insurance broker to one more focused on climate issues.
5. Occupier engagement
Our occupier engagement strategy helps facilitate discussions with occupiers on sustainability
and climate-related topics. These are also included within the annual occupier survey and, in
response, we are developing initiatives that will provide our occupiers with greater knowledge
and expertise to optimise the sustainability performance of their buildings.
When our energy data collection system is fully operational, we will be able to identify high-
consumption occupiers, conduct audits, and implement an engagement programme focusing
on energy efficiency and emissions reduction.
6. Data collection
We have continued to improve our energy data collection process to enhance our ability
to measure and manage emissions by working with our system provider, property manager
and occupiers. Green lease clauses are incorporated into lease agreements.
The processes for identifying,
assessing and managing
climate-related risks are
integrated into the
organisation’s overall risk
management framework
Our Risk Management Policy has enabled us to effectively integrate the climate-related risks which
we have identified and assessed (see Strategy section) into our overall risk management processes,
such that sustainability and climate-related issues are considered across all our activities. We are
committed to conducting business responsibly and in a way that creates a positive impact on
society. Therefore, we will continue to ensure climate-related risks are identified, assessed and
managed appropriately to fulfil our role in tackling climate change.
TCFD Statement continued
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Metrics and targets
Recommendation Commentary
Metrics used by the
organisation to assess
climate-related risks
and opportunities in line
with its strategy and risk
management processes
We report in line with EPRA Sustainability Best Practices Recommendations for sustainability
reporting and publish our EPRA tables annually. We use a range of metrics to inform our
stakeholders of our climate-related performance and activities, including:
– Total and like-for-like Scope 1 and 2 emissions and total Scope 3 emissions;
– Total and like-for-like electricity consumed in kWh, including energy intensity in kWh/m
2
;
– Energy intensities for Scope 1 and 2 emissions using the metric tCO
2
e/m
2
;
– Total renewable energy generated in kWh;
– Total and like-for-like water consumption, including occupier water consumption in absolute
terms, for each asset type; and
– Total and like-for-like waste disposal in tonnes, split into recycling, composting, recovery,
incineration and landfill.
To supplement our quantitative measures, we also assess key qualitative measures, including
EPC ratings and building certifications to build a holistic view of our portfolio’s performance.
Metrics included in our net zero carbon pathway which we will aim to report on in the future
include:
– Portfolio on-site renewable energy capacity (MW);
– Renewable energy procurement (%);
– High quality renewable energy procurement (%);
– Major refurbishment embodied carbon intensity (tCO
2
e/m
2
GIA);
– Minor development and fit-out embodied carbon intensity (tCO
2
e/m
2
GIA);
– Total portfolio embodied carbon development (tCO
2
e);
– Total carbon emissions offset (tCO
2
e).
Scope 1, Scope 2 and
if appropriate, Scope 3
greenhouse gas (GHG)
emissions, and the
related risks
We disclose Scope 1, 2 and 3 greenhouse gas emissions in our Annual Report and Sustainability
Data Performance Report. We provide trend analysis since 2019 to show progress and historical
performance.
We calculate and report our emissions in line with the GHG Protocol Corporate Accounting and
Reporting Standard.
Targets used by the
organisation to manage
climate-related risks
and opportunities and
performance against targets
In recognition of the escalating concerns around climate change and our awareness that the real
estate industry is a key contributor to global GHG emissions, we have developed a 1.5°C aligned
net zero carbon pathway with a target year of 2040.
We are currently developing interim/short-term reduction targets for our Scope 1, Scope 2 and
Scope 3 emissions, as we believe this will guide more focused actions to reduce emissions across
our operations. We intend to focus on defining our Scope 1 and Scope 2 interim targets initially,
followed by our Scope 3 interim targets, which we will disclose in our future reports once
confirmed.
We are pursuing an embodied carbon target of 300 kgCO
2
e/m
2
by 2040 for major
refurbishments, aligning with the LETI 2030 Design Target for upfront embodied carbon (A1–A5).
To increase our accountability and culturally embed climate risk management throughout the
organisation, we have set remuneration-linked annual objectives applicable to Executive
Directors’ bonus opportunities for sustainability progress.
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Strategic
Report Governance
Financial
Statements
Additional
Information
Sustainable Thinking: Practical Solutions
While the ESG landscape
is changing, we remain
focused on effective and
practical solutions.
Acting responsibly is one of
our key strategic priorities
and sustainable thinking
is embedded within our
business model, underpinning
all elements of investment
and asset management.
This year, we have been exploring
various options for setting interim
net zero targets to maintain
steady progress toward our
2024 net zero goal, in tandem
with reviewing our materiality
assessment and ESG priorities.
The results of that have driven
our ESG strategy and the
supporting policy framework.
We have recently published
our new ESG Governance
and Diversity and Inclusion
policies. We will be finalising the
remainder over the coming year.
Alongside this we have continued
making good progress with
initiatives to reduce our
emissions across the portfolio
at an opportune time, typically
generated by leasing activity and
collaboration with our occupiers.
Our key areas of focus to
reduce operational carbon, at
an asset level, have been:
– Upgrading building structures:
improving the fabric of our
buildings to increase thermal
performance, such as roofing
and insulation
– Phasing out fossil fuels across
our portfolio: replacing with
electric based systems and
upgrading heating, cooling and
ventilation systems
– Installing energy efficient
lighting systems: reducing the
energy utilised for our occupiers
and us as a landlord
– Improving building systems
and optimisation measures
– Installing solar panels and
electric chargers
– Embracing circular economy
principles and maximising
opportunities to recycle and
reuse fit-out materials across
our portfolio
– Aiming to improve occupier
data collection to enhance our
ability to measure and manage
emissions
We recognise the importance of
occupier data collection in order
to track our emissions and enable
us to set new interim targets
to progress our commitment
to net zero carbon in 2040.
We continue to collaborate with
our occupiers and improve the
automated metering of utility
suppliers across our portfolio.
We are currently evaluating the
Science Based Targets initiative
(SBTi) framework as a method
to establish interim carbon
reduction targets and accelerate
progress toward our net zero goal.
We are committed to clear
and transparent reporting
and continue to contribute
to GRESB, as well as being
active members of the Better
Buildings Partnership.
We remain focused on resilience
and long-term value creation
for stakeholders, while being a
driver of positive environmental
and social impact.
Michael Morris
Chief Executive
For more information:
Sustainable Thinking:
Our Approach pages 64 to 65
Net Zero Progress
pages 70 to 71
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62
ESG at a glance
Focus and key priorities FY26
Environmental focus
– Implement our new
environmental policies
and strategies
– Continue to decarbonise assets
and increase the provision of
on-site renewable energy
production where feasible
– Continue to improve EPC
ratings, with increased
focus on achieving a higher
proportion of A and B ratings
in the portfolio
– Evaluate methods for interim
carbon reduction target setting
as we progress along our net
zero pathway
– Consider rebaselining our net
zero carbon pathway, as energy
data collection rates and
methods have improved since
our 2019 baseline was created
Social impact
– Implement our new social
impact policies, strategies and
statements
– Continue to implement our
occupier, employee, community
and supplier engagement
programmes
– Review our charity partnerships
in line with our social impact
policy
Governance
– Implement our new
governance policies and
strategies
– Continue to improve our GRESB
and EPRA scores
2024 GRESB
rating
3 stars
Scope 3 data collection
55%
2024: 62%
Investor meetings
66
Solar panels installed
531
EPC ratings A-C
83%
2024: 80%
2025
2024
83%
80%
Employee satisfaction
76%
2024: 86%
2025
2024
76%
86%
Charitable donations
to 15charities
£26k
2024: £25k to 15 charities
Reduction in Scope 1 & 2
emissions compared to
our 2019 baseline
20%
Occupier retention rate
66%
2024: 76%
New leases contained
green clauses
97%
2024: 100%
Electricity purchased
from REGO backed
renewable sources
100%
2024 EPRA
award rating
Gold
Environmental
focus
Social impact Governance
Occupiers recommend us
as a landlord
88%
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Financial
Statements
Additional
Information
Sustainable thinking,
responsible business
Climate
Change
Biodiversity
Net
Zero
Climate
Resilience
Occupier
Engagement
Supplier
Engagement
Community
Engagement
Employee
Engagement
ESG
Governance
Reporting &
Disclosure
Risk
Management
Ethical
Conduct
G
o
v
e
r
n
a
n
c
e
E
n
v
i
r
o
n
m
e
n
t
a
l
f
o
c
u
s
S
o
c
i
a
l
i
m
p
a
c
t
Sustainable Thinking: Our Approach
Environmental focus
66 75 81
Social impact Governance
We are committed to integrating
environmental, social and
governance best practice within
our core business activities and
continue to evolve our approach,
developing our policies and strategies
to support our key priorities.
Our ESG priorities focus on creating long-term
value through sustainable practices.
These priorities address environmental
impacts, social value creation and strong
governance frameworks.
This year we have worked with sustainability
consultants to review our material issues,
refine our key ESG priorities and developed
a framework of policies and strategies to
support these across all areas of our business.
Following this review, we also reassessed
our alignment with the United Nations
Sustainable Development Goals
(UN SDGs) to understand which goals
are particularly important to us. While
elements of our business are aligned
with many of these global goals, we have
prioritised alignment with those where
we can make the greatest contribution:
– Affordable and clean energy
– Sustainable cities and communities
– Responsible consumption and production
– Climate action
– Life below water
– Life on land
Picton Property Income Limited
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64
Environmental
focus
Social
impact
Governance
Anti-Bribery
Policies
Themes
Strategies/
Statements
Connected
UN SDGs
Pillars
ESG Reporting and Disclosures
Risk Management
ESG Governance Structure
Sustainable Refurbishment
Guidelines
Waste Statement
Climate Resilience Strategy
Net Zero Strategy
Modern
Slavery
Statement
Diversity &
Inclusion
Occupier
Engagement
Climate
change
Community
Engagement
Climate
resilience
Supplier
Engagement
Biodiversity
Employee
Engagement
Net zero
ESG Governance Policy
Social Impact Policy
Climate
Change
Policy
Biodiversity
Policy
We have also established new
overarching policies for key
areas of our business, including
climate change and social impact,
which were previously set out
under individual policies.
Our environmental priorities
remain focused on managing
climate risk, owning
sustainable buildings and
conserving and enhancing
biodiversity at our assets.
Our social value priorities
are focused on stakeholder
engagement with an
emphasis on the wellbeing
of occupiers, employees and
the wider community.
We work with suppliers that
are aligned with our values.
Strong governance ensures our
clear and transparent reporting,
ethical practices, regulatory
compliance and alignment with
our stakeholders expectations.
By integrating sustainable
thinking into our core
operations, we aim to
reduce our environmental
footprint, enhance occupier
wellbeing and maintain strong
governance practices.
Strategy and policy framework
Our strategy and policy framework
drives our ESG priorities and approach
and sets out some new policy areas,
including ESG governance and diversity
and inclusion.
Scan or click here for
our full list of Policies
on our website
Picton Property Income Limited
Annual Report 2025
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Strategic
Report Governance
Financial
Statements
Additional
Information
Sustainable Thinking continued
We have integrated an
environmental focus
throughout our business, from
our strategic priorities down
to individual asset level. Our
environmental policies underpin
the way we operate, providing
clear guidance and setting
expectations for all stakeholders,
including our value chain.
We are focused on mitigating
climate risks and protecting
biodiversity in the areas in which
we operate. Our environmental
priorities are climate change,
climate resilience and
biodiversity, and we are aligned
to the UN SDGs of climate
action, sustainable cities and
communities, responsible
consumption and production,
affordable and clean energy, life
on land and life below water.
Climate change
We recognise the critical
importance of addressing
climate change and are
committed to incorporating
sustainability and resilience
to our investment, operation
and management strategies.
We have a responsibility to
mitigate our carbon footprint
and ensure that our portfolio
is resilient to the impacts of
climate change. This year we
began to develop an overarching
Climate Change Policy which
focuses on achieving net zero
emissions, enhancing climate
resilience, and driving long-term
value for all our stakeholders.
Environmental
focus
Sustainable thinking, practical
solutions: reducing our emissions
Connected UN SDGs:
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Annual Report 2025
66
Key objectives in our Climate
Change Policy will include:
– Annual measuring and
reporting of our carbon
footprint
– Setting interim targets and
achieving net zero carbon
by 2040
– Identifying, reporting and
monitoring climate-related risk,
including both physical and
transition risks
– Developing and implementing
a clear climate change
adaptation and mitigation
strategy
– Alignment with international
climate agreements and
frameworks, including the
Paris Agreement and Task
Force on Climate-related
Financial Disclosures
– Regularly assessing and
disclosing climate risk and
opportunities in line with
best practice
Our Climate Change Policy is
expected to cover acquisitions,
refurbishments and the
operation and management
of our buildings and will be
underpinned by our net zero and
our climate resilience strategies.
Our 2040 net zero
commitment
In 2019 we defined our portfolio’s
baseline for carbon emissions
and mapped our pathway to
net zero in alignment with the
Better Buildings Partnership
Net Zero Carbon Pathway
Framework and The UK Green
Building Council’s (UKGBC)
net zero carbon hierarchy, with
our ambition set at becoming
net zero carbon by 2040.
As our knowledge of net zero
has evolved, this year we started
creating a more granular net zero
strategy across our portfolio.
Due to improvements in data
collection and data coverage, we
are considering a rebaselining of
our net zero carbon pathway.
Our net zero strategy is supported
by our sustainable refurbishment
guidelines which sit alongside our
work on building decarbonisation,
through increased solar
capacity, removal of fossil
fuel based systems and other
improvements to our buildings.
We recognise that using
resources efficiently has a positive
impact on the environment.
We continue to work with our
supply chain and operate within
our building refurbishment
guidelines to ensure a carbon
efficient programme of works.
This would enable us to apply
for validation of our interim
targets through the SBTi
framework if our evaluation
shows that this method is
appropriate for our business.
This year we have made good
progress on reducing our
absolute Scope 1 and 2 emissions
compared to our 2019 baseline,
and our portfolio’s energy
intensity has also decreased
significantly on this basis.
Our Scope 3 emissions are
where we have less control
and influence, however we
are focusing on improving our
data coverage and making
energy data collection more
efficient, as we cannot manage
what we cannot measure.
Initiative Approach Progress
1. Embodied carbon
Minimise the embodied
carbon cost of
developments, major
refurbishments and
occupier fit-outs.
Our sustainable
refurbishment guidelines set
out where we consider
whole life carbon
assessments.
During the year two whole
life carbon assessments were
carried out on projects that
exceeded £1.5 million.
2. Operational carbon
Ensure operational carbon
performance and
efficiency across the
portfolio is improved.
We have worked on
engaging with our occupiers
on automated data sharing
to streamline the energy
data collection process.
20% reduction in Scope 1 & 2
emissions compared to our
2019 baseline.
3. On-site generation
Maximise amount of
on-site renewable
generation.
Installation of solar panels on
our assets where feasible.
531 solar panels installed.
4. Renewables
procurement
Procure high quality
renewable energy.
No existing energy contracts
were due for renewal during
the period.
100% purchased electricity
is from REGO backed
renewable sources.
5. Offsetting
Acquire high quality
offsets to neutralise
residual emissions.
Once interim net zero target
setting has been finalised,
we will determine our carbon
offsetting strategy.
N/A
6. Third party verification
Maintain credibility and
transparency of our
emissions data.
Annual independent
third-party assurance
of energy data.
100% certification of energy,
water, and waste data by
third-party assurance.
We have continued to
make good progress on
the UKGBC principles
across our portfolio
as summarised above
with more detail on
pages 70 to 71
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Annual Report 2025
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Strategic
Report Governance
Financial
Statements
Additional
Information
Sustainable Thinking continued
Climate resilience
We are committed to ensuring
that our portfolio is resilient to
the impacts of climate change for
both physical and transition risks.
We incorporate sustainability and
resilience into our investment,
refurbishment and asset
management strategies.
We report annually in line with
the Task Force on Climate-related
Financial Disclosures (TCFD). Our
TCFD statement, which sets out
our approach to identifying and
managing climate-related risk,
can be found on pages 54 to 61.
We are in the process of
developing a Climate Resilience
Strategy in alignment with the
Better Buildings Partnership’s
(BBP) definition of climate
resilience, which will incorporate
the three BBP components of
climate resilience – mitigation,
adaptation and disclosure. We
intend to produce a BBP aligned
climate adaptation plan to
support our climate resilience
strategy and BBP commitments.
Our Climate Resilience Strategy
will aim to cover the following:
– Risk assessment, including:
– Physical risks: increased
frequency of extreme
weather events (e.g. floods,
heatwaves, storms)
– Transition risks: policy
changes, market shifts, new
regulatory requirements
related to carbon reductions
and our transition to net zero
– Adaptation: ensuring a robust
adaptation and mitigation
strategy to minimise risks from
climate impacts
– Business continuity and
disaster recovery planning to
ensure that our assets can
withstand and recover from
extreme weather events
– Stakeholder engagement
and disclosure, reporting
in line with TCFD
Water consumption
This year, we have been able
to benefit from the automatic
data collection readers
previously installed across
our multi-let portfolio.
This has led to greater accuracy
in data collection, and we now
collect 60% of our landlord
water data from these meters.
Furthermore, where automated
meter reading is not yet
installed, actual reads are taken
from the meters monthly.
Over the year, we have seen
a reduction in landlord water
consumption of 32% absolute
and 33% reduction in intensity.
This reflects the continued
improvement in data accuracy,
implementation of water
efficiency measures as well as
obtaining vacant possession of
certain assets prior to disposal.
Going forward, we will aim to
use building refurbishments
and our sustainability action
plans to improve water
efficiency across the portfolio.
Green lease clauses
Over the year we completed
61 lettings, lease renewals
and regears.
Of these, 97% by rental value
included our green lease clauses.
Of the remainder, 1% related
to car parking or open storage
land, 1% to residential leases
and 1% to flexible leases (where
the landlord retains control).
In order to remain aligned with
industry best practice, during the
year we updated our standard
green lease clauses, to align with
the Better Buildings Partnership’s
newly released guidance.
32%
Annual reduction
in landlord water
consumption
97%
New leases
contained green
clauses
Picton Property Income Limited
Annual Report 2025
68
Biodiversity
We recognise that we have
a role to play in conserving
and enhancing biodiversity.
Biodiversity is critical to
enhancing asset resilience,
protecting ecosystems,
encouraging regeneration,
and contributes to the health
and wellbeing of our occupiers.
We work closely with our property
manager to minimise any
negative impacts of our buildings.
We are in the process of updating
our Biodiversity Policy to set out
our approach and commitment
to protecting, enhancing and
sustainably managing biodiversity
within our portfolio, thereby
contributing to the protection
of ecosystems and promoting
environmental stewardship.
We are committed to taking a
natural capital approach, as we
recognise the fundamental value
of the natural environment for
our business and wider society.
We do not own land or undertake
new build development projects;
therefore, our direct impact is
currently limited to rooftops,
grass verges and other outdoor
spaces of a limited size. Our focus
is on raising awareness about
the importance of biodiversity
amongst stakeholders, integrating
biodiversity considerations into
our strategic decision-making
processes and asset-level
business plans and supporting
local restoration initiatives.
Waste statement
We recognise the importance of
sustainable waste disposal and
remain committed to eliminating
landfill waste disposal across
the portfolio. Where possible,
we are also incorporating waste
management clauses into our
standard lease form to encourage
occupiers to avoid sending waste
to landfill. In the coming year
we intend to publish our Waste
Statement, which will support
our Climate Change Policy.
Our waste management
approach covers both operational
and construction waste. We are
aligned to the waste hierarchy of
first reducing, then reusing and
recycling. We actively encourage
recycling programmes and
target zero waste to landfill in
landlord controlled areas.
We are committed to working
with our contractors, property
manager, occupiers and
waste suppliers to reduce,
reuse and recycle.
This year, we have again
successfully diverted 100%
of waste from landfill across
property management
activities, using either recycling
or heat recovery. Overall waste
generation reduced by 25% over
the year, which reflects improved
management practices across
our managed property assets.
Of the waste produced 73% was
recycled and 27% recovered.
We continue to engage with our
waste providers and occupiers
with the aim of improving
the sorting and filtering of
waste at our properties.
We have in place a partnership
with Youngwilders, a community
interest company who are
focused on biodiversity and
nature recovery-led projects.
Through working with
Youngwilders we are able to grow
our understanding of biodiversity
issues and make a positive
contribution through offering
financial support to rewilding
projects throughout the UK.
Although we do not carry out
developments, in relation to major
refurbishments and external
works, we follow the mitigation
hierarchy as detailed below:
– Avoid: engage with contractors
and relevant stakeholders to
develop strategies to avoid or
reduce impacts to biodiversity
during refurbishments
– Minimise: engage with
contractors to minimise the
impacts to biodiversity where
avoidance is not possible,
through amendments to
project designs
– Mitigate: engage with
contractors with guidance from
ecologists to compensate
impacts to biodiversity
– Offset: ensure any residual
impacts to biodiversity are
compensated on or off-site
100%
Waste successfully
diverted from landfill
73%
Waste recycled
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Financial
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Additional
Information
Sustainable Thinking: Net Zero Progress
Reducing our emissions:
from commitment to action
Sustainable asset
management is integral to
our business. As part of
our annual asset business
planning, we review
priorities and actions
in respect of energy
consumption, physical
risks arising from climate
change, opportunities to
remove fossil fuel-based
systems and install on-site
renewables and other
initiatives to achieve
progress towards net zero.
Engagement with our occupiers
is key and we start collaborative
discussions early to ensure
alignment. These discussions
can result in small interventions
that make a big impact,
including clever use of heating,
switching systems off when
not in use, better controls and
using the energy hierarchy.
Our sustainable refurbishment
guidelines are aligned
to our climate resilience
and net zero strategy.
Office Industrial
Key portfolio progress
Part first, and
whole third
floor, Tower
Wharf, Bristol
EPC C to B
50 Pembroke
Court,
Chatham
EPC C to A
Building 200,
Colchester
Business Park
EPC D to B
First floor,
Atlas House,
Marlow
EPC D to A
Unit 7V,
Madleaze
Industrial
Estate
EPC E to B
Unit 1, Sundon
Business Park,
Luton
EPC C to A
Unit A,
Riverway
Industrial
Estate, Harlow
EPC D to A
1. Reducing embodied carbon
Upgrade fabric and
building efficiency
Upgrading the fabric and efficiency
at our buildings at an appropriate time
in the lease event cycle such as a regear,
vacancy or new lettings.
7
projects with insulation
and fabric upgrades
Circular economy
Recycling and reusing furniture
across our portfolio.
3
fit-outs include
repurposed items from
other buildings
2. Reducing operational carbon
Remove gas and upgrade heating,
cooling and ventilation systems
Phasing out gas at buildings as part of
refurbishments and lease events, with 100%
of landlord-procured electricity REGO backed.
10
properties with space
subject to removal of gas
systems/replacement
of heating, cooling or
ventilation systems
Install energy efficient lighting
Using LED lighting across all of our
refurbishments, ensuring this is specified
upfront with our occupiers.
156,000
sq ft
LED lighting across
13 buildings
Improve building systems
Reviewing building management
systems and their control to maximise
energy efficiencies.
8
improvements
3. Increasing on-site generation
Solar PV installations
Installing solar panels, where feasible to
provide a source of sustainable energy for a
building, supporting our net zero targets as
well as financial benefits.
Focusing at our industrial assets where there
are larger available roof space and generation
considerations.
531
solar panels installed
266,565
kWh
estimated additional
annual generation
Electric chargers
EV chargers provide both sustainable and
enhanced amenities for our occupiers.
2
additional car charging
points installed this year
Scan or click here to read
more about our sustainable
refurbishment guidelines
Picton Property Income Limited
Annual Report 2025
70
Office Industrial
Key portfolio progress
Part first, and
whole third
floor, Tower
Wharf, Bristol
EPC C to B
50 Pembroke
Court,
Chatham
EPC C to A
Building 200,
Colchester
Business Park
EPC D to B
First floor,
Atlas House,
Marlow
EPC D to A
Unit 7V,
Madleaze
Industrial
Estate
EPC E to B
Unit 1, Sundon
Business Park,
Luton
EPC C to A
Unit A,
Riverway
Industrial
Estate, Harlow
EPC D to A
1. Reducing embodied carbon
Upgrade fabric and
building efficiency
Upgrading the fabric and efficiency
at our buildings at an appropriate time
in the lease event cycle such as a regear,
vacancy or new lettings.
7
projects with insulation
and fabric upgrades
Circular economy
Recycling and reusing furniture
across our portfolio.
3
fit-outs include
repurposed items from
other buildings
2. Reducing operational carbon
Remove gas and upgrade heating,
cooling and ventilation systems
Phasing out gas at buildings as part of
refurbishments and lease events, with 100%
of landlord-procured electricity REGO backed.
10
properties with space
subject to removal of gas
systems/replacement
of heating, cooling or
ventilation systems
Install energy efficient lighting
Using LED lighting across all of our
refurbishments, ensuring this is specified
upfront with our occupiers.
156,000
sq ft
LED lighting across
13 buildings
Improve building systems
Reviewing building management
systems and their control to maximise
energy efficiencies.
8
improvements
3. Increasing on-site generation
Solar PV installations
Installing solar panels, where feasible to
provide a source of sustainable energy for a
building, supporting our net zero targets as
well as financial benefits.
Focusing at our industrial assets where there
are larger available roof space and generation
considerations.
531
solar panels installed
266,565
kWh
estimated additional
annual generation
Electric chargers
EV chargers provide both sustainable and
enhanced amenities for our occupiers.
2
additional car charging
points installed this year
Picton Property Income Limited
Annual Report 2025
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Strategic
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Financial
Statements
Additional
Information
Sustainable Thinking continued
2024 2023 2022
GHG
Scope
Absolute
GHG
emissions
(tCO
2
e)
GHG
intensity
(tCO
2
e/m
2
)
Absolute
GHG
emissions
(tCO
2
e)
GHG
intensity
(tCO
2
e/m
2
)
Absolute
GHG
emissions
(tCO
2
e)
GHG
intensity
(tCO
2
e/m
2
)
Combustion of fuel and operation of facilities 1 1,155 0.021 1,161 0.019 1,132 0.019
Electricity, heat, steam and cooling purchased for own use 2 1,627 0.019 1,748 0.019 1,665 0.019
Head office premises 1 & 2 7 0.025 7 0.026 8 0.028
Total Scope 1 and 2 2,789 0.029 2,916 0.029 2,805 0.028
Business travel 3 4 N/A 9 N/A 3 N/A
Occupier data (electricity and fuel consumption) 3 3,777 0.019 9,309 0.032 9,664 0.033
Landlord water and treatment 3 11 0.0002 18 0.0002 21 0.0003
Landlord waste 3 2 0.00004 10 0.0002 16 0.0003
Total Scope 3 3,795 0.019 9,347 0.025 9,703 0.026
Total all Scopes 6,584 0.023 12,263 0.032 12,509 0.033
Please note some 2023 numbers are restated.
Data and certifications
In line with EPRA best practice,
we report energy usage data
on an absolute GHG emissions
(tCO
2
e) and GHG intensity
(tCO
2
e/m
2
) basis, both absolute
and like-for-like under Scopes 1, 2
and 3. Absolute data provides the
entire picture without taking any
changes to portfolio composition
into account, whereas like-for-
like data enables us to compare
usage across the same properties
year-on-year. Energy intensity
measures normalise consumption
by floor area to give a comparative
measure of efficiency.
Sustainability data collection
and quality continues to be
challenging for the industry as
a whole, and we are working to
improve the accuracy, timeliness
and transparency of our energy
usage data. Post-data assurance
and publication of our 2023
emissions data, revisions have
since been made to properties
where reconciliation identified
meter reading errors, therefore
requiring amendments to scoped
emissions. Changes have been
reflected in the table above.
We have defined our portfolio’s
baseline carbon footprint, using
2019 as the most representative
year, to map the emissions
reductions required to meet our
2040 target. Compared to our
2019 baseline, our total absolute
Scope 1 and 2 GHG emissions
decreased by 20% to 2,789 tCO
2
e.
This is inclusive of a reduction
of 4% compared to last year’s
consumption and accounts for
100% data from landlord supplies.
increased energy efficiency or
vacancy, were counterbalanced
by increased usage in other
offices, driven by rising occupier
footfall as activity continues
to rebound post-pandemic.
The sale of the Angel Gate
office village in London this
year contributed to a reduction
in absolute Scope 1 emissions.
However, this shift also led to
an increase in overall Scope 1
energy intensity, as the property
had been a low-intensity asset.
Reflecting this, our Scope 1 energy
intensity rose by 13% over the year.
Our like-for-like Scope 1
emissions for the period were
1,150 tCO
2
e, which is a 4%
increase on the previous year.
Scope 2
Compared to our 2019
baseline, 2024 was 29% lower
in terms of absolute Scope 2
emissions and 55% lower in
Scope 2 energy intensity.
For the 2024 calendar year,
absolute Scope 2 emissions
amounted to 1,627 tCO
2
e
(excluding head office), marking
a 7% decline compared to the
previous year. This average
masks variations at asset level.
Some of our multi-let offices saw
an increase in usage over the
year, offset by other locations
where building refurbishments,
energy improvement measures
and increased vacancy led to
reductions in Scope 2 emissions.
Our Scope 2 energy intensity
decreased by 5% over the year.
On an intensity basis our Scope 1 &
2 emissions have reduced by 48%
compared to the 2019 baseline.
We are working with our
occupiers to increase Scope 3
data coverage and are still in the
process of collecting data for the
2024 calendar year, therefore
we expect the collection rate to
increase ahead of the publication
of our Sustainability Data
Performance Report in June.
Across business travel, landlord
water and treatment and
landlord waste, we have seen
a 52% decrease compared
to the previous year.
Greenhouse gas
emissions
Scope 1
Relative to our 2019 baseline,
absolute Scope 1 emissions in
2024 were 1% lower, with Scope
1 energy intensity seeing a more
substantial reduction of 11%.
Although we have made progress
with removing fossil fuels from
the portfolio during the year, it will
take time for this to be reflected
as a reduction in our Scope 1
emissions, as these figures are
for January to December 2024.
For the 2024 calendar year,
absolute Scope 1 emissions
totalled 1,155 tCO
2
e, reflecting a
1% decrease from the previous
year. While this change appears
small overall, notable variations
occurred at the property
level, where reductions in gas
consumption at some of our
multi-let office buildings due to
11%
Reduction in Scope 1
intensity compared
to 2019 baseline
55%
Reduction in Scope 2
intensity compared
to 2019 baseline
4%
Annual reduction in
absolute Scope 1 & 2
emissions
Picton Property Income Limited
Annual Report 2025
72
Landlord waste has seen a 77%
decrease in emissions in the year,
largely due to the new emission
factors being published, however
we have been able to reduce
like-for-like waste by 19%.
Business travel is a very small
percentage of our Scope 3
emissions and has seen a
significant reduction of 52% for
the reporting year. This is largely
due to a decrease in air travel.
Methodology
We collect all our landlord-
controlled energy data via
automatic meter readings,
achieving 100% coverage to
date. The aim to is to eventually
reach 100% coverage for our
occupier consumption data.
All our large supplies work from
automatic meter reads, with
any void unit meter data being
aggregated to an asset level.
Landlord-controlled data is
meter read, and we only partially
estimated data for three sites.
We are working towards rolling
out automatic meter reads
across the portfolio to increase
coverage and reliability of our
data and reporting accuracy.
We have reported on all the
emission sources required under
the core requirements of EPRA
Best Practices Recommendations
and have voluntarily disclosed
business travel, occupier, and own
premises consumption emissions.
Our like-for-like Scope 2 emissions
for the period were 1,459 tCO
2
e,
a decrease of 10% compared to
the previous year. Key decreases
in energy consumption across
various sites were largely
driven by the adoption of
LED lighting, PIR sensors,
occupancy-based adjustments,
and refurbishment periods.
Scope 3
Due to the composition of our
portfolio, the majority of our
total GHG emissions are Scope
3 emissions from our occupiers,
therefore accurately recording
this data is key to our net zero
carbon strategy. Our data
collection strategy revolved
around utilising direct meter
readings as well as ongoing
engagement with our occupiers.
Our Scope 3 collection process is
continuing, and we will provide an
update within our Sustainability
Data Performance Report.
To date we have collected 55% of
the portfolio’s Scope 3 data. For
context, at the time of publishing
the 2023/24 Annual Report
we had collected 62% of our
Scope 3 data, which increased
to 78% when we published our
sustainability data in June 2024.
On an absolute basis, to
the end of April our Scope 3
emissions totalled 3,795 tCO
2
e.
Our like-for-like Scope 3
emissions for the period of the
data collected to the end of April
were 3,715 tCO
2
e, reflecting a
13% reduction on the prior year.
These figures will be updated as
further data is collected and will
be re-stated using assured data
in the GRESB and EPRA data
tables published in June 2025.
Landlord water and treatment
has seen a 39% reduction year-
on-year in absolute terms, with a
79% drop compared to our 2019
baseline. Due to metering issues
at Charlotte Terrace, London, we
have estimated using 2023 data
which accounts for 6% of total
landlord water consumption.
An operational control approach
has been adopted and all our
properties are included. Figures
presented are absolute for utility
and waste consumption and
relate only to landlord-obtained
utilities and waste removal.
Occupier obtained consumption
is included where possible. We
have calculated and reported our
emissions in line with the GHG
Protocol Corporate Accounting
and Reporting Standard (revised
edition) and used emission
factors from UK Government’s
GHG Conversion Factors for
Company Reporting 2024. Across
all metrics aside from business
travel, the emission factors
for all utilities have reduced
when compared to last year.
We continue to report on a
calendar year basis to ensure
there is sufficient time to collect
occupier consumption data.
We have calculated our intensity
measurements based on the
area served by each meter, for
example whole site, common area
or a specific floor within an asset.
So that an accurate comparison
can be made between reporting
years, this approach has been
backdated to 2019 figures.
We have continued to voluntarily
report on Scope 3 vehicle
emissions. Vehicle emissions
were calculated using our
vehicle expenses reports and
the vehicle emission factors
from the UK Government
GHG Conversion Factors for
Company Reporting 2024.
Year-on-year, we will continue
to update previous reported
figures if applicable to remove
estimates and ensure actual
data is captured and reported.
We occupy a floor within one of
our assets under management
and as such, have apportioned
out our consumption based on
floor area, and this is reported
as a separate line item.
55%
Scope 3 data
collection to date
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Strategic
Report Governance
Financial
Statements
Additional
Information
Portfolio EPC rating (% of ERV)
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Mar
2020
Mar
2021
Mar
2025
Mar
2024
Mar
2023
Mar
2022
G
F
E
D
C
B
A
A-B
A-C
Sustainable Thinking continued
Asset type
Green building
certification 2024
1
Office 39%
Industrial, Business Parks 21%
Industrial, Distribution Warehouse 29%
Hotel 0%
Leisure 0%
Retail High Street 0%
Retail Warehouse 0%
% of total portfolio 23%
1. By floor area.
Head office
We started collecting and
reporting our head office data in
2016, and while it is only a small
part of our overall footprint, we
believe it is important to provide
a holistic view where possible.
Our office is located on a floor
within Stanford Building, London,
which is one of our own assets.
This is a refurbished space,
providing the latest technology
and energy efficiency measures.
This has allowed us to obtain
more reliable data. In turn, we
have optimised our office heating/
cooling and lighting systems to
minimise our emissions. Over the
year our head office emissions
decreased by 4% on both an
absolute and intensity basis.
Building certifications
Whilst our net zero carbon
pathway is focused on
reducing carbon emissions,
we also recognise the value
of building certifications to
provide third party validation.
We have two certified office
buildings in our portfolio, at
Metro, Manchester and Tower
Wharf, Bristol, which were both
awarded BREEAM ‘Excellent’
when they were constructed.
Further to this and recognising
the importance of promoting
sustainable travel choices, we
have undertaken Active Score
and Mode Score certifications
(which measure provision of
Active Travel) at three office assets
and three industrial assets.
Looking ahead, we will consider
undertaking further BREEAM
or NABERS assessments at
assets where appropriate.
Minimum Energy
Efficiency Standards
(MEES)
Our portfolio is 100% compliant
with the 2023 MEES of EPC E
or above. In addition, 83% of
our portfolio, 77% of industrials,
90% of offices and 91% of retail
and leisure would already
meet the April 2028 MEES
compliance of EPC C or above
if this were to come into effect.
As we progress our net zero
strategy, we will continue to
improve the EPC profile of the
portfolio, using lease events,
common area works and
EPC renewals to implement
improvement works with
the overall aim of continually
improving our EPC score.
Over the year, we reassessed
40 EPCs. Using the same
reporting basis as above, 99%
have been reassessed to an
A–C rating, 1% to a D and none
were rated E or below. The
weighted average score of the
EPCs completed in the year
improved from a C to a B rating.
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74
Social
impact
This year we have developed
a Social Impact Policy.
Connected UN SDGs:
Our new Social Impact Policy
sets out our approach to all
stakeholders. This was previously
covered by individual policy
documents including: Charitable
Giving and Community and
Social Value. We place a strong
emphasis on the wellbeing of
our occupiers, employees and
the wider community, and
work with suppliers that are
aligned with our ESG priorities.
Occupier engagement
Core to our purpose is helping our
occupiers’ businesses succeed,
from providing high quality
buildings and amenities, to
our responsiveness in property
management/maintenance
services. Understanding our
occupiers’ evolving requirements
and working collaboratively
to reduce our environmental
impact and increase the
attractiveness and demand
for our buildings is key.
Our Picton Promise sets out our
five key commitments to our
occupiers: Action, Community,
Technology, Support and
Sustainability. These sit at the
core of our engagement strategy
as we look to build longstanding
relationships with them.
We have continued to evolve
our occupier engagement
strategy this year. Our occupier
app is an integral part of this
and has proven to be a popular
way for our office occupiers to
meet, share ideas and promote
their businesses within the
community. In 2024 the number
of our occupiers staff using the
app grew to nearly 1,600 which
is a 47% increase from 2023.
Additional
Information
Financial
StatementsGovernance
Strategic
Report
75
Picton Property Income Limited
Annual Report 2025
Sustainable Thinking continued
During the year we organised
several popular events at our
office buildings including:
– Wellness classes
– Cycling workshops
– A plastic free workshop
(in conjunction with one
of our occupiers, Lush)
– Summer social events
– Alzheimer’s Society fund raising
– Guide dog visits
–
Charity Christmas present appeal
Occupier retention
Our high retention rate reflects
our proactive approach to asset
management and engagement
with our occupiers. During the
year a total ERV of £6.4 million was
at risk due to breaks or expiries in
line with the previous year. Of the
ERV at risk in the year, we retained
66% through lease renewals
or removal of break options.
Occupier survey
In November 2024 we undertook
our annual occupier survey for
our multi-let office and industrial
occupiers. The year-on-year
increase in response levels has
continued and the number of
people who would recommend
Picton as a landlord was 88%.
Questions were asked on the
satisfaction of the location,
landlord, responsiveness
and service levels and there
was an 80% increase in the
number of people who
were satisfied or extremely
satisfied in these categories.
All individual comments and
building specific issues raised in
the survey have been promptly
acted upon and followed up
through direct communication
with the occupiers by our
managing agents and Head of
Occupier Services. The valuable
feedback we obtain from these
annual surveys helps continue
to shape our ongoing occupier
engagement strategy.
In 2025 we plan to:
– Expand the scope of our events
focusing on the topics which
our occupiers say are popular
such as health and wellness
workshops, networking sessions,
arts and crafts workshops and
fundraising events
– Trial our occupier app at two
of our multi-let industrial
properties
– Roll out more TV screens in our
office receptions to be used as
a communication point with
building occupiers and visitors
– Promote our sustainability
objectives by sharing more
information about energy
consumption and ways to
reduce it
Occupier health and safety
We are committed to making
our buildings a healthy and safe
environment for our occupiers
and their visitors, our employees,
contractors, and the public. We
therefore ensure that they comply
with the relevant health and
safety legislation and guidelines.
Our Health and Safety Committee
meets every other month and
reviews all aspects of health
and safety across our portfolio
and in our own office. The
Committee reports directly to
the Executive Committee and
health and safety is a standing
item on the Board’s agenda.
Our health and safety record
continued to be strong during
the year with no reportable
accidents, near misses or other
health and safety incidents.
We were 99% compliant in all
critical and secondary health
and safety documentation.
I love the events.
It brings us together.
The offices have
started interacting
because of it, especially
in a time when
community is needed
to hold us together.
Medallia
Stanford Building,
London
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76
During the year, we made the
following progress in health
and safety:
– Our team undertook training
in asbestos management,
fire safety and first aid
– We appointed new health and
safety consultants to provide
advice on business/
accommodation matters.
This gives us access to more
extensive health and safety
material and support for
developing Company
procedures if needed
– We implemented the
recommendations of the risk
review issued in early 2024
– We completed a RAAC review
of our portfolio which
concluded that there were
no properties of concern
In 2025, we plan to:
– Refresh our asbestos
management training
– Increase the number of fire
wardens in our team
– Review our homeworker
assessments and undertake
any actions required
– Carry out various health and
safety related works across the
portfolio including façade
repairs and fire alarm
replacements
– Utilise the training material our
new health and safety advisers
provide to expand the team’s
knowledge where needed
Employee engagement
We are a small team but have
a strong and open Company
culture with shared values co-
created by our employees. We
value the contributions made
by the whole team and aim
to nurture a positive working
environment. During the year we
engaged with all employees on a
review of our values at our annual
offsite to foster an inclusive
culture and way of working.
We also engage with our
employees through annual
surveys, appraisals, training,
committee membership and
regular updates on the business.
In addition, Helen Beck, one of
our Non-Executive Directors is our
designated Director for employee
engagement, having replaced
Maria Bentley earlier in the year.
We conducted our annual
employee survey in March
2025 using a third party
to anonymously collate
responses on both qualitative
and quantitative areas such
as personal development,
training, culture and values,
motivation and career progress.
The overall employee satisfaction
was 76%, which although still a
high score, was lower than 86%
in 2024. The Board recognises
this and will be working with the
team to understand this further
and take action to improve this.
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77
Strategic
Report Governance
Financial
Statements
Additional
Information
Key focus areas within our
employee engagement
are noted below:
1. Supporting diversity, equity
and inclusion
We are committed to building
an inclusive workplace where
everyone is treated with fairness
and respect. We encourage input
from all staff and collaboration.
This year we have developed our
Diversity and Inclusion Policy,
which outlines our dedication
to promoting diversity across
all levels of the business and
ensures a culture of inclusion in
every aspect of our operations.
Our policy includes the key
principles of equal opportunity
employment, inclusive
recruitment and hiring practices,
diversity in leadership, training
and education, a flexible and
inclusive working environment,
and zero tolerance for
discrimination and harassment.
2. Promoting wellbeing
We want our employees to
thrive at work and a happy
and healthy team is important
us. In particular we have:
– Flexible working arrangements
and family friendly policies
– Holiday purchase and other
special leave arrangements
– A high standard of health and
safety including appropriate
equipment and workplace
assessments
– Ensuring employees can report
inappropriate behaviour or
concerns through the
whistleblowing guidance
– Comprehensive private medical
cover with health assessments
The absentee rate for the
year was 1.3%. There were
no fatalities or work-related
injuries during the year.
3. Progression, training and
development
We hold annual and mid-year
reviews with all employees
and encourage training and
development. Training and
development needs are a
mix of internal and external
training courses, structured
‘on-the-job’ experience and
through interaction with
professional colleagues.
This year we introduced
regular internal Lunch and
Learn sessions to facilitate
internal knowledge sharing as
well as formal online training
modules on GDPR, modern
slavery and cyber security.
In addition, we have a study
leave allowance of a maximum
of 15 days per annum, as well
as supporting professional
memberships to bodies such
as the RICS, ICAEW and the IPF.
4. Reward and recognition
Remuneration is aligned
to personal and Company
performance, with all employees
eligible for the Deferred Bonus
Scheme and Long-term Incentive
Plan. These schemes support
alignment between the Company
and employees, as employees
are rewarded when their
contribution results in a positive
outcome for our stakeholders.
All employees are entitled to
receive pension contributions
up to 15% depending on
length of service.
5. Recruitment and retention
We have a low level of turnover
and a small team. The average
length of service is six years
and there are length of service
awards every five years, granting
employees an additional five
days of leave after each five
years of service. Employee
turnover was flat compared
to the last financial year with
one leaver and one joiner.
Sustainable Thinking continued
83%
Of employees
recommend Picton
as a place to work
580
Training hours
100%
Of staff eligible
for employee
share scheme
6 years
Average length
of service
(1 person left and
1 person joined)
33%
Of our Board
are women
40%
Of our team
are women
Picton Board Rest of team Total
Male 4
Female 2
Male 6
Female 4
Male 10
Female 6
Scan or click here to see
our Diversity and Inclusion
Policy on our website
Picton Property Income Limited
Annual Report 2025
78
Community engagement
As a responsible owner of
commercial property, we are
committed to maximising the
social value we deliver to our
stakeholders, communities, and
wider society and providing
places which improve quality
of life, enhance wellbeing,
and generate a positive social
outcome, whilst minimising
any negative impacts our
buildings have on society
and the environment.
We encourage our employees
to get involved with charitable
fundraising events and we grant
an additional one day of leave
to participate in such events.
1. Community engagement
programme
Building
coverage
(assets)
Office 100%
Retail, High Street 100%
Retail, Warehouse 100%
Industrial, Business
Parks 100%
Industrial, Distribution
Warehouse 100%
Hotel 100%
2. Charitable giving
This year, we supported
15 charities and donated a
total of £26,000. We support
charities through matched
giving schemes and long-
standing charity partnerships.
Our employees are invited to apply
for a contribution to fundraising
efforts through matched giving.
This year eight members of the team
walked the Chilterns Ridgeway in
celebration of our former Finance Director,
Andrew Dewhirst who retired during
the year. A total of £6,000 was raised,
with another £6,000 matched by Picton.
The funds were divided amongst six
charities chosen by the team, all of which
work to make a difference in the lives
of countless individuals: Cardiac Risk in
£6,000
Raised by the
team ramble
£6,000
Matched giving
by Picton
£2,000
Raised in aid of
Royal Marsden
6
Supported
charities through
matched giving
the Young, Katherine Low Settlement,
The Royal Marsden Cancer Charity, MS
Society, London’s Air Ambulance Charity
and The Ehlers-Danlos Support UK.
Our Chief Financial Officer Saira Johnston
also ran 1,200 kilometres in 2024 in aid
of The Royal Marsden. Picton supported
through its employee matched giving
and over £2,000 was raised in total.
Employee fundraising
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Strategic
Report Governance
Financial
Statements
Additional
Information
Sustainable Thinking continued
Supplier engagement
We are committed to conducting
our business in a fair and honest
manner. We aim to ensure that
our suppliers also operate in
an ethical way and share our
business principles in observing
relevant laws and regulations.
We recognise that there are
certain activities within the
real estate sector that are
more susceptible to modern
slavery risks, including
construction, cleaning and
building maintenance.
We are committed to working
with suppliers whose values
align with ours.
Our key priorities during
the year have included:
– Supplier review: we have carried
out a review of our supplier
base and categorised the
suppliers which may be of
higher risk
– Supplier Code of Conduct: for
our key suppliers within our
construction supply chain,
we have shared our code
of conduct, which sets out
obligations, in respect of social,
ethical and environmental
compliance. It specifically
includes the requirements
in respect of child labour,
forced labour, working hours
and payments
– Property management: we
continue to work closely with
our property manager who is
RICS accredited. They issue
annual Modern Slavery and
Human Trafficking statements,
and require their suppliers
to comply with their code
of conduct
– Training: the team are required
to undertake mandatory
Modern Slavery training.
For more information, see our
Modern Slavery Statement
on our website.
Occupier matched giving
Our occupiers are invited to apply for a donation of
up to £100 per year to boost their fundraising efforts
for a registered UK charity. In addition, for completing
our occupier survey, we donate £5 for every response.
This year we donated £785 to Coram.
£785
Donated to Coram via occupier survey
Charity partnerships
We continue to support The Funding Network,
Coram, The Fostering Network, Future Youth Zone
and Youngwilders, through our established charity
partnerships. We do this through providing regular
funding, volunteers and event spaces where required.
We also continue to support LandAid annually
through their Christmas appeal.
15
Charities supported
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Annual Report 2025
80
Governance
This year we have defined our
ESG Governance Policy which
sets out how ESG is integrated
within our governance structure.
Connected UN SDGs:
The key components are:
1. Board responsibility
The Board has overall
responsibility for ESG strategy
and governance, which includes:
– Approving and overseeing the
implementation of ESG policies
– Reviewing reporting to monitor
compliance with ESG
regulations and reporting
obligations
– Reviewing ESG risks as part of
the Group’s overall risk
management framework
Progress reports on ESG initiatives
are presented at Board meetings,
and in addition, one of the Non-
Executive Directors, Helen Beck
has oversight of sustainability
matters on behalf of the Board.
Helen liaises with management
at a more detailed level, attending
meetings of the Responsibility
Committee at least annually and
when considered appropriate.
2. Responsibility Committee
Day-to-day responsibility
for ESG matters has been
delegated to the Executive
Committee, which includes
the two Executive Directors. To
provide dedicated oversight on
our ESG priorities, the Executive
Committee has established a
Responsibility Committee which
is chaired by the Chief Financial
Officer, with membership
from across the business.
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Strategic
Report Governance
Financial
Statements
Additional
Information
Sustainable Thinking continued
The Committee’s responsibilities
include:
– Development of ESG policies
and strategies
– Monitoring progress towards
ESG goals, including
environmental targets, social
impact, and governance
improvements
– Monitoring compliance with
ESG regulations and reporting
obligations
– Integrating ESG principles into
investment decisions and
property management
– Advising the Board on
emerging ESG trends and
regulations, with input from
third parties as relevant
– Overseeing the Company’s
sustainability reporting and
ESG disclosure practices
– Oversight of the Climate Action
Working Group
3. Climate Action Working Group
The Climate Action Working
Group has been established
with responsibility for the
implementation of relevant
ESG policies and strategies
across the portfolio.
The Climate Action Working
Group is also responsible for
identifying risks and escalating
these to the Responsibility
Committee; and promoting active
engagement with stakeholders,
including occupiers, contractors,
managing agents and local
communities, as appropriate,
to support the transition to
a low carbon and climate-
resilient real estate portfolio.
The Chief Executive chairs the
Climate Action Working Group,
which includes representatives
from the asset management
team, and provides regular
updates on progress to the
Responsibility Committee.
3. GRESB
We have been reporting to GRESB
since 2017. Our score for 2024
improved to 81 and remained
at three green stars. We scored
ahead of the GRESB average
in each of the Environmental,
Social and Governance
categories, and overall.
4. Data management
We are committed to the
responsible and secure
handling of data and our data
management practices adhere to
relevant regulatory requirements.
We continue to work with
our property managers and
occupiers to improve the quality
of emissions data collected. In
addition we have conducted
a review of our purchased
goods and services Scope 3
emissions in order to better
understand where we need
to focus in our supply chain.
We have data sharing agreements
across the portfolio and receive
energy data automatically. We
expect the occupier collection
rates to increase as we finalise the
collection and assurance process.
4. External advisers and
stakeholders
We are committed to ensuring
that our ESG practices align
with industry best practice and
stakeholder expectations. We
therefore seek input from external
ESG advisers and consultants,
as appropriate, and through
stakeholder engagement
with our shareholders,
occupiers, employees and
local communities to identify
and respond to ESG issues.
Reporting and
disclosures
We recognise that it is important
to be transparent on sustainability
issues, so that our stakeholders
can make informed decisions.
Our ESG approach is aligned
to, and we report within, the
following frameworks:
1. Better Buildings Partnership
The Better Buildings Partnership
(BBP) is a collaboration of
the UK’s leading commercial
property owners.
We are a signatory to the BBP
Climate Commitment and
adopt the BBP’s definition
of climate resilience.
We have continued to report
our portfolio’s energy data in the
BBP Real Estate Environmental
Benchmark and follow their
guidance on green lease clauses
to align leases with the Better
Buildings Partnership Green
Lease Essentials. Green leasing
continues to be an important tool
to enable us and our occupiers
to improve the performance of
building and data collection.
2. EPRA
We have continued to report
in line with EPRA Sustainability
Best Practice Recommendations
maintaining our Gold award
for our 2024 reporting.
97%
New leases
containing green
clauses
EPRA gold
GRESB rating
Scan or click here to
read more in our online
Sustainability Data
Performance Report
Picton Property Income Limited
Annual Report 2025
82
Risk management
ESG risks are integrated into
the Group’s broader risk
management framework.
This includes identifying and
mitigating risks related to climate
change, regulatory changes,
and corporate governance. The
Responsibility Committee will
review and update the ESG
element of the risk register for
onward reporting to the Board.
For more information please
see Principal Risks on page 49
Ethical conduct
Our Anti-Bribery policy sets out
our commitment to maintaining
the highest standards of integrity,
transparency and ethical conduct.
We operate in compliance with
the Bribery Act 2010, and have
in place effective and adequate
procedures to manage the risk of
bribery, corruption, or improper
payments in all our business
activities. These are set out in the
Employee Handbook and the full
policy is available on our website.
Scan or click here to read
our Anti-Bribery Policy
Picton Property Income Limited
Annual Report 2025
83
Strategic
Report Governance
Financial
Statements
Additional
Information
The Board operates with
an established and robust
governance framework,
which continues to promote
the long-term sustainable
success of the business.
The year in review
During the year, the Board
has continued to focus on
repositioning the portfolio
to generate improved return
prospects. This supported
earnings growth and a 5.7%
dividend increase in May 2024.
Three repositioned office assets
were disposed of, which reduced
our office exposure and generated
£51 million of disposal proceeds.
The Board reviewed capital
allocation priorities to ensure
that the use of these disposal
proceeds delivers Company
and shareholder performance.
We have reduced leverage
by repaying the revolving
credit facility, reinvested in the
portfolio and returned capital
to shareholders through our
share buyback programme
announced in January 2025.
In response to the continued
disparity in the Company’s share
price compared to its net asset
value, which the Board believes
materially undervalues the
Company, in January 2025, the
Board approved a share buyback
programme, under the authority
granted by shareholders at last
year’s AGM. The proceeds from
the disposals referred to above
were used both to buy back
shares and to invest in upgrading
assets within the portfolio.
The Board was also kept
updated throughout the year on
management’s focus on improving
operational efficiencies and
delivering on our sustainability
priorities, which included
appointing new sustainability
consultants during the year.
Board composition
and diversity
The Board and Nomination
Committee have been
focused on smooth
succession during the year.
Saira Johnston succeeded
Andrew Dewhirst as our Chief
Financial Officer, joining the
Board on 1 April 2024. Saira’s
finance experience has already
benefitted the Company in
maintaining our focus on
earnings growth and a disciplined
approach to capital allocation.
In July 2024, Maria Bentley
stepped down from the
Board after our AGM and we
welcomed Helen Beck as a
Non-Executive Director and
Chair of the Remuneration
Committee on 1 August 2024.
Helen is now the Board’s
representative on sustainability
and is the designated Director
for employee engagement.
Helen’s background in human
resources and remuneration,
together with her listed and
sustainability experience,
complements our current
Board skills and she has already
made a significant contribution
to Board discussions on a
wide range of matters.
Following Lena Wilson’s decision
in October 2024 to step down as
Chair, with effect from 31 January
2025, I was delighted to accept
the Board’s offer of appointment
to the Board as Chair.
I would like to take this
opportunity to thank Lena for
her significant contribution
over the last four years.
Chair’s Introduction
Dear Shareholder – As new Chair of
Picton, I am delighted to introduce our
2025 Corporate Governance Report.
Picton Property Income Limited
Annual Report 2025
84
Our Board skills matrix is set out
on page 87 and the Nomination
Committee reviews this annually
as part of its discussions on
longer-term succession plans
and the evolution of skills
as required over time.
All of our Directors are committed
to having a Board which is diverse
in all respects, and throughout
the year, until my appointment
on 1 February 2025, the Board
met all three of the FCA’s listing
requirements on gender and
diversity. The Board is mindful of
the FCA’s listing requirements
on gender and diversity and will
have the opportunity to consider
this for the next appointment,
which is likely to be as Mark
Batten steps down at the end
of his nine-year tenure. By way
of background, prior to my
appointment, the last three Board
appointments were female.
Our stakeholders
The Board recognises that
understanding the views of our
stakeholders is critical to the long-
terms success of the business
and details of how we engage
are set out on pages 96 to 99.
At the start of my appointment,
I was pleased to have the
opportunity to meet with
our largest shareholders and
welcomed their feedback, which
I shared with the Board and this
also fed into the discussions at our
Board strategy day held in mid-
March. In addition, there has been
a full programme of shareholder
engagement led by Michael
and Saira, throughout the year.
Our occupier focused approach
continues to be embedded
within our purpose, values and
business model. In line with
previous years, occupier surveys
were carried out at the end of
2024, for our industrial assets and
our multi-let offices. The Board
has reviewed the overall results
which were very pleasing and
the valuable feedback received
will be used to help shape our
engagement strategy in 2025.
Further details can be found on
pages 75 to 76.
Board Performance
Review
This year, our Board performance
review was carried out internally.
The Board considered the review
findings and recommendations
for improvement, concluding
that overall it was satisfied
with its own performance and
that the Board Committees
continue to operate effectively.
Further details are provided in the
Nomination Committee Report.
Annual General Meeting
Our Annual General Meeting was
held in July 2024. In addition to
the routine business considered
each year, shareholders were
asked to approve our new
Directors’ Remuneration Policy
and new Articles of Incorporation
for the Company. I am pleased to
report that all resolutions were
approved, with at least 97% of
votes in favour, and I would like
to thank our shareholders for
their support. Our forthcoming
AGM will be held in July 2025.
UK Corporate
Governance Code
Picton was subject to the 2018 UK
Corporate Governance (the ‘Code’)
for the year ended 31 March 2025
and our Statement of Compliance
with the Code is set out within
the Directors’ Report on page 131.
I am pleased to report that we
have fully complied with the Code
this year and details of how the
Board and the Committees have
complied with the Provisions
and applied the Principles of
the Code are described in this
and the following sections of the
Corporate Governance Report.
We have also commenced our
preparations for the changes
introduced in the 2024 UK
Corporate Governance Code.
Reporting
I am pleased that last year’s
Annual Report and sustainability
reporting both maintained
EPRA Gold awards, reflecting our
aim to report our activities and
results clearly and concisely. In
line with previous years, we will
publish all of our sustainability
data in a separate report online,
which will be available shortly.
Conclusion
I would like to thank everyone at
Picton for their warm welcome
and support since I joined the
Board at the start of the year.
I would also like to take this
opportunity to recognise
the team’s hard work and
commitment over the year
and to thank them for their
continued efforts to ensure the
future success of the business.
Francis Salway
Chair
21 May 2025
Our occupier focused
approach continues to be
embedded within our
purpose, values and
business model.
Picton Property Income Limited
Annual Report 2025
85
Strategic
Report Governance
Financial
Statements
Additional
Information
Governance at a Glance
Focus areas for 2024/2025
/Shareholder value
/Asset repositioning strategy
/Capital allocation
/Continued earnings growth
/Board composition
and succession
Key priorities for 2025/2026
/Shareholder value
/Capital allocation
/Continued earnings growth
/Board succession
Compliance with the UK
Corporate Governance
Code 2018 (the Code)
The Company complied with the
relevant provisions set out in the
2018 version of the Code, which
applied throughout the financial
year ended 31 March 2025.
The Code is available on the FRC’s
website: www.frc.org.uk. Further
detail on how the Code principles
have been applied can be found
on the pages set out here.
Board leadership and Company purpose
84–85 Effective and entrepreneurial Board
promoting long-term sustainable
success of the Company
92 Alignment of our purpose, values
and strategy with our culture
100 Governance framework and
decision-making
96–99 Stakeholder engagement
77–78 Alignment of workforce policies
and practices with our values
Division of responsibilities
100 Leadership of an effective Board
101 Division of responsibilities and
Directors’ independence
93, 105 External appointments and conflicts
93–95 Effective and efficient functioning
Board and Board resources
Composition, succession and evaluation
105–106 Board appointment process
and succession planning
87–89 Directors’ skills, experience
and knowledge
107–108 Annual Board performance review
Audit, risk and internal control
111–113 External and internal audit
effectiveness and integrity
of financial reporting
111–113 Fair, balanced and understandable
assessment of Company’s position
109, 112 Effectiveness of risk management
and Internal control framework
Remuneration
117–123 Remuneration policies and practices
aligned to purpose and values,
supporting our long-term strategy
122–123 Remuneration Policy
124–128 Exercise of independent judgement
in respect of 2024/25 performance
outcomes
Picton Property Income Limited
Annual Report 2025
86
Francis Salway
Mark Batten
0 1 2 3 4 5 6 7
8
Helen Beck
Richard Jones
50% 33%
Director changes
1 February 2025 – Francis
Salway appointed to the Board
as Chair of Picton replacing
Lena Wilson, and as Chair of
the Nomination Committee.
1 August 2024 – Helen
Beck appointed to the
Board and as Chair of the
Remuneration Committee
replacing Maria Bentley.
1 April 2024 – Saira Johnston
appointed as Chief Financial
Officer and joins the Board
as Executive Director.
Governance at a glance
Board independence
as at 31 March 2025
Demonstrating our skills
The skills matrix shows the level of expertise of our Board across a range of disciplines.
Skills
Francis
Salway
Mark
Batten
Helen
Beck
Richard
Jones
Michael
Morris
Saira
Johnston
Leadership and strategy
Real estate
Accounting/finance and risk
Remuneration
People, talent and culture
Other listed Board experience
Corporate finance
Governance
CEO or other operational experience
Sustainability
Board gender balance
as at 31 March 2025
Board tenure
Non-Executive Director average tenure
as at 31 March 2025
3.2 years
Board and Committee attendance
as at 31 March 2025
99%
Independent 3
Non-independent 2
Chair 1
Male 4
Female 2
For more information
about the Board and
its activities:
Board of Directors
pages 88 to 89
Leadership and
Purpose pages 92 to 99
Additional
Information
Financial
StatementsGovernance
Strategic
Report
Picton Property Income Limited
Annual Report 2025
87
Francis Salway
Non-Executive Chair
N
P
R
Appointed to the Board
February 2025
Responsible for ensuring the Board is
effective in setting and implementing
the Company’s direction and strategy
including reviewing and evaluating the
performance of the Chief Executive.
Key strengths and skills
– Extensive property and investment
experience through both executive
and non-executive roles
– Experienced Chair, SID and CEO, having
led a FTSE 100 real estate company
Previous experience and appointments
– Chief Executive of Landsec
– Non-Executive Director and Senior
Independent Director of NEXT plc
– Non-Executive Director of Peabody
Housing Association
– Chair of Town and Country Housing
Principal external commitments
– Non-Executive Director of
Watkin Jones plc
– Non-Executive Director of
Cadogan Group Limited
Mark Batten
Non-Executive Senior
Independent Director
A
N
P
R
Appointed to the Board
October 2017
Responsible for financial reporting
and accounting policies, audit strategy
and the evaluation of internal controls
and risk management systems.
Key strengths and skills
– Chartered Accountant and restructuring
specialist
– Extensive experience in banking,
insurance, real estate, debt structuring
and restructuring
– Broad real estate knowledge, covering
most sub-sectors
Previous experience and appointments
– Partner, PricewaterhouseCoopers LLP
(restructuring and corporate valuation
practices)
– Non-Executive Director, L&F Indemnity
– Senior adviser, UK Government
Investments
– Non-Executive Director and Chair of the
Finance Committee, Royal Brompton
and Harefield NHS Clinical Group
Principal external commitments
– Chair, Assured Guaranty UK Limited
– Non-Executive Director, Assured
Guaranty Ltd.
– Senior Independent Director and
Chair of the Audit and Risk Committee,
Weatherbys Bank Limited
– Chair, Governing Body,
Westminster School
– Non-Executive Director of Reliance
National Insurance Company
(Europe) Limited
Helen Beck
Non-Executive Director
A
N
P
R
Appointed to the Board
August 2024
Responsible for leading on the
recommendation of remuneration policies
and levels, employee engagement
and Board lead on sustainability.
Key strengths and skills
– Extensive expertise in human resources
– Over 25 years’ experience in financial
services, particularly in remuneration
design and regulation
Previous experience and appointments
– Non-Executive Director of Ashmore
Group plc and Chair of the
Remuneration Committee
– Partner at Deloitte, Head of Financial
Service Remuneration Practice
– Partner at Kepler Associates Ltd
– Global Head of Reward at
Standard Bank
– Senior executive roles at McLagan
Partners Inc
Principal external commitments
– Non-Executive Director and
Chair of the Remuneration Committee
of Funding Circle plc
– Governor of the University
of Bedfordshire
– Independent member of The British
Olympic Association’s Remuneration
Committee
We have the relevant skills and
experience for future growth.
Board of Directors
Picton Property Income Limited
Annual Report 2025
88
Richard Jones
Non-Executive Director
A
N
P
R
Appointed to the Board
September 2020
Responsible for overseeing the review
of the quarterly valuation process
and making recommendations
to the Board as appropriate.
Key strengths and skills
– Significant real estate investment
experience
– Broad experience of property asset
management
– Extensive experience of property
valuation
Previous experience and appointments
– UK Managing Director on Aviva
Investors’ Global Real Estate Board
– Special Director, Ribston UK Industrial
Property Unit Trust
– Non-Executive Director, Royal
Brompton and Harefield Hospital NHS
Foundation Trust
– Transport for London’s Commercial
Property Advisory Group
Principal external commitments
– Investment Committee, Henley
SecureIncome Property Unit Trust
– Investment Committee, Henley
Secure Income Property Unit Trust II
– Special Advisor, Clearbell UK
Strategic Trust
Michael Morris
Chief Executive
Appointed to the Board
October 2015
Responsible for overall strategic
direction and execution of the
Group’s business model.
Key strengths and skills
– Successful track record of driving
investment strategy and delivering
results for shareholders
– Proven leadership skills
– In-depth understanding of real estate
equity capital markets
Previous experience and appointments
– Over 30 years’ wide-ranging commercial
real estate market experience
– Senior Director and Fund Manager, ING
Real Estate Investment Management
Principal external commitments
– None
Saira Johnston
Chief Financial Officer
Appointed to the Board
April 2024
Responsible for strategic financial
planning and reporting for the Group
and all operational matters.
Key strengths and skills
– Chartered accountant with
over 20 years’ experience in finance
and management roles
– In-depth knowledge of financial
services, capital markets and
real estate funds
– Expertise in debt and equity financing
Previous experience and appointments
– Chief Financial Officer, Gravis Capital
Management Limited
– Group Financial Controller,
Moorfield Group
– Director of Finance, CBRE Global
Investors/ING Real Estate
– Investment Controller, Morgan Stanley
Real Estate Fund
Principal external commitments
– None
The Board is responsible for the long-term success of the
business, providing leadership and direction with due regard
and consideration to all stakeholders in the business.
Committee key
A
Audit and Risk Committee
N
Nomination Committee
P
Property Valuation Committee
R
Remuneration Committee
Committee Chair
For more information
about the Board and
its activities:
Leadership and
Purpose page 92
Picton Property Income Limited
Annual Report 2025
89
Strategic
Report Governance
Financial
Statements
Additional
Information
Our Team
With extensive experience across real estate management and
financial services, our team have an in-depth knowledge and
understanding of the UK commercial property market.
Michael Morris
Chief Executive
Tom Harrison
Asset Manager
Mark Alder
Head of Occupier Services
Lucinda Christopherson
Executive Assistant to Chief
Executive and Office Manager
James Forman
Director of Accounting
Saira Johnston
Chief Financial Officer
Michael has over 30 years of experience
within the UK commercial property
sector and is responsible for the strategic
direction and effective execution of the
Group’s business model. Michael is Chair
of the Executive Committee and of the
Transaction and Finance Committee and
leads the Climate Action Working Group.
Tom is a Chartered Surveyor with over
five years of post-qualification experience,
who joined the team in January 2025.
Tom is responsible for the comprehensive
asset management of our portfolio,
including lease transactions and
overseeing capital expenditure projects.
Mark joined in 2020 and is a Chartered
Surveyor with over 30 years of
property management experience.
He is responsible for delivering
effective property management and
strengthening our relationship with
our occupiers. Mark is a member of
the Responsibility Committee and
the Health and Safety Committee.
Lucinda joined in December 2023 as
Executive Assistant to the Chief Executive,
Michael Morris, and is responsible for the
day-to-day management of the office
and for overseeing the administrative
aspects of the Company. She is a member
of the Health and Safety Committee.
James is a Certified Accountant, working
with the Group since its launch in 2005,
and has over 20 years of experience in
the real estate sector. He is responsible
for all accounting and financial reporting
for the Group and is a member of the
Transaction and Finance Committee.
Saira is a Chartered Accountant with
over 20 years of experience working
in the real estate sector in a range
of financial and operational related
roles. From 1 April 2024, Saira assumed
responsibility for the financial strategy
and reporting for the Group. Saira
is also Chair of the Responsibility
Committee and a member of the
Transaction and Finance Committee.
90
Picton Property Income Limited
Annual Report 2025
Lucy Stearman
Assistant Accountant
Andy Lynch
Head of Building Surveying
Louisa McAleenan
Senior Analyst – Research,
Strategy and Sustainability
Tim Hamlin
Director of Asset Management
Kathy Thompson
Company Secretary
Jay Cable
Senior Director and
Head of Asset Management
Lucy has over ten years of experience
within financial services and joined the
Group in April 2019 to assist with the
accounting and financial reporting.
Andy is a Chartered Surveyor with
over 15 years of experience within the
commercial real estate sector. Andy
joined the Group in November 2022 and
oversees refurbishment projects and other
building matters across the portfolio,
with a particular focus on environmental
improvements. He is a member of
the Climate Action Working Group.
Louisa has over 15 years of experience in
real estate research and is responsible
for all aspects of research and analysis,
contributing to the direction of the Group’s
investment strategy. She is a member
of the Responsibility Committee and
the Climate Action Working Group.
Tim is a Chartered Surveyor with over
15 years of real estate experience and is
responsible for creating and implementing
asset-level business plans in line with
the portfolio’s strategic direction and is a
member of the Responsibility Committee.
Kathy joined in May 2023 and was
appointed Company Secretary to
the Group on 1 October 2023. Kathy
is a Chartered Secretary with over
15 years of experience within the
financial services and property sectors,
having previously qualified as a
Chartered Accountant with PwC.
A Chartered Surveyor with over 20
years of real estate experience, Jay
has worked with the Group since its
launch in 2005. He is responsible for
the proactive asset management of the
portfolio and overseeing its strategic
direction and is a member of the
Executive Committee, the Transaction
and Finance Committee and is Chair
of the Health and Safety Committee.
Additional
Information
Financial
StatementsGovernance
Strategic
Report
91
Picton Property Income Limited
Annual Report 2025
Leadership and Purpose
Our purpose is to be a responsible
owner of commercial real estate,
helping our occupiers succeed and
being valued by all our stakeholders.
Our people and culture
The Board considered its role in
shaping the Company’s culture
and leading by example as part of
its annual performance review.
The Board recognises the
importance of its people and
welcomes the opportunities
during the year when the
Directors are able to meet in
person with the team as part
of the quarterly Board meeting
programme. This regular
contact supports the strong
and open culture and shared
values across the Company.
Our values
This year, we reviewed our
values at our team offsite in
September 2024 as part of
a workshop facilitated by an
external consultant. As a result,
our values were updated (see
below) and following discussion
were subsequently approved by
the Board in November 2024.
Positive
We are collaborative, upbeat and
put people at the forefront. We
foster strong relationships and
invest in our shared success. We
demonstrate this through our
culture, our occupier focused
approach and engagement
with all our stakeholders.
The role of the Board
Our Board is responsible for
the long-term success of the
business. It provides leadership
and direction, with due regard
to the views of all stakeholders
in the business. The Board
operates in an open and
transparent way, and seeks to
engage with its shareholders,
occupiers, employees and the
local communities where its
property assets are situated.
The Board has full responsibility
for the direction and control
of the business and sets and
implements strategy, within a
framework of strong internal
controls and risk management. It
establishes the culture and values
of the Company and ensures
these are aligned with its strategy.
The Board has a schedule of
matters reserved for its attention.
This includes all significant
acquisitions, disposals and
leasing transactions, capital
expenditure projects, new
lending arrangements, capital
allocation and dividend policy.
The Board has collectively a
range of skills and experience
that are complementary and
relevant to the business.
These are set out in the
biographies of the individual
Directors on pages 88 and
89 and illustrated in the
skills matrix on page 87.
Proactive
We are forward thinking, agile
and adaptive. We demonstrate
this through our asset
management and dynamic
positioning of the portfolio.
Principled
We are professional, diligent
and strategic. We demonstrate
this through our integrity and
work ethic, our transparent
reporting and alignment with
our shareholders, and our
commitment to sustainability
and environmental initiatives.
Annual employee
engagement survey
The results of this year’s
employee engagement survey
were considered by the Board.
Helen Beck, our Director for
employee engagement, fed
back the results to the team,
on behalf of the Board.
The survey results showed
that team sentiment remains
very positive and although
the overall satisfaction score
has fallen since last year, it
still remains at a high level.
More detail is provided in
the Sustainable Thinking
section on page 77.
For more information
about the Board and
its activities:
Board of Directors
pages 88 to 89
Division of
Responsibilities
page 100
Picton Property Income Limited
Annual Report 2025
92
Board meetings
There were ten scheduled
meetings during the year, which
were attended by all Board
members. This comprised four
shorter quarterly meetings
held virtually to deal with the
approval of the dividend and to
review key portfolio activity; and
four longer quarterly meetings
held in person for strategic
and operational matters. There
were also two meetings held
to approve the annual and the
half-year results and accounts.
Both our former and current
Chair held meetings with the
Non-Executive Directors without
the Executive Directors present.
Board education sessions were
also included in the annual
meeting schedule, and external
advisers including our brokers,
were invited to attend Board
meetings during the year. In
addition, the Board received a
refresher on UK MAR and on
Guernsey Company law from
our UK and Guernsey legal
advisers, respectively. There
was also a presentation from
our sustainability consultants
at our Board strategy day.
Attendance at Board and Committee meetings
The below meetings were the scheduled Board and Committee meetings. Additional meetings were held to deal with other matters
as required and are not included. The papers are circulated on a timely basis to ensure that the Directors have sufficient time to
consider the matters which are proposed for discussion.
Board members Date appointed Board Audit and Risk Remuneration Property Valuation Nomination
Francis Salway
1
01.02.2025 1/1 – 1/1 N/A N/A
Mark Batten
2
01.10.2017 10/10 4/4 4/5 4/4 2/2
Helen Beck
3
01.08.2024 6/6 2/2 2/2 2/2 1/1
Richard Jones 01.09.2020 10/10 4/4 5/5 4/4 2/2
Michael Morris 01.10.2015 10/10 – – – –
Saira Johnston 01.04.2024 10/10 – – – –
Lena Wilson
4
01.01.2021 9/9 – 4/4 4/4 2/2
Maria Bentley
5
01.10.2018 3/3 2/2 3/3 1/1 1/1
Total number of meetings 10 4 5 4 2
1. Francis Salway was appointed on 1 February 2025, succeeding Lena Wilson as Chair and Chair of the Nomination Committee.
2. Mark Batten was unable to attend the Remuneration Committee meeting on 18 March 2025 due to ill-health.
3. Helen Beck was appointed on 1 August 2024, replacing Maria Bentley as Chair of the Remuneration Committee. Helen attended the Board and Property Valuation
Committee meetings on 30 July 2024 in an observer capacity.
4. Lena Wilson stepped down from the Board as Chair and Chair of the Nomination Committee on 31 January 2025.
5. Maria Bentley stepped down from the Board and as Chair of the Remuneration Committee at the end of the Annual General Meeting on 30 July 2024.
Strategy day
This year’s strategy day started
with the Board visiting one
of our London office assets,
Farringdon Road, which was
particularly informative for our
new Directors. The agenda for
the day provided an opportunity
to reflect on the previous year’s
activities and achievements
and to plan for the upcoming
year. In addition, a number of
key matters were considered
including property portfolio
strategy and composition, equity
capital markets, stakeholder
engagement and sustainability.
Board Committees
The Board has established
four Committees:
Audit and Risk, Remuneration,
Nomination and Property
Valuation. These are comprised
entirely of Non-Executive
Directors and operate within
defined terms of reference,
which are regularly reviewed
and are available on the
Company’s website.
Conflicts of interest
Directors are required to notify
the Company of any potential
conflicts of interest that they may
have. Any conflicts are recorded
and reviewed by the Board at
each meeting. No conflicts have
been recorded during the year.
The process for obtaining
Board approval for external
appointments is included in the
Nomination Committee Report.
Picton Property Income Limited
Annual Report 2025
93
Strategic
Report Governance
Financial
Statements
Additional
Information
Leadership and Purpose continued
Board
activities
A wide range of matters were
considered by the Board and key
Board activities and approvals
over the year are set out here.
Strategic Financial reporting
and performance
Operational Risk management
and internal
controls
Stakeholder
engagement
Governance Employees, culture
and values
Sustainability
Impacted stakeholders
Impacted stakeholders
Impacted stakeholders
Impacted stakeholders
Impacted stakeholders
Impacted stakeholders
Impacted stakeholders
Impacted stakeholders
Activity
– Strategic initiatives including
opportunities for scale
– Portfolio strategy and
activity including
acquisitions and disposals
– Capital recycling and capital
allocation
– Equity capital markets’
landscape
Activity
– Portfolio and financial
forecasts
– Macroeconomic updates
from external advisers
– Quarterly management
accounts
– Operating budget for
financial year
– Dividend recommendations
– Annual and Interim financial
accounts
– Going Concern and Viability
Statement
– Lending and refinancing
arrangements
Activity
– Property valuations and
reports from external valuer
– Operational performance
– Operational matters
including upgrade of new
accounting system
– Health and safety matters
including RAAC, fire safety
and physical security
Activity
– Risk Management Policy and
risk appetite statements
– Risk matrix, principal and
emerging risks
– Internal audit plan and
internal review reports
– Review of Property
Manager’s internal controls
reports
– Evaluation of external auditor
Activity
– Shareholder register analysis
– Shareholder feedback
following annual and
interim results
– Market update from
Company’s brokers
– AGM planning
– Occupier engagement
survey – outcomes and
actions
Activity
– Board Committee Chair
Reports to the Board
– Company Secretary Report
and governance updates
– Internal Board and
Committee performance
recommendations
– New Articles of
Incorporation
– Board Committee Terms
of Reference
– Modern Slavery Statement
Activity
– Directors’ Remuneration
Report and 2024 Directors’
Remuneration Policy
– Independent benchmarking
report on market
remuneration levels for
Directors and employees
– Executive Directors’ fixed
and variable remuneration
– Employees’ fixed and
variable remuneration
– Employee engagement
survey – outcomes and
actions
– Board and senior
management succession
planning
– Diversity and inclusion
Activity
– ESG Strategy and Policies
– Sustainability priorities
Outcomes
– Annual and mid-year
strategy review
– Approved acquisitions
and disposals
– Approved share buyback
programme
Outcomes
– Approved operating budget
for the financial year
– Approved quarterly
dividends and related Stock
Exchange announcements
– Approved the Annual Report
and Interim Results and
related Stock Exchange
announcements
– Approved refinancing of
revolving credit facility with
NatWest
Outcomes
– Acceptance of quarterly
independent valuations
– Approved new accounting
system
– Approved annual Health and
Safety Policy statement
Outcomes
– Approved updated Risk
Management Policy and risk
appetite statements
– Approved updated risk
matrix, and principal and
emerging risks
– Agreed internal audit plan
– Recommended to
shareholders the re-
appointment of the external
auditor
Outcomes
– Approved AGM Notice
Outcomes
– Approved Board
Committees’ Terms
of Reference
– Approved Modern Slavery
Statement
– Recommended to
shareholders the new
Articles of Incorporation
Outcomes
– Recommended to
shareholders the Directors’
Remuneration Report
– Recommended to
shareholders the 2024
Directors’ Remuneration
Policy
– Approved fixed and variable
remuneration for Executive
Directors and team
Outcomes
– Appointed new sustainability
consultants and approved
updated ESG Strategy
– Approved ESG Governance
Policy and related ESG
Policies for Anti-Bribery and
Diversity and Inclusion
Picton Property Income Limited
Annual Report 2025
94
Our stakeholders
Strategic Financial reporting
and performance
Operational Risk management
and internal
controls
Stakeholder
engagement
Governance Employees, culture
and values
Sustainability
Impacted stakeholders
Impacted stakeholders
Impacted stakeholders
Impacted stakeholders
Impacted stakeholders
Impacted stakeholders
Impacted stakeholders
Impacted stakeholders
Activity
– Strategic initiatives including
opportunities for scale
– Portfolio strategy and
activity including
acquisitions and disposals
– Capital recycling and capital
allocation
– Equity capital markets’
landscape
Activity
– Portfolio and financial
forecasts
– Macroeconomic updates
from external advisers
– Quarterly management
accounts
– Operating budget for
financial year
– Dividend recommendations
– Annual and Interim financial
accounts
– Going Concern and Viability
Statement
– Lending and refinancing
arrangements
Activity
– Property valuations and
reports from external valuer
– Operational performance
– Operational matters
including upgrade of new
accounting system
– Health and safety matters
including RAAC, fire safety
and physical security
Activity
– Risk Management Policy and
risk appetite statements
– Risk matrix, principal and
emerging risks
– Internal audit plan and
internal review reports
– Review of Property
Manager’s internal controls
reports
– Evaluation of external auditor
Activity
– Shareholder register analysis
– Shareholder feedback
following annual and
interim results
– Market update from
Company’s brokers
– AGM planning
– Occupier engagement
survey – outcomes and
actions
Activity
– Board Committee Chair
Reports to the Board
– Company Secretary Report
and governance updates
– Internal Board and
Committee performance
recommendations
– New Articles of
Incorporation
– Board Committee Terms
of Reference
– Modern Slavery Statement
Activity
– Directors’ Remuneration
Report and 2024 Directors’
Remuneration Policy
– Independent benchmarking
report on market
remuneration levels for
Directors and employees
– Executive Directors’ fixed
and variable remuneration
– Employees’ fixed and
variable remuneration
– Employee engagement
survey – outcomes and
actions
– Board and senior
management succession
planning
– Diversity and inclusion
Activity
– ESG Strategy and Policies
– Sustainability priorities
Outcomes
– Annual and mid-year
strategy review
– Approved acquisitions
and disposals
– Approved share buyback
programme
Outcomes
– Approved operating budget
for the financial year
– Approved quarterly
dividends and related Stock
Exchange announcements
– Approved the Annual Report
and Interim Results and
related Stock Exchange
announcements
– Approved refinancing of
revolving credit facility with
NatWest
Outcomes
– Acceptance of quarterly
independent valuations
– Approved new accounting
system
– Approved annual Health and
Safety Policy statement
Outcomes
– Approved updated Risk
Management Policy and risk
appetite statements
– Approved updated risk
matrix, and principal and
emerging risks
– Agreed internal audit plan
– Recommended to
shareholders the re-
appointment of the external
auditor
Outcomes
– Approved AGM Notice
Outcomes
– Approved Board
Committees’ Terms
of Reference
– Approved Modern Slavery
Statement
– Recommended to
shareholders the new
Articles of Incorporation
Outcomes
– Recommended to
shareholders the Directors’
Remuneration Report
– Recommended to
shareholders the 2024
Directors’ Remuneration
Policy
– Approved fixed and variable
remuneration for Executive
Directors and team
Outcomes
– Appointed new sustainability
consultants and approved
updated ESG Strategy
– Approved ESG Governance
Policy and related ESG
Policies for Anti-Bribery and
Diversity and Inclusion
Consideration of
Section 172 matters
is described on
pages 96 to 97, and
how the Board has
engaged with all its
stakeholders is set out
on pages 98 to 99
Our employeesOur shareholders
Local communities
and charities
Our suppliers
Our occupiers
Picton Property Income Limited
Annual Report 2025
95
Strategic
Report Governance
Financial
Statements
Additional
Information
Leadership and Purpose continued
Section 172 Statement
As the Company is registered in Guernsey, the UK Companies
Act 2006 does not apply. However, in accordance with the
UK Corporate Governance Code 2018 and as a matter of good
governance, the Directors, individually and collectively as the
Board, act as they consider most likely to promote the success
of the Company for the benefit of stakeholders as a whole.
Other Non-Executive Directors
will engage with shareholders on
specific matters as appropriate
and all of the Directors attend the
Annual General Meeting to meet
with shareholders and to answer
any questions they may have.
In addition, Francis Salway
took the opportunity to meet
with our major shareholders
during February, on joining
the Board, with the feedback
informing the discussion at
the Board strategy day.
Our occupiers
One of our key priorities is to work
with our occupiers, so that we
can understand their needs and
aim to meet their current and
future requirements. The Board
has delegated responsibility
for engaging with occupiers
to the asset management
team, who have ongoing
communication with occupiers,
and use this information when
making proposals to the Board
on investment transactions,
such as refurbishment
projects or leasing events.
Our employees
One of our Non-Executive
Directors, Helen Beck has
responsibility for employee
engagement, with Maria
Bentley holding this role until
her departure in July 2024. Our
annual employee survey this year
was conducted for a second time
by an independent third-party
consultant, providing a more
insightful view of the feedback
given which was then discussed
by the Board. The Board has
also been able to meet with the
whole team informally when
the quarterly in-person Board
meetings have been held at
Stanford Building and both our
new Chair and new Remuneration
Committee Chair were able to
introduce themselves to the team.
Local communities
and environment
We are committed to improving
the impact of our buildings on
local communities, whether
providing space to local
businesses, improving local areas
or minimising the environmental
impact of buildings themselves.
The Board has established a
Responsibility Committee, which
is chaired by the Chief Financial
Officer, to oversee sustainability
initiatives on its behalf.
Consideration of these factors
and other relevant matters is
embedded into all Board decision
making, strategy development
and risk assessment throughout
the year. We consider our
key stakeholders to be our
shareholders, our occupiers, our
employees, our communities,
and our suppliers. Working
closely with our stakeholders
is a key strategic priority. The
primary ways in which the Board
engages directly or delegates
responsibility for engagement to
management are set out below.
Board engagement
with stakeholders
Our shareholders
We rely on the support of our
shareholders and their views
are important to us. The long-
term success of the business will
deliver value for shareholders. The
Chair, Chief Executive and Chief
Financial Officer hold regular
meetings with shareholders
and feedback from these
meetings is reported back to
the Board. This feedback may
be on macro trends, share price
performance, our growth strategy,
operational matters, financing
strategy or dividend policy, as
examples. There are also investor
presentations arranged following
our Annual General Meeting and
after release of our interim results,
which provide an opportunity
for investors to raise questions.
88%
Of occupiers
would recommend
us as a landlord
76%
Employee
satisfaction
Picton Property Income Limited
Annual Report 2025
96
The Board reviews progress on
our key sustainability priorities
and net zero carbon pathway
commitment, and at this year’s
Board strategy day received
a presentation from our new
sustainability consultants.
The Board was updated on
industry trends on ESG, on
their review of our materiality
assessment, and their work to
support the development of
our updated ESG strategy and
policies aligned to the UN’s
Sustainable Development Goals.
Suppliers
We have in place a Supplier
Code of Conduct, which provides
a framework for conducting
business across the Group in
a way that makes a positive
contribution to society, while
minimising any negative impact
on people and the environment.
The Board has agreed the
overall business framework and
delegated its implementation
to the management team.
Considering stakeholders in
key Board decision making
The table here sets out several
examples of important decisions
taken by the Board during the
year. These decisions are not
only material to the Group but
are also significant to any of our
key stakeholders. As part of the
decision-making process, the
Board considers the feedback
from stakeholder engagement
as well as the need to act fairly
between all shareholders and
to maintain high standards
of business conduct.
Strategic focus areas Actions
Portfolio Performance
Repositioning of
office assets for
alternative use
The Board continued to consider opportunities to reposition office
assets after successfully securing planning permission for alternative
use for two of its London assets, Angel Gate and Charlotte Terrace and
Longcross in Cardiff. The Board also approved the submission of a
planning application for 50 Farringdon Road as the Board continues
seeking to maximise value for shareholders by unlocking value through
this strategy.
Investment into
the portfolio
The Board is responsible for approving capital expenditure above
£0.75 million. During the year there has been significant investment
into the portfolio across more than 20 projects. This investment has
been aimed at enhancing space to retain and attract occupiers, improve
sustainability credentials and to grow income for existing shareholders.
Operational Excellence
Share buyback
programme
The Board considered a return of capital for shareholders in response
to shareholder feedback and approved a share buyback programme
in January 2025, with a further extension of the programme in
April 2025, on the basis that this offers an attractive risk adjusted
return for shareholders.
Review of
dividend
The Board is aware of the value of regular dividend payments to
shareholders and reviews the level of dividend each quarter. In April
2024 the Board approved an increase in the dividend to 0.925p, which
has been maintained throughout the year.
Refinancing with
NatWest
The Company’s £50 million revolving credit facility with NatWest was
due to mature on 26 May 2025. Following discussions with NatWest
and alternative lenders, the Board approved the refinancing with
NatWest on favourable terms, with cost savings achieved by renewing
with the existing lender, which is beneficial from a financial perspective
for all our shareholders.
Change in valuer The Board approved the recommendation to appoint Knight Frank as
the new external valuer in place of CBRE, in compliance with the new
RICS mandatory rotation requirements. Our shareholders in particular
benefit from there being continued robustness of the quarterly
valuation process, which the transition and smooth handover between
CBRE and Knight Frank will ensure, as well as remaining compliant with
new rules and regulations.
Acting Responsibly
Occupier
engagement
The Board reviewed the results of the occupier survey carried out this
year and heard from management on how the feedback had been
considered and addressed by our property manager, CBRE, to ensure
satisfaction levels continue to be met or exceeded.
ESG strategy The Board received a presentation from our new sustainability
consultants on their work to support the review and further
development of our ESG strategy, which was approved in March 2025,
and is a key component of our acting responsibly strategic priority.
Board succession The Board’s focus on succession and overseeing the recruitment and
appointment of two new Directors, Francis Salway and Helen Beck,
has been a key activity during the year. The Board in reviewing these
appointments has considered the skills, experience and knowledge
required to enable the Board as a whole to operate effectively and
to be able to oversee the delivery of strategy.
Picton Property Income Limited
Annual Report 2025
97
Strategic
Report Governance
Financial
Statements
Additional
Information
Leadership and Purpose continued
Engagement with stakeholders
We believe that taking into account the
views of our key stakeholders is critical to
the long-term success of the business.
We engage with all of our stakeholders
to understand what is important to
them. The following table sets out our
key stakeholders and why and how
we effectively engage with them.
Our Section 172 Statement for the
year ended 31 March 2025 is available
on the previous pages and sets out
how some of the key decisions made
by the Board during the year were
guided by stakeholder engagement.
Our shareholders Our occupiers Our employees Local communities
and charities
Our suppliers
What is important
to the stakeholder
– Clear strategy
– Regular dividends
– Financial performance
– Clear and transparent reporting
What is important
to the stakeholder
– Cost-effective space suited
to their needs
– Fair lease terms
– Well-managed, efficiently run
and sustainable buildings
– Good relationships
What is important
to the stakeholder
– Fair and equal treatment
– Career development
– Fair pay and conditions
– Good work/life balance
– Positive work culture and values
What is important
to the stakeholder
– Local employment opportunities
– Positive contribution to local economy
– Safe and clean environment
What is important
to the stakeholder
– Prompt payment
– Fair terms of business
– Long-term relationships
Why we engage
Engaging with our shareholders helps
to inform our strategic decision making,
communicate clearly and report on both our
financial and sustainability performance.
Why we engage
We are occupier focused in our approach
and aim to understand our occupiers’
evolving requirements to continually
improve their occupier experience and
create spaces in which they will succeed.
Why we engage
We seek our employees’ views on our purpose,
values and activities, which all support our
continued strong and open culture; and on
our working arrangements and practices.
Why we engage
We are committed to maximising the social
value we deliver to the local communities where
we own buildings, where this is practicable,
whether providing space to local businesses,
improving local areas or minimising the
environmental impact of buildings themselves.
Why we engage
Engaging with our suppliers ensures we are
operating in an ethical way in accordance
with relevant laws and regulations and in
line with our own business principles.
How we engage
We value the views of all our shareholders and
senior management hold regular meetings to
update shareholders on progress and activity.
We issue regular investor updates with key
financial highlights and updates on the
portfolio. Our website provides shareholders
with up-to-date information about the Group.
How we engage
One of our key priorities is to work with our
occupiers, so that we can understand their
needs and aim to meet their current and future
requirements. Our asset managers, guided by
our Picton Promise, our five key commitments
to our occupiers, maintain regular contact with
occupiers, discussing any issues regarding
the buildings and any future plans we have.
Our Head of Occupier Services has developed
an occupier engagement programme and
attends occupier meetings and other events.
Our occupier app and newsletter also provides
relevant and helpful information across our
key multi-let offices and industrial buildings.
How we engage
We have a small team and engage regularly
with them. We have an appraisal process where
each member of the team will discuss their
performance and objectives with their line
manager twice a year. We carry out an annual
employee survey, and the results of this are
discussed by the Board. The Board also meets
with the whole team informally when in-person
Board meetings are held at Stanford Building.
How we engage
We engage through our charity and
community initiatives and through our
occupier engagement programme.
We have a number of key charity partners
which we support and activities are arranged
with the team where appropriate.
We have a matched giving policy through
which our occupiers and employees
are invited to apply for a donation to
boost their fundraising efforts.
How we engage
We seek to maintain productive and
long-term relationships with our business
partners. We have in place a Supplier Code
of Conduct, which provides a framework
for conducting business across the Group
in a way that makes a positive contribution
to society, while minimising any negative
impact on people and the environment.
What we have done this year
– The Chair held meetings with major
shareholders in February, following his
appointment, receiving feedback on issues
important to the strategic direction and
growth of the business
– The Chief Executive and Chief Financial
Officer held regular meetings with
shareholders during the year
– Analyst briefings and investor presentations
were held after the Interim and Annual
Results were announced
– Our AGM was held in person at Stanford
Building in July 2024 and a webinar was
held following the meeting for those unable
to attend
– A mini-capital markets day was held in
person at our Stanford Building in
September 2024
– Several investor roadshows were also
held during the year, enabling in person
shareholder meetings
What we have done this year
– An occupier survey was undertaken at our
industrial assets and also at our multi-let
offices through our occupier app, for a
third year, with an increased response rate
and the results continuing to be positive.
All issues raised have been addressed
either by our property managers or our
Head of Occupier Services
– The roll-out of our occupier app has
continued to prove successful, with nearly
1,600 regular users across all our locations, an
increase of 47% since 2023. We will continue
this roll-out programme over the course of
the year ahead
What we have done this year
– The results of this year’s employee
engagement survey were discussed at the
Board strategy day. There was positive
sentiment particularly around clear
expectations at work, with appropriate
guidance and resources being provided to
succeed, with employees motivated to deliver
quality work and a re-affirmation of Picton as
a recommended place to work
– The Board’s designated Director, Helen Beck
fed back the overall results to the team
What we have done this year
– One of our key charity partners, Future Youth
Zone, gave an informative presentation to the
team, on their work to support young people
– Our Chief Executive has provided
advice to two of our charity partners
on a pro-bono basis
– The majority of the team participated
in the ‘Retirement Ramble’ for our former
Finance Director
– Our charitable donations for the year
were £26,000
– We supported 15 different charities
What we have done this year
– Our finance team continues to ensure
that our suppliers are paid promptly
within payment terms
– We continue to ensure that new suppliers
comply with our supplier code of conduct
and our modern slavery terms
Picton Property Income Limited
Annual Report 2025
98
Our shareholders Our occupiers Our employees Local communities
and charities
Our suppliers
What is important
to the stakeholder
– Clear strategy
– Regular dividends
– Financial performance
– Clear and transparent reporting
What is important
to the stakeholder
– Cost-effective space suited
to their needs
– Fair lease terms
– Well-managed, efficiently run
and sustainable buildings
– Good relationships
What is important
to the stakeholder
– Fair and equal treatment
– Career development
– Fair pay and conditions
– Good work/life balance
– Positive work culture and values
What is important
to the stakeholder
– Local employment opportunities
– Positive contribution to local economy
– Safe and clean environment
What is important
to the stakeholder
– Prompt payment
– Fair terms of business
– Long-term relationships
Why we engage
Engaging with our shareholders helps
to inform our strategic decision making,
communicate clearly and report on both our
financial and sustainability performance.
Why we engage
We are occupier focused in our approach
and aim to understand our occupiers’
evolving requirements to continually
improve their occupier experience and
create spaces in which they will succeed.
Why we engage
We seek our employees’ views on our purpose,
values and activities, which all support our
continued strong and open culture; and on
our working arrangements and practices.
Why we engage
We are committed to maximising the social
value we deliver to the local communities where
we own buildings, where this is practicable,
whether providing space to local businesses,
improving local areas or minimising the
environmental impact of buildings themselves.
Why we engage
Engaging with our suppliers ensures we are
operating in an ethical way in accordance
with relevant laws and regulations and in
line with our own business principles.
How we engage
We value the views of all our shareholders and
senior management hold regular meetings to
update shareholders on progress and activity.
We issue regular investor updates with key
financial highlights and updates on the
portfolio. Our website provides shareholders
with up-to-date information about the Group.
How we engage
One of our key priorities is to work with our
occupiers, so that we can understand their
needs and aim to meet their current and future
requirements. Our asset managers, guided by
our Picton Promise, our five key commitments
to our occupiers, maintain regular contact with
occupiers, discussing any issues regarding
the buildings and any future plans we have.
Our Head of Occupier Services has developed
an occupier engagement programme and
attends occupier meetings and other events.
Our occupier app and newsletter also provides
relevant and helpful information across our
key multi-let offices and industrial buildings.
How we engage
We have a small team and engage regularly
with them. We have an appraisal process where
each member of the team will discuss their
performance and objectives with their line
manager twice a year. We carry out an annual
employee survey, and the results of this are
discussed by the Board. The Board also meets
with the whole team informally when in-person
Board meetings are held at Stanford Building.
How we engage
We engage through our charity and
community initiatives and through our
occupier engagement programme.
We have a number of key charity partners
which we support and activities are arranged
with the team where appropriate.
We have a matched giving policy through
which our occupiers and employees
are invited to apply for a donation to
boost their fundraising efforts.
How we engage
We seek to maintain productive and
long-term relationships with our business
partners. We have in place a Supplier Code
of Conduct, which provides a framework
for conducting business across the Group
in a way that makes a positive contribution
to society, while minimising any negative
impact on people and the environment.
What we have done this year
– The Chair held meetings with major
shareholders in February, following his
appointment, receiving feedback on issues
important to the strategic direction and
growth of the business
– The Chief Executive and Chief Financial
Officer held regular meetings with
shareholders during the year
– Analyst briefings and investor presentations
were held after the Interim and Annual
Results were announced
– Our AGM was held in person at Stanford
Building in July 2024 and a webinar was
held following the meeting for those unable
to attend
– A mini-capital markets day was held in
person at our Stanford Building in
September 2024
– Several investor roadshows were also
held during the year, enabling in person
shareholder meetings
What we have done this year
– An occupier survey was undertaken at our
industrial assets and also at our multi-let
offices through our occupier app, for a
third year, with an increased response rate
and the results continuing to be positive.
All issues raised have been addressed
either by our property managers or our
Head of Occupier Services
– The roll-out of our occupier app has
continued to prove successful, with nearly
1,600 regular users across all our locations, an
increase of 47% since 2023. We will continue
this roll-out programme over the course of
the year ahead
What we have done this year
– The results of this year’s employee
engagement survey were discussed at the
Board strategy day. There was positive
sentiment particularly around clear
expectations at work, with appropriate
guidance and resources being provided to
succeed, with employees motivated to deliver
quality work and a re-affirmation of Picton as
a recommended place to work
– The Board’s designated Director, Helen Beck
fed back the overall results to the team
What we have done this year
– One of our key charity partners, Future Youth
Zone, gave an informative presentation to the
team, on their work to support young people
– Our Chief Executive has provided
advice to two of our charity partners
on a pro-bono basis
– The majority of the team participated
in the ‘Retirement Ramble’ for our former
Finance Director
– Our charitable donations for the year
were £26,000
– We supported 15 different charities
What we have done this year
– Our finance team continues to ensure
that our suppliers are paid promptly
within payment terms
– We continue to ensure that new suppliers
comply with our supplier code of conduct
and our modern slavery terms
Picton Property Income Limited
Annual Report 2025
99
Strategic
Report Governance
Financial
Statements
Additional
Information
Audit and Risk:
Chair: Mark Batten
Comprises:
3 Non-Executive Directors
Responsibilities:
– Overseeing the Group’s
financial and non-financial
reporting
– Ensuring the integrity of the
Group’s financial statements
– Overseeing the risk
management framework
and internal controls
– Agreeing internal audit plan
and reviewing internal audit
reports
– Reviewing the relationship
with the external auditor and
evaluating their
performance
Remuneration:
Chair: Helen Beck
Comprises:
4 Non-Executive Directors
Responsibilities:
– Determining remuneration
policy and making
recommendations to the
Board
– Setting the remuneration
packages of Executive
Directors ensuring
alignment of interests with
shareholders and employees
– Reviewing remuneration
and remuneration practices
for the team
– Approving bonus and LTIP
awards
Property Valuation:
Chair: Richard Jones
Comprises:
4 Non-Executive Directors
Responsibilities:
– Overseeing the independent
valuation process
– Recommending the
quarterly valuations to the
Board
– Appointing the valuer and
approving their
remuneration
– Ensuring compliance with
applicable standards
Nomination:
Chair: Francis Salway
Comprises:
4 Non-Executive Directors
Responsibilities:
– Reviewing the structure, size
and composition, including
diversity, of the Board and its
Committees
– Ensuring the Board and its
Committees have the
appropriate skills,
knowledge and experience
– Overseeing succession
planning
– Leading the Board
appointment process and
recommending Board
appointments
The Board
Chair:
Francis Salway
Comprises:
4 Non-Executive Directors and
2 Executive Directors
Responsibilities:
– The overall long-term success
of the Group and creating value
for shareholders
– Providing leadership and
direction for the business
– Setting and overseeing the
implementation of strategy
– Establishing the culture and
values of the business
– Agreeing Risk Management
Policy and risk appetite
– The overall financial
performance of the Group
– Appointing the Executive
Directors
– Approving property and
investment decisions and other
commitments above £750,000
– Promoting wider stakeholder
relationships
– Ensuring high standards of
corporate governance across
the Group
Transaction and Finance Committee:
Chair: Michael Morris
Comprises:
2 Executive Directors and senior management
Responsibilities:
– Reviewing and recommending portfolio transactions to the Board
– Approving property investment decisions
– Monitoring portfolio costs
– Reviewing asset-level business plans
– Reviewing compliance with lending covenants
Responsibility Committee:
Chair: Saira Johnston
Comprises:
1 Executive Director, senior management and employees
Responsibilities:
– Overseeing the overall ESG Strategy for the Group
– Overseeing the work of our sustainability advisors
– Overseeing the Climate Action Working Group and receiving
updates on environmental matters
– Monitoring stakeholder engagement, including occupiers,
employees, communities and suppliers
– Approving our sustainability reporting
– Reviewing our ESG policies and recommending these to the
Executive or Board for approval
– Monitoring compliance with relevant standards and legislation
Executive Committee:
Chair: Michael Morris
Comprises:
2 Executive Directors and 1 senior executive
Responsibilities:
– Overseeing the development and delivery of strategy
– Monitoring financial and non-financial performance
– Managing the business day-to-day
– Assessing and monitoring risk management and systems of internal control
– Determining employee remuneration and overseeing career development
– Overseeing the work of the Health and Safety Committee
Board Committees
Management Committees
Division of Responsibilities
Picton Property Income Limited
Annual Report 2025
100
Chair Chief Executive Senior Independent
Director
Francis Salway
– Leads the Board and is responsible for the
overall effectiveness of the Board
– Promotes Company culture and values
– Sets the agenda and tone of Board
discussions and promotes open debate
at meetings
– Ensures that all Directors receive full and
timely information to enable effective
decision making
– Ensures that the Board determines the
nature, and extent, of the significant risks
the Company is willing to embrace in the
implementation of its strategy
– Leads the Board’s annual performance
review and ensures that all Directors receive
appropriate induction and training
– Responsible for major shareholder and
other stakeholder engagement and ensures
Board is informed of their views
– Fosters productive relationships between
the Non-Executive and the Executive
Directors
– Responsible for governance
Michael Morris
– Leads the Group and articulates its vision,
values and purpose
– Supports the Chair in promoting our culture,
values and high standards of governance and
behaviours throughout the Group
– Develops, recommends and executes
strategy for the Group
– Responsible for the overall performance and
a day-to-day management of the business
– Ensures the Board receives comprehensive,
accurate and high-quality information in a
timely manner
– Manages communication with shareholders
and ensures that their views are represented
to the Board
Mark Batten
– Provides a sounding board for the Chair
and a trusted intermediary for the other
Directors where necessary
– Leads the annual evaluation of the Chair
– Leads the succession process for the
appointment of the Chair, working with
the Nomination Committee
– Communicates with shareholders when
other channels are not available or
appropriate
– Acts as alternate to the Chair when not
able to act due to conflict of interests
Non-Executive Directors Executive Director
Mark Batten
Helen Beck
Richard Jones
– Bring independent sound judgement,
objectivity, scrutiny and an external
perspective to the decisions of the Board
– Bring a range of skills, experience and
diversity of thought to the deliberations of
the Board and constructively challenge
management
– Monitor business progress against agreed
strategy
– Review the internal control and risk
management framework and the integrity
of financial information
– Determine the Remuneration Policy for the
Group and approves performance targets in
line with strategy
Saira Johnston
– Supports the Chief Executive in the
formulation and execution of strategy
– Manages the financial operations of the
Group
– Develops and maintains the system of
financial controls within the Group
– Recommends the internal control and risk
management framework to the Audit and
Risk Committee and the Board
Responsibilities of the Directors
The roles and principal responsibilities of each of the Directors are described below: The Directors are supported by the Company
Secretary who is responsible for ensuring compliance with Board procedures and the effective flow of information between the Board
and its Committees and between senior management and the Non-Executive Directors.
Picton Property Income Limited
Annual Report 2025
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Strategic
Report Governance
Financial
Statements
Additional
Information
Composition, Succession and Evaluation
These charts set
out the Board’s
composition, tenure
and diversity
characteristics as
at 31 March 2025.
The Board currently comprises
the Chair, two Executive Directors
and three independent Non-
Executive Directors. The Non-
Executive Directors bring a variety
of skills and business experience
to the Board. Their role is to bring
independent judgement and
scrutiny to the recommendations
of the Executive Directors. Each
of the Non-Executive Directors
is considered to be independent
in character and judgement.
As at 31 March 2025 the Board
comprised 50% independent
Non-Executive Directors,
excluding the Chair.
The biographies of the
Directors can be found
on pages 88 to 89, which
set out their skills and
experience, and their
membership of each of
the Committees.
Board composition and diversity
Function
Age
Gender
Tenure
Independent 3
Non-independent 2
Chair 1
45 to 55 years 2
55 to 65 years 2
65 to 70 years 2
Male 4
Female 2
0 to 3 years 3
3 to 9 years 2
9 to 12 years
1
1
1. Michael Morris, Chief Executive.
Ethnic representation
Number of
Board
members
Percentage
of the Board
Number of
senior Board
positions
Number in
executive
management
Percentage
of executive
management
White British 5 83% 3 2 67%
Mixed British Asian 1 17% 1 1 33%
Sex/gender representation
Number of
Board
members
Percentage
of the Board
Number of
senior Board
positions
Number in
executive
management
Percentage
of executive
management
Men 4 67% 3 2 67%
Women 2 33% 1 1 33%
Picton Property Income Limited
Annual Report 2025
102
with Francis Salway
Francis Salway was appointed to the
Board as Chair on 1 February 2025,
as successor to Lena Wilson, who
stepped down from the Board on
31 January 2025.
What attracted
you to Picton?
For a number of years I have
admired Picton for their long-
term track record of consistent
outperformance relative to UK
commercial property returns.
So I was very excited when I
was approached for this role.
What are your first
impressions of the
Company and the team?
They seem to be a very
cohesive team – and a very
lean and efficient team with
a staff of only 12, a number so
low that I initially queried it!
What do you think are
Picton’s core strengths?
I have been enormously
impressed by Picton’s
asset management skills,
delivering enhanced returns
with low levels of risk.
What do you see as the
biggest opportunities
or challenges ahead for
the REIT sector?
REITs can offer shareholders
very attractive dividend yields
together with the prospect of
growth in earnings and dividend.
The current discounts that
persist in the sector are both
opportunities and challenges.
What are the key
priorities for the business
next year?
We intend to continue divesting
of lower yielding assets.
We remain focused on
continuing our track record
of outperformance of
property returns and also
upgrading the environmental
performance of our portfolio.
We will consider actions to
address the discount in our share
price, noting that one step already
taken has been to commence
a share buyback programme
in the early part of this year.
Outside of work, what
are your passions or
key interests?
I walk, I go to an indoor
climbing wall to try to keep fit
and, despite the allure of taller
mountains abroad, I am always
drawn back to the beauty of
the countryside in the UK.
Both the rural environment
and the built environment
in the UK are very special.
I have always admired
Picton’s long-term track
record of outperformance.
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Strategic
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Statements
Additional
Information
Composition, Succession and Evaluation continued
Nomination
Committee
Focus areas for 2024/2025
/ Appointment of Francis Salway
as Non-Executive Chair and
Chair of the Nomination Committee
/ Appointment of Helen Beck
as Non-Executive Director and
Chair of the Remuneration Committee
Francis Salway
Chair of the Nomination Committee
Picton Property Income Limited
Annual Report 2025
104
The Committee’s main
responsibilities include reviewing
the composition of the Board to
ensure it has the right balance
of skills, knowledge, experience
and diversity to carry out its
duties and provide effective
leadership. The Committee also
leads the selection process and
the nomination of candidates
for appointment to the Board,
ensuring the process is formal,
rigorous and transparent and
there are appropriate succession
plans in place for both the
Board and senior management.
It is also the Committee’s role
to review the results of the
annual Board performance
review taking particular
regard to feedback relating to
composition and succession.
The Committee also makes
recommendations to
the Board regarding the
composition of the Audit and
Risk, Nomination, Property
Valuation and Remuneration
Committees, taking into
account individuals’ time
commitments and experience.
Terms of reference
The Committee’s responsibilities
are set out in its terms of
reference. These include
consideration of the following:
– Reviewing and making
recommendations regarding
the size and composition of the
Board;
– Considering and making
recommendations regarding
succession planning for the
Board and senior management;
– Identifying and nominating
candidates to fill Board
vacancies as they arise;
– Reviewing the results of the
Board performance review
relating to composition and
succession;
– Reviewing the time and
independence requirements
for Directors; and
– Recommending the
membership of Board
Committees.
Activity
The Committee met six
times during the year ended
31 March 2025, which included
the two scheduled meetings
and four ad hoc meetings.
A key focus of activity for
the Committee has been on
succession. This included
commencing and completing
the search for a new Chair to
succeed Lena Wilson with
effect from 31 January 2025,
following her decision to step
down from the Board, which was
announced on 4 October 2025.
After a thorough and robust
search process, Francis Salway’s
appointment as Chair of the Board
and the Nomination Committee
with effect from 1 February 2025,
was confirmed on 27 January 2025.
The Committee also spent time
in the first half of the financial
year completing the search for
a new Non-Executive Director
and Remuneration Committee
Chair to succeed Maria Bentley.
On 23 July 2024, the Board was
pleased to announce Helen
Beck’s appointment with
effect from 1 August 2024.
The selection process for each
Board role fully takes into
consideration the FCA Listing
Rules on diversity targets.
The Committee has also kept
under review both existing and
new external appointments of
the current Directors to ensure
that the time commitments
arising from these external
roles would not affect their
continued ability to discharge
their duties effectively; and
to ensure Directors are not
over-boarded and continue to
meet the required standards
concerning independence. As
part of this review, consideration
was also given to any charitable
or other not-for-profit positions
held by the Non-Executive
Directors, given that this could
also impact their time availability.
The Committee considered
a number of routine matters.
This included reviewing the
performance and constitution
of the Committee and its terms
of reference. The Committee
also oversaw the actions
taken in response to the
recommendations from the
internal Board performance
reviews carried out at the
beginning of 2024 and at the end
of 2024, and agreed the actions to
be taken in response. See pages
107 to 108 for further detail.
Francis Salway
has chaired the
Nomination
Committee since
1 February 2025,
succeeding Lena
Wilson who
stepped down
from the Board
on 31 January
2025. The other
members of the
Committee are
Mark Batten, Helen
Beck and Richard
Jones. Maria
Bentley stepped
down from the
Committee
during the year.
The Committee
oversaw two Board
appointments this year.
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Statements
Additional
Information
Composition, Succession and Evaluation continued
The recruitment process for
Maria’s replacement was also led
by Lena Wilson, and supported
by the Company Secretary,
with regular updates provided
to the Committee. Shortlisted
candidates recommended by
Teneo were interviewed by
Lena Wilson and all of the Non-
Executive Directors, following
which a recommendation to
appoint Helen Beck was approved
by the Board in July 2024.
On the Nomination Committee’s
recommendation, the Board
also engaged Teneo to support
the search for a new Chair,
with this process being led
by Mark Batten, our Senior
Independent Director, with
support from our Chief Executive
and Company Secretary, with
all Directors interviewing each
of the shortlisted candidates.
Recruitment and
succession planning
The Committee’s main activity
during the year has been on the
search for successors to Maria
Bentley and Lena Wilson.
In the early part of the financial
year, a tender process to select a
suitable search agency was led by
Lena Wilson, the previous Chair,
supported by the Chief Executive
and Company Secretary. The
tender process resulted in the
appointment of the independent
executive search consultants,
Teneo People Advisory, to
undertake the search for a
new Non-Executive Director.
Teneo has no other connection
to Picton, although Teneo
previously advised on the
recruitment of Saira Johnston,
the Company’s CFO.
In addition to the recruitment
activities described above, the
Committee also considered the
Board and senior management
succession planning
arrangements as part of its remit
for overseeing the development
of a diverse pipeline for
succession, taking into account
the skills and expertise needed
for the Board in the future.
Induction
There is a detailed induction
programme in place for all new
Directors, which is tailored to
the individual experience and
requirements of the Director
concerned. The programme
is overseen by the Chair and
managed by the Company
Secretary and runs throughout
the first year of the Director’s
appointment, with regular check-
ins to confirm progress against
the programme. Individual
programmes were developed
for all three of our new Directors
who joined the Board during the
financial year, Saira Johnston,
Helen Beck and Francis Salway.
Diversity and inclusion
The Company believes that
diversity amongst our employees
is essential for our sustained
business success. We value the
contributions made by all of
our team and are committed to
treating all employees equally.
Despite being a small team, we
ensure that equity, diversity and
inclusion are key considerations
for our recruitment partners
as part of their candidate
recommendations. All candidates
are then considered on merit but
having regard to the right blend of
skills, experience and knowledge.
The internal review concluded
that the Board, its Committees and
the individual Directors continue
to operate very effectively.
Picton Property Income Limited
Annual Report 2025
106
Board performance review
In accordance with the requirements of the Code, the Board undertakes a review of the effectiveness of its performance and that of its
Committees every year. An external review is usually carried out every three years, with internal reviews in the intervening years.
In early 2024, an internal review of the Board’s effectiveness was carried out, with this process being led by Lena Wilson and supported by
the Company Secretary. The following table sets out key actions that were identified following the review together with the progress
made since the review.
Action Progress
1. Continue to consider opportunities
for growth.
Growth strategy updates have been included as part of the Chief
Executive’s Board report and our brokers have also presented on
strategic matters during the year. A share buyback programme was
approved by the Board in January 2025 and discussion on growth
strategy was included on the agenda at the Board’s strategy day.
2. Review and update the risk
management framework.
The Risk Management Policy and risk management framework have been reviewed
and updated following discussion at the Audit and Risk Committee and Board in
March 2025.
3. Review Board meeting schedule and
allocation of topics for each meeting.
The Board meeting schedule has been reviewed following Francis’ appointment,
and the Board has approved a revised schedule of meetings, which will combine
strategic and operational matters and also allow time for deep dive thematic
discussions during the year.
4. To include a lessons learned Board
agenda item on a regular basis to cover
both strategic and operational matters.
The Board has considered lessons learned as part of routine operational papers for
recent property acquisitions and disposals and also from a strategic perspective.
5. Increase focus of Board on what
has changed since the previous
Board meeting.
A review of Board papers has been undertaken and a revised reporting approach
has been developed which will be rolled out for 2025/26. This will ensure there is
an appropriate balance between both historical and forward-looking information.
6. Review how the Board considers
stakeholders as part of its routine
business and in the decision-making
process.
The Board decision papers have been updated to include a stakeholder impact
statement. The feedback from the Board as part of the annual performance
review noted that stakeholder engagement was a strength of the Company.
7. Ensure succession planning and
diversity are regularly included
for discussion at the Nomination
Committee meeting.
A detailed succession plan covering the Board and senior management team was
discussed at the November 2024 Nomination Committee meeting and this will be
reviewed annually going forward.
A new Diversity and Inclusion Policy was developed during the year in conjunction
with our sustainability consultants, which was approved by the Board, after the
year end.
8. Review Director induction and ongoing
Director training ensuring this covers
key areas such as sustainability.
A comprehensive induction programme was developed and followed for all three
of our new Board members. The Directors also provided feedback on Director
training and during the year there have been refresher sessions on UK MAR,
Listing Rules changes and Directors’ Duties under Guernsey law.
9. Review current Non-Executive Director
performance review process.
The process was reviewed by the previous Chair in conjunction with the Company
Secretary and formalised as a result.
Picton Property Income Limited
Annual Report 2025
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Strategic
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Financial
Statements
Additional
Information
Composition, Succession and Evaluation continued
This year, our Board performance
review was carried out internally,
in line with the three-year review
cycle. This consisted of a
questionnaire prepared by the
Company Secretary following
discussion with the Chair. The
questionnaire covered the
following areas:
– Board leadership, culture and
Company purpose
– Skills, knowledge and diversity
– Stakeholders
– Division of responsibilities
– Composition, succession
and development
– Board meetings, conduct
and operations
– Board dynamics
– Overall reflections
The questionnaire was completed
by the each of the Directors
and the overall conclusions
were that the Board and the
Committees continue to
operate very effectively.
The key themes and actions
arising from the review were:
– To revert to a quarterly
reporting cycle to streamline
processes and facilitate debate
and decision making
– To refine our Board reporting
templates
– To introduce a thematic deep
dive session at the Board
meetings
– To include discussion of investor
feedback and reflect on share
price discount at Board strategy
meeting
Tenure and re-election
The tenure of Non-Executive
Directors, including the Chair,
is limited to nine years in
accordance with the UK Corporate
Governance Code. The Chief
Executive has held a position
on the Board as Executive
Director for just over nine years.
The provisions of the Corporate
Governance Code recommend
that all Directors be subject to
annual re-election at the Annual
General Meeting. The Board will
follow this recommendation and
all Directors will be proposed
for re-election, or election in
the case of Francis Salway and
Helen Beck, at the Annual
General Meeting in July 2025.
Francis Salway
Chair of the Nomination
Committee
21 May 2025
Picton Property Income Limited
Annual Report 2025
108
Audit, Risk and Internal Control
The Board and the Audit and
Risk Committee are responsible
for ensuring that the Group has
an effective internal control and
risk management system and
that the Annual Report provides
a fair reflection of the Group’s
activities during the year.
The Property Valuation
Committee has oversight
of the independent valuer
and the valuation process. It
recommends the adoption of
the quarterly valuations by the
Board, following its review of the
methodology and assumptions
used by CBRE Limited, the
Group’s external valuer.
Internal controls and
risk management
The Board is responsible for
establishing and maintaining the
Group’s system of internal controls
and reviewing its effectiveness.
The system is designed to ensure
effective and efficient operations,
internal controls and compliance
with laws and regulations. In
establishing the system of internal
controls, regard is paid to the
materiality of relevant risks, the
likelihood of costs being incurred
and costs of control. It follows,
therefore, that the system of
internal controls can only provide
reasonable, and not absolute,
assurance against material
misstatement or loss. The Board
has therefore established an
ongoing process designed to
meet the particular needs of the
Group in managing the risks to
which it is exposed, consistent
with the FRC’s Guidance on
Risk Management, Internal
Control and Related Financial
and Business Reporting.
Such review procedures have
been in place throughout the full
financial year, and up to the date
of the approval of the financial
statements, and the Board is
satisfied with their effectiveness.
This process includes a review
by the Board of the control
environment within the
Group’s key service providers
to ensure that the Group’s
requirements are met.
The Board continues to use
BDO LLP (BDO) to provide
internal audit and assurance
services to the Group. The Board
considers that this provides it
with assurance that the Group’s
internal controls are robust and
are operating effectively. The
annual programme of testing
carried out by BDO is agreed
in advance by the Audit and
Risk Committee. Details of the
reviews carried out by BDO
are set out in the Audit and
Risk Committee Report.
The effectiveness of the internal
controls system is reviewed
annually by the Audit and Risk
Committee and the Board.
The Audit and Risk Committee
has a discussion annually with
the external auditor to ensure
that there are no issues of
concern in relation to the audit
of the financial statements
and representatives of senior
management are excluded
from that discussion.
The Board has established procedures to manage
risk, oversee the framework of internal controls and
determine its risk appetite to achieve its long-term
strategic objectives.
Picton Property Income Limited
Annual Report 2025
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Strategic
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Financial
Statements
Additional
Information
Audit, Risk and Internal Control continued
Audit and Risk
Committee
Focus areas for 2024/2025
/ Annual and Interim Reports
/ Risk Management Policy review
/ Risk management appetite,
principal and emerging risks review
/ Internal audit reviews
Mark Batten
Chair of the Audit and Risk Committee
Picton Property Income Limited
Annual Report 2025
110
Meetings of the Audit and Risk
Committee are attended by the
Chair, the Chief Executive and
Chief Financial Officer, the internal
auditor and the external auditor.
The external auditor is given the
opportunity to discuss matters
without management present.
Terms of reference
The Committee’s terms of
reference include consideration
of the following issues:
– Financial reporting, including
significant accounting
judgements and accounting
policies;
– Development of a
comprehensive Risk
Management Policy for
adoption by the Group;
– Evaluation of the Group’s risk
profile and risk appetite, and
whether these are aligned with
its investment objectives;
– Ensuring that key risks,
including climate-related risks,
are being effectively identified,
measured, managed, mitigated
and reported;
– Internal controls, controls
testing and risk management
systems;
– The Group’s relationship with
the external auditor, including
effectiveness and
independence;
– Internal audit and assurance
services, including review of any
report and assessment of
control weaknesses; and
– Reporting responsibilities.
Activity
The Audit and Risk Committee
met four times during the
year ended 31 March 2025 and
considered the following matters:
– Draft Annual and Interim
Reports of the Group including
the fair, balanced and
understandable assessment;
– Audit and accounting key
judgements and issues of
significance;
– Going concern and viability
assessments;
– Valuation process and valuer
effectiveness;
– Risk Management Policy and
appetite;
– Risk matrix, principal and
emerging risks and mitigating
controls;
– External Audit reports to the
Committee including audit plan
and fees;
– The effectiveness of the audit
process and the independence
of KPMG Channel Islands
Limited;
– Annual internal audit plan
and fees;
– Internal audit reports, findings
and recommendations;
– The effectiveness of internal
controls and risk management
– Stock Exchange
announcements for the annual
and interim results and
quarterly dividends;
– Corporate Governance Code
compliance;
– 2024 UK Corporate Governance
Code and principal changes; and
– Committee effectiveness.
There were no specific areas
outside of those identified
within KPMG’s audit plan which
the Committee asked the
external auditor to review.
Financial reporting and
significant reporting
matters
The Committee considers
all financial information
published in the annual and
half-year financial statements
and considers accounting
policies adopted by the Group,
presentation and disclosure of
the financial information and
the key judgements made by
management in preparing
the financial statements.
The Directors are responsible for
preparing the Annual Report.
At the request of the Board, the
Committee considered whether
the 2025 Annual Report was fair,
balanced and understandable
and whether it provided the
necessary information for
shareholders to assess the
Group’s strategy, business
model and performance.
Key areas of judgement
Valuation of investment
properties
The key area of judgement that
the Committee considered in
reviewing the financial statements
was the valuation of the Group’s
investment properties.
The valuation is conducted
on a quarterly basis by the
external valuer and is subject
to oversight by the Property
Valuation Committee. It is a key
component of the annual and
half-year financial statements
and is inherently subjective,
requiring significant judgement.
Members of the Property
Valuation Committee, together
with members of the Picton team,
meet with the external valuer
on a quarterly basis to review
the valuation and underlying
assumptions, including the
year-end valuation process.
The Audit and
Risk Committee
is chaired by Mark
Batten. The other
members of the
Committee are
Helen Beck and
Richard Jones.
Maria Bentley
stepped down from
the Committee
during the year.
Mark Batten has
recent relevant
financial expertise
for the purposes of
satisfying the Code
and collectively
the Committee
members have
a broad range
of financial,
commercial
and property
expertise, sufficient
to fulfil their
responsibilities in
relation to both
financial and risk
matters and to be
able to advise the
Board on these.
The Committee
is satisfied that the
2025 Annual Report
is fair, balanced and
understandable.
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Statements
Additional
Information
Other key areas of judgement
Climate change is not considered
a key audit matter by our external
auditor, however, please refer to
our climate related disclosures
on pages 54 to 61 for further
information on climate change.
Fair balanced and
understandable
The Committee was satisfied that
the 2025 Annual Report is fair,
balanced and understandable
and included the necessary
information as set out here, and it
has confirmed this to the Board.
Risk management and
internal controls
The Board has ultimate
responsibility for risk
management within the
Group. The Board has adopted
a structured approach to
considering risks and defining
a framework that informs
decision making so that
the risks can be reported,
monitored and mitigated.
The Committee is responsible
for overseeing the development
and implementation of the
Group’s Risk Management Policy
including a six-monthly, or as
needed, review of the existing
principal and emerging risks
alongside mitigating controls and
their effectiveness, reporting to
the Board on these matters. The
Board reviews risk appetite as part
of its annual risk review. The risk
appetite is defined as tolerances
and targets for key metrics and
is set out in the risk matrix.
During the year, the Committee
reviewed and updated its
Risk Management Policy to
strengthen the management
of risks by incorporating risk
and controls scoring into its
framework and risk matrix. The
purpose of the Risk Management
Policy is to strengthen the proper
management of risks through
proactive risk identification,
measurement, management,
mitigation and reporting
in respect of all activities
undertaken by the Group.
The Chair of the Property
Valuation Committee reported
to the Audit and Risk Committee
at its meeting on 29 April
2025 and confirmed that the
following matters had been
considered in discussions
with the external valuers:
– Property market conditions;
– Yields on properties within the
portfolio;
– Letting activity and vacant
properties;
– Covenant strength and lease
lengths;
– Estimated rental values; and
– Comparable market evidence.
The Audit and Risk Committee
reviewed the report from the
Chair of the Property Valuation
Committee, including the
assumptions applied to the
valuation and considered their
appropriateness, as well as
considering current market trends
and conditions, and valuation
movements compared to
previous quarters. The Committee
considered the valuation and
agreed that this was appropriate
for the financial statements.
The external auditor has
presented their findings to the
Committee; no areas of concern
or difficulties in performing their
audit procedures were raised
in respect of management
assumptions or judgements
exercised in the preparation
of the financial statements or
matters that needed additional
work. Aside from the key
area of judgement, valuation
of investment properties
(referred to above), there were
no other specific areas which
the Audit and Risk Committee
has identified in conjunction
with the external auditor.
The Risk Management Policy is
intended to:
– Ensure that principal and
emerging risks are reported to
the Board for review;
– Ensure that climate-related
risks and wider sustainability
issues facing the Group are
identified and monitored;
– Result in the management of
those risks that may
significantly affect the pursuit of
the stated strategic goals and
objectives;
– Embed a culture of risk
awareness and evaluation and
identify risks at multiple levels
within the Group; and
– Meet legal and regulatory
requirements.
The Board is also responsible for
internal controls and for reviewing
their effectiveness. It has therefore
established a process designed
to meet the particular needs of
the Company in managing the
risks to which it is exposed.
As part of this process, the
risk matrix which identifies
the Company’s key functions
and related activities, and the
principal risks and related
controls to manage those risks,
is reviewed by the Committee
on a six-monthly basis.
The Committee has received
and reviewed a copy of CBRE
Limited’s Real Estate Accounting
Services – Service Organisation
Control Report as at 31 December
2024, prepared in accordance
with International Standard
on Assurance Engagements
3402, in respect of the suitability
of the design and operating
effectiveness of controls of
the property management
accounting services provided to
Picton Property Income Limited.
There were no issues or areas of
concerns raised in the Control
Report and a bridging letter has
been provided to give comfort
on controls in place for the period
from 1 January to 31 March 2025.
Audit, Risk and Internal Control continued
During the year, the
Committee reviewed
the Risk Management
Policy
Picton Property Income Limited
Annual Report 2025
112
The Committee must approve
in advance all non-audit
assignments to be carried
out by the external auditor.
The fees payable to the Group’s
auditor and its member
firms are as follows:
2025
£000
2024
£000
Audit fees 218 223
Interim review
fees 38 25
Non-audit fees – –
256 248
The external auditor has not been
engaged to perform non-audit
work during the financial year
ending 31 March 2025 (2024: £nil).
External auditor annual
assessment
The Committee is responsible for
assessing the effectiveness and
quality of the external auditor and
the external audit process every
year, taking into consideration
relevant UK professional and
regulatory requirements;
reviewing and monitoring the
external auditor’s independence
and objectivity; and for assessing
annually the external auditor’s
qualifications, expertise and
resources. The Committee
considered the extent to which
the auditor demonstrated
professional scepticism and
challenged management’s
assumptions during the course
of the audit, and confirmed there
were no areas for concern.
In 2024, the assessment
was carried out by way of a
questionnaire for the financial
period under review, which
was prepared by the Company
Secretary, in conjunction
with the Committee Chair.
This was completed by
Committee members and
other key stakeholders.
UK Corporate
Governance Code
changes
The Committee continued
to monitor the status of the
Corporate Governance reforms
throughout the year including
the finalised amended Corporate
Governance Code and related
guidance issued in January 2024.
The Committee received
reports from BDO and KPMG
on the changes during the
year, noting that the most
material changes to the Code
relate to internal controls.
Internal audit
BDO provides internal audit
and assurance services to
the Group. The Committee
agreed a programme of
reviews for 2024/25, which
covered capital expenditure,
IT controls and a follow up on
previous recommendations.
The Committee has considered
the review reports and the
recommendations arising,
which had been discussed with
management. The Committee
has discussed with BDO the
timing for the next programme
of reviews for 2025/26 taking
into account a number of new
systems which have been
introduced into the business
in the early part of 2025. As a
result, it was agreed that the
Committee would consider
BDO’s review plan for the year
at its October 2025 meeting.
External auditor
independence
The Group operates a policy
that non-audit work will not be
awarded to the external auditor if
there is a risk their independence
may be compromised. The
Committee monitors the level
of fees incurred for non-audit
services to ensure that this
is not material, and obtains
confirmation, where appropriate,
that separate personnel are
involved in any non-audit
services provided to the Group.
As part of the review of auditor
independence and effectiveness,
KPMG Channel Islands Limited
have confirmed that:
– They have internal procedures
in place to identify any aspects
of non-audit work which could
compromise their role as
auditor and to ensure the
objectivity of their work and
audit report;
– The total fees paid by the Group
during the year do not
represent a material part of
their total fee income; and
– They consider that they have
maintained their independence
throughout the year.
KPMG Channel Islands Limited
have been external auditor
to the Group since the year
ended 31 December 2009.
They were reappointed as
the Group’s external auditor
following a tender process in
February 2020. The current audit
engagement partner, Steve
Stormonth, has completed
three years as audit partner.
The Committee concluded from
the results of the assessment
that it was satisfied as to the
qualifications and expertise of
the KPMG audit partner and
team and that they remained
confident that their objectivity
and independence was not in
any way impaired by reason of
any non-audit services which
they provided to the Group.
The Committee recommends
that KPMG Channel Islands
Limited are recommended
for reappointment at the next
Annual General Meeting.
The Committee also considers
the external audit plan, setting
out the auditor’s assessment
of the key audit risk areas and
reporting received from the
external auditor in respect of
both the half-year and year-
end reports and accounts.
Mark Batten
Chair of the Audit and Risk
Committee
21 May 2025
Picton Property Income Limited
Annual Report 2025
113
Strategic
Report Governance
Financial
Statements
Additional
Information
Audit, Risk and Internal Control continued
Property Valuation
Committee
Focus areas for 2024/2025
/ Appointment of new valuer
/ Review of quarterly valuations
Richard Jones
Chair of the Property Valuation Committee
Picton Property Income Limited
Annual Report 2025
114
Terms of reference
The Committee’s responsibilities
are set out in its terms of
reference, which are reviewed
annually. These include reviewing
the quarterly valuation reports
produced by the external valuer
before their submission to the
Board, looking in particular at:
– Significant adjustments from
previous quarters;
– Individual property valuations;
– Commentary from
management;
– Significant asset specific issues
that should be raised with
management;
– Material and unexplained
movements in the Company’s
net asset value;
– Compliance with applicable
standards and guidelines;
– Reviewing findings or
recommendations of the
valuer; and
– The appointment,
remuneration and removal of
the Company’s valuer, making
such recommendations to the
Board as appropriate.
Activity
The Committee met four times
during the year ended 31 March
2025. In addition, members of the
Property Valuation Committee,
together with management,
met with the external valuer,
CBRE, each quarter to review
the valuations and underlying
assumptions, included in the
year-end valuation process.
These valuations are undertaken
in accordance with the Royal
Institution of Chartered
Surveyors Red Book valuation
standards. The matters which
were considered included:
– Property market conditions and
trends;
– Movements compared to
previous quarters;
– Yields on properties within the
portfolio;
– Letting activity and vacant
properties;
– Covenant strength and lease
lengths;
– Estimated rental values; and
– Comparable market evidence.
At the April 2024 meeting, the
Committee considered the
market trends that were evident
over the course of the year and
concluded these had been
fully reflected by the external
valuer in the quarterly valuation
reports. The Committee was
also satisfied with the valuation
process throughout the year.
At the July 2024 meeting, the
Committee considered and
agreed the proposed approach
and timeline for the tender
process for the selection and
appointment of a new valuer.
At the October 2024 meeting,
a member of the CBRE team
presented to the Committee
on the current real estate
market and future outlook and
emerging trends. In addition,
the Committee received an
update on the timetable to
appoint a new valuer.
At the January 2025 meeting,
the Committee considered the
recommendation to appoint
Knight Frank as the new valuer
in place of CBRE. The Committee
also reviewed its performance
and effectiveness as part of
the wider internal Board and
Committee evaluation process
with the conclusion drawn
that the Committee continued
to operate effectively.
External valuer
and appointment
of new valuer
CBRE Limited has been the
Group’s external valuer since 2013,
responsible for carrying out a
valuation of the Group’s property
assets each quarter, the results
of which are incorporated into
the Group’s half-year and annual
financial statements, and the
quarterly net asset statements.
In last year’s Annual Report,
the Committee highlighted the
new RICS’ rules on mandatory
rotation of UK valuers, with the
new requirements to change the
valuation firm valuing the same
assets every ten years, with the
valuer within the valuation firm
to be changed every five years.
The Committee delegated to the
Chair and management to lead
on the selection process for a
new valuer with a view to making
an appointment in good time to
allow for a period of overlap and
a smooth handover. Following a
robust selection process, Knight
Frank were appointed by the
Board, to take effect for the June
2025 quarter end valuation.
Knight Frank’s selection was
based on a number of factors
including their processes,
knowledge and expertise in
the asset classes we invest
in. As part of the transition,
Knight Frank agreed to produce
a shadow valuation for the
March 2025 quarter end,
which was reviewed by the
Committee and management.
On behalf of the Committee and
management, I would like to
express my thanks to CBRE for
their excellent service over the
previous 13 years, in their work as
external valuer to the Company.
Richard Jones
Chair of the Property Valuation
Committee
21 May 2025
The Property
Valuation
Committee is
chaired by Richard
Jones. The other
members of the
Committee are
Mark Batten, Helen
Beck and Francis
Salway. Maria
Bentley and Lena
Wilson stepped
down as members
of the Committee
during the year.
We have appointed
a new external valuer,
effective June 2025.
Picton Property Income Limited
Annual Report 2025
115
Strategic
Report Governance
Financial
Statements
Additional
Information
Remuneration Report
Remuneration
Committee
Focus areas for 2024/2025
/ Executive Director Remuneration
/ Employee Remuneration
/ LTIP vesting and awards
/ Non-Executive Director
and Chair fees
Helen Beck
Chair of the Remuneration Committee
Picton Property Income Limited
Annual Report 2025
116
Terms of reference
The principal functions of the
Committee as set out in the
terms of reference include
the following matters:
– Review the ongoing
appropriateness and relevance
of the Directors’ Remuneration
Policy;
– Determine the remuneration of
the Chair, Executive Directors
and such members of the
executive management as it is
designated to consider;
– Review the design of all share
incentive plans for approval by
the Board; and
– Appoint and set the terms of
reference for any remuneration
consultants.
Advisers
During the year, Deloitte LLP
has provided independent
advice in relation to market data,
share valuations, share plans
administration and content of
the Remuneration Report. Total
fees for the year were £24,450
(calculated on a time spent
basis). Deloitte LLP is a founding
member of the Remuneration
Consultants Group and, as such,
voluntarily operates under the
Code of Conduct in relation
to executive remuneration
consulting in the UK. In addition,
Deloitte also provided taxation
services and advice to the
Company during the year. The
Committee has reviewed the
nature of this additional advice
and is satisfied that it does not
compromise the independence
of the advice that it has received.
Annual statement
Dear Shareholders
Introduction
I am delighted to have joined the
Board, and be appointed as Chair
of the Remuneration Committee
with effect from 1 August 2024.
I would like to thank Maria
Bentley, my predecessor, for her
contribution during her tenure.
On behalf of the Board, I am
pleased to introduce the
Remuneration Committee Report
for the year ended 31 March 2025.
This report comprises
three sections:
– This annual statement;
– Summary of Remuneration
Policy; and
– The Annual Report on
Remuneration for the year
ended 31 March 2025.
The Committee had five
scheduled meetings during
the year and attendance
can be found on page 93.
I would like to thank shareholders
for their support at the 2024 AGM
and approval of Remuneration
Report and revised Remuneration
Policy (the ‘Policy’), which received
99% of the votes in favour.
The key areas of focus during
the year were approval of
Executive Director’s variable
remuneration and annual salary
increases, and the assessment
the variable targets as part
of the 2022 LTIP vesting.
The Committee also approved
the grant of awards under the
Company’s share schemes
and reviewed the employees’
remuneration to ensure
this remained aligned with
the Executive Directors.
Group performance and
alignment
We have set out on pages 20
to 23, the Key Performance
Indicators (KPIs) that we
currently use to monitor the
success of the business.
All employees, including
Executive Directors, are
part of the LTIP share plans
which ensures alignment
across the whole business
and vest over three years.
In addition, all employees are
subject to bonus deferrals which
are linked to the Company’s share
price and deferred over two years.
In order to appropriately align
remuneration with business
performance we incorporate
KPI metrics within our incentive
schemes so they determine
an element of variable
remuneration. These are set
out in the table overleaf.
In assessing Company
performance, the Committee
has considered the three
strategic pillars and notes
the following highlights:
Portfolio Performance
– Total Property Return: 7.3%
ahead of MSCI Index of 6.3%
– Property Income Return: 5.2%
ahead of MSCI Index 4.8%
– Reduction in vacancy rate from
9.2% to 6.2%
Operational Excellence
– EPRA EPS 4.2 pence an
increase of 5%
– Total Return: 8.1%
– EPRA NTA increase of 4% to 100
pence per share
Acting Responsibly
– Total Shareholder return 16.0%
– EPC ratings (A-C) increased
from 80% to 83%
Remuneration
for the year ending
31 March 2025
Directors’ remuneration will
be paid in line with the Policy,
which was approved by the
shareholders at the 2024 AGM.
Annual bonus
The Executive Directors’ annual
bonus is based on both financial
and corporate metrics. The
financial metrics comprise 60%
and are based equally on Total
Property Return (TPR) relative
to MSCI and Total Return (TR)
relative to a peer group.
The Remuneration
Committee is
chaired by Helen
Beck who joined
on 1 August 2024
when Maria Bentley
stood down.
The other
members of the
Committee are
Mark Batten,
Richard Jones and
Francis Salway.
Francis joined on
1 February 2025
when Lena Wilson
stood down.
Other attendees
at Committee
meetings
during the year
were Michael
Morris and Saira
Johnston. Neither
participated in
discussions relating
to their own
remuneration.
Our remuneration
approach supports
strong alignment
between Company
performance and
the team.
Picton Property Income Limited
Annual Report 2025
117
Strategic
Report Governance
Financial
Statements
Additional
Information
The corporate metrics
comprise 40% and are based
on a number of objectives
across the Company’s three
strategic priorities for the
year ending 31 March 2025.
At the date of this report, not
all companies in the peer
group have announced their
results to 31 March 2025 and
the TR outcome is therefore an
estimate of the expected result.
Based on the performance
during the year and this estimate,
the annual bonus payment is
68% of the maximum. Further
details on the outcomes can be
found on page 125, and further
details on the Company’s KPI
performance can be found on
pages 20 to 23. An amount equal
to 55% of the annual bonus will be
deferred for two years in shares.
When the final outcomes are
known, the Remuneration
Committee will determine
whether it is satisfied that the
actual outcome is a fair reflection
of overall Group performance
during the past year.
When considering the
annual bonus metrics, the
Committee noted the following
in relation to the TR metric
and comparator group:
– Size: this has reduced
significantly due to corporate
activity in the listed real estate
market. As at 31 March 2025 the
peer group consisted of seven
companies (2024: nine, 2023: 11)
– Estimates: at the date of this
report, only two of the
companies in the group had
announced their results to
31 March 2025. The Committee
has therefore estimated that
Variable remuneration metrics for year ending 31 March 2025
Measure Comparator
Annual bonus
1 year
LTIP
3 year
Corporate objectives
40%
Financial metrics
Total return (TR) Relative to peer group
30%
Total property return (TPR) MSCI UK Quarterly Property index
30% 33%
Total shareholder return (TSR) Relative to peer group
33%
EPRA EPS Absolute target range
33%
this metric will be partially met
but this needs to be finalised
once all remaining peer results
are published. Any adjustment
will be included in next year’s
Remuneration Report
Long-term Incentive Plan
awards (performance period to
31 March 2025)
The LTIP is designed to ensure
alignment between employees
and the long-term success of
the Company. For awards made
under the LTIP in June 2022,
vesting is calculated based
on three equally weighted
performance conditions,
measured over a three year
period to 31 March 2025.
Based on the Total Shareholder
Return (TSR), TPR and EPS
metrics, the 2022 LTIP will
vest at 45% of the awards
granted. Further details on
the Chief Executive awards
can be found on page 126.
When approving, the Committee
considered whether the
formulaic outcomes of the LTIP
represented a fair reflection of
the underlying performance in
the period, and concluded no
adjustment was appropriate.
Remuneration
for the year ending
31 March 2026
The Committee has reviewed
the Executive Directors’ variable
remuneration and annual
salary increases, to determine
the appropriate basis for the
year ending 31 March 2026,
in line with the Policy.
Remuneration Report continued
100%
of employees
participate in
employee share
schemes
100%
of employees
subject to bonus
deferrals linked to
share price
Salary reviews
The Committee reviewed the
salary increases of the Executive
Directors and considered the
increases for other employees
as part of the process.
Reflecting the individual and
business performance, we have
approved increases of 2.5%
for the Executive Directors to
take effect from 1 April 2025.
This compares to an increase
of 3% across all employees.
Annual bonus measures
The Executive Directors will
have an unchanged maximum
annual bonus opportunity of
145% of salary. The bonus will be
determined 40% by corporate
objectives, set by the Committee
at the beginning of the year, and
60% by financial metrics. The
financial metrics will be consistent
with previous years, and equally
weighted, however, due to the
reduced peer group, the TR
metric will be an absolute metric,
with appropriate Remuneration
Committee discretion. This is
to address the decreasing size
and nature of the comparator
group and allow calculation of
the metric at the reporting date.
2025 LTIP awards
The Chief Executive will be
awarded shares worth 125% of
salary which is consistent with the
application of our policy since the
Company converted to a REIT in
2018. Metrics are expected to be
the same as the June 2024 award
with the exception of a change to
the EPRA NAREIT UK Index, as the
TSR comparator group, due to a
peer group which is diminishing
in size as discussed above.
Our internal policy is that new
employees are not typically
entitled to be granted an LTIP
award during their first year
of employment. However,
the first LTIP award granted
following this period may,
subject to performance, be
larger than standard (albeit
capped at the policy limit of
150% of salary), to ensure the
individual is fairly rewarded for
their period of employment.
Picton Property Income Limited
Annual Report 2025
118
All employees participate in
our employee share award
scheme and bonus deferrals.
In line with this policy, the CFO
was not granted an LTIP award
in June 2024. The CFO has
performed strongly since her
appointment and the Committee
has therefore determined that
she should be granted a larger
than standard award of shares
worth 150% of salary in June 2025.
Shares worth 40% of salary will
be subject to the three-year
performance conditions that
applied to all other employees’
June 2024 LTIP grant and the
remainder of the award (shares
worth 110% of salary) will be
subject to the same three-year
performance conditions as apply
to all other LTIP awards granted
in June 2025. The Committee
agreed this performance
structure to ensure that the CFO is
appropriately incentivised relative
to her period of employment
(i.e. from April 2024) and also
to provide alignment with the
performance conditions for
awards granted to the Chief
Executive and other employees
since her appointment.
Employee remuneration
and engagement
The Committee has reviewed
employee remuneration and
sought feedback from salary
surveys and recruitment agencies.
The Committee determined
that there would be an overall
average rise of 3% in base salaries
with effect from 1 April 2025.
In addition the total annual
employee bonus, excluding
Executive Directors, is expected to
be circa 50% of salaries reflecting
the continued outperformance
but also the market conditions.
During the year, and as part of
my onboarding I have met the
team and also discussed the
results of the annual employee
engagement survey. The results
continue to demonstrate a high
level of satisfaction among the
team although I am mindful
of the reduction during the
year and will be working with
the team to address this.
UK Corporate
Governance Code
We have considered the
provisions of the Code in respect
of remuneration and believe
that our approach remains
compliant. In particular, we
operate a consistent level of
pension provision across our
workforce; LTIP awards are only
released to Executive Directors
after the three-year vesting
period and the two-year hold
period; and malus and clawback
provisions apply to all incentive
awards. We have provisions in the
rules of our remuneration share
plans that prevent, other than
in exceptional circumstances,
accelerated vesting of awards
when an employee leaves Picton.
We also have post-employment
shareholding guidelines in place.
The Remuneration Policy and its
components are clearly set out
in this report and the rules of the
variable remuneration schemes
are available to all employees.
We use standard performance
metrics, which are also key
performance indicators for the
business, to create alignment
and determine awards. There
are clear target and maximum
levels for each metric.
The Committee believes that the
variable remuneration schemes
in place are fair and proportionate
and align the remuneration
of the team with the Group’s
performance. We are also satisfied
that the remuneration structure
does not encourage inappropriate
risk-taking. The Committee does
retain discretion over formulaic
outcomes if it considers that
these are not a fair reflection
of the Group’s performance.
Chair and Non-Executive
Director fees
The Committee has reviewed the
fees and approved an increase
of 2.5% in line with the Executive
Directors. The Committee notes
that the incoming Chair and
Non-Executive Director during
the year remained on the same
fee basis as their predecessors.
Conclusion
The Committee continues to be
satisfied that the remuneration
structure continues to support
the medium to long term
value to shareholders.
I would like to thank shareholders
for their support. I am
committed to maintaining
an ongoing dialogue with
shareholders and welcome any
questions ahead of the AGM.
I will be attending the 2025
AGM and would be pleased
to answer any questions you
may have on this report.
Helen Beck
Chair of the Remuneration
Committee
21 May 2025
Scan or click here to
see our Remuneration
Policy on our website
Picton Property Income Limited
Annual Report 2025
119
Strategic
Report Governance
Financial
Statements
Additional
Information
33% 33%
33%
Three year
C
o
r
p
o
r
a
t
e
o
b
j
e
c
t
i
v
e
s
F
i
n
a
n
c
i
a
l
c
o
n
d
i
t
i
o
n
s
F
i
n
a
n
c
i
a
l
c
o
n
d
i
t
i
o
n
s
30%
30%
13.3%
13.3%
13.3%
One year
Remuneration Report continued
Remuneration at a glance
The components of remuneration for the year ending 31 March 2025
Benefits
Pension
Base salary
Fixed pay
Variable pay
Annual bonus metrics
LTIP metrics
Total return
Total property return
Portfolio performance
Operational excellence
Acting responsibly
Total shareholder return
Total property return
EPRA EPS
For more information on
performance conditions and
assessment, see page 125
Picton Property Income Limited
Annual Report 2025
120
57
375
150
443525
380
6
36
236
240
276236
x
x
x
x
1
9
8
5
297
100%
5 3% 33% 14%
30% 38%
32%
26% 32% 28% 14%
£457K
£862K
£1,510K
£1,753K
17%
15%
100%
51% 32%
28% 35%
24% 30%
37%
31%
£283K
£554K
£1,009K
£1,193K
968 512 302
The single figure of remuneration for the Directors for the year ending 31 March 2025 (in £000s)
The potential remuneration of the Executive Directors for the year ending 31 March 2026
Chief Executive
Chief Executive
The following charts show the
composition of the Executive
Directors’ remuneration at three
performance levels:
Fixed pay – base salary from 1 April
2025, benefits and pension salary
supplement of 15% of base salary
On target – fixed pay plus target
vesting for the annual bonus (at 50% of
maximum opportunity for illustrative
purposes) and threshold vesting for
the LTIP (at 25% of maximum award)
Maximum – fixed pay plus maximum
vesting for both the annual bonus (145%
of base salary) and the LTIP 125% of base
salary (Chief Executive) and 150% (CFO)
Maximum with share price growth
– maximum scenario incorporating
assumption of 50% share price
growth during LTIP vesting period
Other than where stated, the charts do not
incorporate share price growth or dividend
equivalent awards.
Non-Executive DirectorsChief Financial Officer
Chief Financial Officer
Salary
Benefits
Pension
Annual bonus
Long-term
incentive pay (LTIP)
Total fixed
Total variable
Total fixed
Annual bonus
Long-term
incentive pay (LTIP)
Share growth
Picton Property Income Limited
Annual Report 2025
121
Strategic
Report Governance
Financial
Statements
Additional
Information
Remuneration Report continued
Directors’
Remuneration Policy
A summary of the Remuneration Policy approved at the 2024 AGM is shown below and on the page overleaf.
Remuneration Policy Table
Base salary
Purpose A base salary to attract and retain Executives of appropriate quality to deliver the Group’s strategy.
Operation Base salaries are normally reviewed annually with changes effective on 1 April. When setting base salaries the
Committee will consider relevant market data, as well as the scope of the role and the individual’s skills and experience.
Maximum No absolute maximum has been set for Executive Director base salaries.
Any annual increase in salaries is set at the discretion of the Remuneration Committee taking into account the factors
stated in this table and the following principles:
– Salaries would typically be increased at a rate no greater than the average employee salary increase
– Larger increases may be considered appropriate in certain circumstances (including, but not limited to, a change in an
individual’s responsibilities or in the scale of their role or in the size and complexity of the Group)
– Larger increases may also be considered appropriate if a Director has been initially appointed to the Board at a lower
than typical salary
Benefits
Purpose Part of competitive remuneration package.
Operation This principally comprises:
– Private medical insurance
– Life assurance
– Permanent health insurance
The Committee may agree to provide other benefits as it considers appropriate.
Maximum Benefits are provided at market rates.
Pension
Purpose Part of a competitive remuneration package.
Operation The Company has established defined contribution pension arrangements for all employees. For Executive Directors
the Company currently pays a monthly salary supplement in lieu of Company pension contributions, although retains
discretion to alternatively offer the defined contribution arrangements.
Maximum A consistent rate of pension provision applies to all employees, including Executive Directors.
Annual bonus
Purpose A short-term incentive to reward Executive Directors on meeting the Company’s annual financial and strategic targets
and on their personal performance.
Operation At least 50% of the annual bonus will be paid in the Company’s shares and deferred for two years. The Committee has
discretion to amend the required level of deferral upwards or downwards as appropriate including discretion to waive
the requirement for deferral for a departing Executive Director or where dealing restrictions prevent share awards
being granted. Any use of this discretion would be clearly disclosed and explained in the relevant Remuneration
Report. Dividend equivalents will be paid at the end of the deferral period (in the form of shares or cash).
Maximum The maximum bonus permitted under the Policy will be 175% of base salary.
Scan or click here to
see our Remuneration
Policy on our website
Picton Property Income Limited
Annual Report 2025
122
Annual bonus continued
Performance
measures
The annual bonus is based on a range of financial, strategic, ESG, operational and individual targets (measured over a
period of up to one year) set by the Committee. The weightings will also be determined annually to ensure alignment
with the Company’s strategic priorities, although at least 50% of the award will usually be assessed on corporate
financial measures.
For corporate financial measures, 50% of the maximum bonus opportunity will be payable for on-target performance
and, if applicable, up to 25% for threshold performance.
Clawback Malus and clawback provisions may be applied in the event (within two years of bonus determination/grant of the
deferred bonus shares) of a material misstatement of the audited financial results, an error in assessing a performance
condition applicable to the award or in the information or assumptions on which the award was granted or is released,
a material failure of risk management, material misconduct on the part of the award holder or a corporate failure.
Long-term Incentive Plan
Purpose Align Executive Directors’ interests with those of shareholders and to promote the long-term success of the Company.
Operation Awards are granted annually usually in the form of a conditional share award or nil cost option.
Awards will normally vest at the end of a three-year period subject to meeting the performance conditions and
continuing employment.
The Remuneration Committee may award dividend equivalents (in the form of shares or cash) on awards that vest.
The Committee will usually apply a holding period of a further two years to awards that vest.
Maximum Annual awards with a maximum value of up to 150% of base salary may be made.
Performance
measures
Vesting will be subject to performance conditions, aligned to the corporate strategy, as determined by the Committee on
an annual basis. The Committee has the flexibility to vary the number of conditions and their weighting for each award.
For threshold levels of performance up to 25% of the award vests, rising usually on a straight-line basis to 100% for
maximum performance.
Clawback Malus and clawback provisions may be applied in the event (within five years of grant) of a material misstatement of
the audited financial results, an error in assessing a performance condition applicable to the award or in the
information or assumptions on which the award was granted or is released, a material failure of risk management,
material misconduct on the part of the award holder or a corporate failure.
Shareholding guidelines
Purpose To align Executive Directors with the interests of shareholders.
Operation Whilst in employment, Executive Directors are expected to build up and thereafter maintain a minimum shareholding
equivalent to 200% of base salary.
The Committee will review progress towards the guideline on an annual basis and has the discretion to adjust the
guideline in what it feels are appropriate circumstances.
Executive Directors will also be expected to remain compliant with the above guideline for a period of two years
post-employment. The Committee retains discretion to waive this guideline if it is not considered appropriate in the
specific circumstances.
Maximum Not applicable
Fees
Purpose To provide competitive Director fees.
Operation Annual fee for the Chair, and annual base fees for other Non-Executive Directors.
Additional fees for those Directors with additional responsibilities such as chairing a Board Committee, acting as Senior
Independent Director or where a Director incurs significant additional time commitment. Additional fees would also be
payable in the event a Non-Executive Director temporarily took on an Executive Director role. All fees will be payable
monthly in arrears in cash.
Fees will usually be reviewed independently every three years.
The independent Non-Executive Directors are not eligible to receive share options or other performance-related
elements or receive any other benefits other than where travel to the Company’s registered office is recognised as a
taxable benefit in which case a Non-Executive Director may receive the grossed-up costs of travel as a benefit.
Non-Executive Directors are entitled to reimbursement of reasonable expenses.
Maximum The Company’s Articles set an annual limit for the total of Non-Executive Directors’ remuneration of £425,000.
Other No performance measures or clawback.
Picton Property Income Limited
Annual Report 2025
123
Strategic
Report Governance
Financial
Statements
Additional
Information
Remuneration Report continued
Annual Report on Remuneration
Breakdown of Directors’ total remuneration in the year ending 31 March 2025
Salary/fees
£000
Benefits
£000
Pension
salary
supplement
£000
Total fixed
£000
Annual
bonus
£000
Deferred
bonus
£000
Long-term
Incentive
Plan
£000
Total
variable
£000
Total
£000
Executive
Michael Morris 2025 380 6 57 443 169 206 150 525 968
2024 380 4 57 441 133 163 154 450 891
Saira Johnston 2025 240 – 36 276 106 130 – 236 512
2024 – – – – – – – – –
Andrew Dewhirst 2024 259 4 39 302 90 111 92 293 595
Non-Executive
Lena Wilson 2025 93 5 – 98 – – – – 98
2024 122 6 – 128 – – – – 128
Mark Batten 2025 61 – – 61 – – – – 61
2024 55 – – 55 – – – – 55
Maria Bentley 2025 19 – – 19 – – – – 19
2024 55 – – 56 – – – – 56
Richard Jones 2025 56 – – 56 – – – – 56
2024 55 – – 55 – – – – 55
Helen Beck 2025 37 – – 37 – – – – 37
2024 – – – – – – – – –
Francis Salway 2025 31 – – 31 – – – – 31
2024 – – – – – – – – –
Total (audited) 2025 917 11 93 1,021 275 336 150 761 1,782
2024 926 15 96 1,037 223 274 246 743 1,780
Benefits for the Executive Directors comprise private medical insurance and life assurance. Non-Executive Directors are reimbursed
expenses incurred in connection with travel and attendance at Board meetings. These expenses are taxable where the meetings take
place at the Company’s main office. The Company settles the tax on behalf of the Non-Executive Directors.
Executive Directors receive a salary supplement of 15% of base salary in lieu of Company pension contributions.
The above figures for 2024 Executive Directors’ LTIP have been restated to reflect the actual share price at vesting (67.03 pence) rather
than the average for the quarter ended 31 March 2024 (62.63 pence). The restatement represents an increase in the value of the 2024
LTIP awards of £9,000 for Michael Morris and £5,000 for Andrew Dewhirst.
The value of LTIP awards for 2025 is based on the number of shares to be awarded to the Executive Directors in respect of the June
2022 LTIP awards and the average share price over the quarter ended 31 March 2025 of 65.26 pence, and the estimated value of
dividend equivalents.
Payments to past Directors or payments for loss of office
Andrew Dewhirst retired on 31 March 2024. Andrew Dewhirst was retained by the Company on a short-term employment contract
until 30 June 2024, to ensure an orderly transition with Saira Johnston. At the end of this contract, he received a final payment of
£30,000 as compensation for termination of his employment and no other payments in relation to his outstanding notice period.
Full details of his arrangement are disclosed in the 2024 Remuneration Report. Andrew’s 2021 LTIP arrangement vested in June 2024,
and in line with previously disclosed arrangements he is treated as a good leaver under the provisions in the relevant Plan rules. His
2022 and 2023 LTIP awards are time pro-rated and subject to performance conditions.
Picton Property Income Limited
Annual Report 2025
124
Executive Directors remuneration for the year end 31 March 2025
Annual bonus
The annual bonus for the year ended 31 March 2025 for the Executive Directors was based on two financial metrics weighted equally
(60%) and corporate objectives (40%).
In respect of one financial metric, relating to total return, at the date of this report not all of the companies in the total return
comparator group had announced their results to 31 March 2025. The Committee has estimated, based on the results to date, that this
condition will be met, resulting in an outcome of 51% against this metric. The Committee will determine the actual outcome of this
condition once all companies have reported, and any adjustment required between the estimate and actual will be made in next
year’s Remuneration Report. There will be no payout of the bonus until a finalised result can be confirmed.
Annual bonus – financial metric outcomes
Performance condition Basis of calculation Range Actual
Awarded
(% of maximum)
Awarded
(% of salary)
Total return versus
comparator group
Bonus weighting: 30%
Less than median – 0%
Equal to median – 50%
Equal to upper quartile – 100%
Not yet available 8.1% 15%
(estimate)
22%
(estimate)
Total property return
versus MSCI Index
Bonus weighting: 30%
Less than median – 0%
Equal to median – 50%
Equal to upper quartile – 100%
Median 6.3%
Upper quartile 8.6%
7.3% 22% 32%
Annual bonus – corporate objective outcomes
Performance condition Assessment
Awarded
(% of maximum)
Awarded
(% of salary)
Portfolio performance
Bonus weighting: 13.3%
– Completed three disposals (£51 million) of repositioned office assets and
reduced offices exposure from 30% to 24%
– Reduced void costs and underlying net rental income growth of 2.4%
– Outperformed the MSCI benchmark on an income and total return basis
(100bps of outperformance)
– Reduced vacancy from 9.2% to 6.2%
11% 16%
Operational excellence
Bonus weighting: 13.3%
– NAV growth of 4% to 100pps
– EPRA earnings growth of 5% to 4.2pps
– Reduced gearing to 24%
– Upgrades to systems and processes to improve efficiency
9% 13%
Acting responsibly
Bonus weighting: 13.3%
– Significant improvements in decarbonisation and improvement in EPC
ratings from 80% to 83%
– Improved scores on occupier engagement
– High employee retention and engagement
– Total shareholder return of 16% and broadened the shareholder register
– Updated ESG strategy, priorities and progressed pathway to net zero
11% 16%
As discussed in the Committee Chair’s statement on pages 116 to 119, the Committee will consider the formulaic bonus outcome in the
context of the Group’s overall performance for the year when the final comparator group results are available.
Subject to the estimated total return component noted above, the overall annual bonus outcome for the Executive Directors is set out
in the table below:
Max bonus
opportunity
1
Financial metrics
(out of maximum
60%)
Corporate
objectives (out of
maximum 40%)
Overall bonus %
of maximum
Bonus % of
salary
Total bonus
£000
Michael Morris 145% 37% 31% 68% 99% 375
Saira Johnston 145% 37% 31% 68% 99% 236
In line with the Policy, the Committee has determined that 55% of this year’s bonus award will be deferred. This element is paid in
shares in two years’ time with a cash amount equivalent to the dividends accrued since the award date.
Picton Property Income Limited
Annual Report 2025
125
Strategic
Report Governance
Financial
Statements
Additional
Information
Long-term Incentive Plan
The LTIP awards granted on 22 June 2022 were subject to performance conditions for the three years ended 31 March 2025. Based on
the performance over the period, it is anticipated that the LTIP will vest at 45% of the awards granted.
2022 LTIP award performance conditions
Performance condition Basis of calculation Range Actual
Weighting
(% of award)
Awarded
(% of maximum)
Total shareholder return
versus comparator group
(and absolute TSR underpin)
Less than median – 0%
Equal to median – 25%
Equal to upper quartile – 100%
N/A Negative TSR
so underpin
failed
33.3% 0%
Total property return versus
MSCI Index
Less than median – 0%
Equal to median – 25%
Equal to upper quartile – 100%
Median – (2.51%)
Upper quartile – (0.47%)
(0.15%)
(above upper
quartile)
33.3% 100%
Growth in EPRA EPS For the year ended 31 March 2025
Less than 4.15 pps: 0%
Equal to 4.15 pps: 25%
Between 4.15 pps and 4.50 pps:
straight line basis between 25% and 100%
N/A 4.20p 33.3% 35%
The Committee was satisfied that the above performance was achieved within an acceptable risk profile. As discussed in the
Committee Chair’s statement on pages 116 to 119, the Committee considered the formulaic LTIP outcome in the context of the Group’s
overall performance over the performance period and concluded that it was satisfied the formulaic outcome was a fair reflection of
overall Group performance during the period.
Based on the vesting percentage above, the shares awarded and their estimated values using an average share price of 65.26 pence
for the quarter ended 31 March 2025 are shown below. The share awarded are subject to a further two year post performance holding
period.
2022 LTIP awards to Executive Directors
Director
Maximum
number of shares
at grant
Number of
shares vesting
Number of
lapsed shares
Estimated
value
1,2
£
Michael Morris 437,473 197,279 240,194 149,952
1. The estimated value includes dividend equivalent awards which will be made in relation to vested LTIP awards at the point of vesting. The value of the dividend equivalent
awards is £21,207 (Michael Morris).
2. The average share price for the quarter ended 31 March 2025 is lower than the share price at grant so there has been no share price growth in the estimated value of the
awards.
2024 LTIP awards to Executive Directors
The following awards in the Long-term Incentive Plan were granted to the Executive Directors on 6 June 2024:
Number
of shares
Basis
(% of salary)
Face value
per share
(£)
Award
face value
(£) Performance period
Threshold
vesting
Michael Morris 528,316 93.75% 0.6747 356,455 1 April 2024 to 31 March 2027 25%
The face value is based on a weighted average price per share, being the average of the closing share prices over the three business
days immediately preceding the award date. Awards will vest after three years subject to continued service and the achievement of
three equally weighted performance conditions (relative total shareholder return and absolute TSR underpin, relative total property
return and EPRA EPS).
At grant the companies in the TSR comparator group consisted of: abrdn Property Income Trust Limited, AEW REIT plc, Balanced
Commercial Property Trust Limited, Custodian REIT plc, New River REIT plc, Regional REIT Limited, Schroder Real Estate Investment
Trust Limited, Supermarket Income REIT PLC, Urban Logistics REIT PLC, Warehouse REIT plc, Workspace Group PLC.
The vesting schedule for the relative measures will be as applied to the June 2022 LTIP set out above. The EPS element will vest at 25%
for achievement of EPRA EPS of 4.2 pence in the year ended 31 March 2027 increasing on a straight-line basis to 100% vesting for EPRA
EPS of 4.6 pence.
Remuneration Report continued
Picton Property Income Limited
Annual Report 2025
126
Summary of Executive Directors share awards
Awards under the Long-term Incentive Plan normally vest three years after the grant date and are subject to a further two-year
holding period. Awards under the Deferred Bonus Plan normally vest two years after the grant date.
Outstanding number of awards under LTIP and Deferred Bonus Plan
Date of grant Performance period
Market value
on date of
grant At 1 April 2024
Granted
inyear
Exercised
inyear Lapsed in year
As at
31 March 2025
Michael Morris
2021 LTIP 22 June 2021 1 April 2021 to
31 March 2024
89.10p 403,339 – (198,321) (205,018) –
2022 LTIP 17 June 2022 1 April 2022 to
31 March 2025
94.47p 437,473 – – – 437,473
2023 LTIP 14 June 2023 1 April 2023 to
31 March 2026
78.10p 456,408 – – – 456,408
2024 LTIP 6 June 2024 1 April 2024 to
31 March 2027
67.47p – 528,316 – – 528,316
2022 DBP 17 June 2022 1 April 2021 to
31 March 2022
94.47p 159,555 – (159,555) – –
2023 DBP 14 June 2023 1 April 2022 to
31 March 2023
78.10p 301,997 – – – 301,997
2024 DBP 6 June 2024 1 April 2024 to
31 March 2026
67.47p – 241,129 – – 241,149
1,758,772 769,445 (357,876) (205,018) 1,965,323
Saira Johnston
2024 DBP 6 June 2024 1 April 2024 to
31 March 2026
67.47p – 355,713 – – 355,713
– 355,713 – – 355,713
Statement of Directors’ shareholdings
Directors and employees are encouraged to maintain a shareholding in the Company’s shares to provide alignment with investors.
Executive Directors are required to maintain a shareholding of 200% of base salary and the CFO is currently in the process of building
up to the required shareholding. The Executive Directors intend to retain at least 50% of any share awards (post-tax) until the
guidelines are met.
Director shareholdings including connected persons
Beneficial holding
2025
Beneficial holding
2024
Holding as a
% of salary
1
Outstanding LTIP
awards
Outstanding DBP
awards
Michael Morris 1,114,789 925,454 210% 1,422,197 543,126
Saira Johnston 35,434 – 11% – 355,713
Francis Salway – – – – –
Mark Batten 38,000 38,000 – – –
Helen Beck – – – – –
Richard Jones 53,845 53,845 – – –
1. The holding as a percentage of salary does not include the DBP awards
The percentage holding for the Executive Directors is based on base salaries as at 31 March 2025 and a share price of £0.717.
Andrew Dewhirst is required under the Executive Director shareholding guidelines post office to retain his shareholding. Awards
outstanding comprise of 369,291 of DBP awards and 310,145 of LTIP awards.
There have been no changes in these shareholdings between the year end and the date of this report.
Picton Property Income Limited
Annual Report 2025
127
Strategic
Report Governance
Financial
Statements
Additional
Information
Historical total shareholder return performance
The graph below shows the Company’s total shareholder return (TSR) since 31 March 2015 as represented by share price growth with
dividends reinvested, against the FTSE All-Share Index and the FTSE EPRA NAREIT UK Index. These indices have been chosen as they
provide comparison against relevant sectoral and pan-sectoral benchmarks.
TSR: Picton versus EPRA NAREIT and FTSE All-share
Picton FTSE EPRA NAREIT UK FTSE All-Share
0
100
50
150
200
250
Key:
Mar
2022
Mar
2023
Mar
2024
Mar
2015
Mar
2016
Mar
2017
Mar
2018
Mar
2019
Mar
2020
Mar
2021
Mar
2025
Chief Executive Pay
The table below shows the remuneration of the Chief Executive for the past seven years, together with the annual bonus percentage
and LTIP vesting level. The Company has only had a Chief Executive since 1 October 2018 and therefore the table below shows his
remuneration for the past seven years.
Total
remuneration
(£000)
Annual bonus
(% of maximum)
LTIP vesting
(% of maximum
award)
2025 968 68% 45%
2024 882 54% 49%
2023 902 77% 52%
2022 816 64% 54%
2021 836 76% 67%
2020 769 70% 67%
2019 920 79% 83%
Relative importance of spend on pay
The table below shows the expenditure and percentage change in staff costs compared to other key financial indicators.
31 March 2025
£000
31 March 2024
£000 % change
Employee costs 4,444 4,191 6.0%
Dividends 20,159 19,089 5.6%
EPRA earnings 22,840 21,745 5.0%
Remuneration Report continued
Picton Property Income Limited
Annual Report 2025
128
Implementation of Remuneration Policy for the year ending 31 March 2026
Change from prior year
Executive Directors
Base salaries Michael Morris (Chief Executive) – £389,750
Saira Johnston (Chief Financial Officer) – £246,000
2.5% increase in the Executive Director
base salaries. The average increase for the
rest of the workforce is 3%.
Pension and
benefits
15% salary supplement in lieu of pension plus standard other benefits. No change.
Annual bonus
1
Maximum bonus of 145% of salary with at least 50% of any bonus deferred in
shares for two years.
60% of bonus to be determined by corporate financial metrics of absolute
total return and relative total property return with the remaining 40%
determined by corporate and personal measures.
No change. The maximum bonus
potential for the Executive Directors will
remain at 145%, with a policy upper limit
of 175%.
Comparator group for TR amended to an
absolute metric due to the shrinking peer
group and to align the timing of
calculation with the reporting date.
LTIP
1
Award of shares worth:
– Michael Morris (Chief Executive) 125% of salary
– Saira Johnston (Chief Financial Officer) 150% of salary
Vesting of shares based equally on relative TSR compared to the EPRA NAREIT
UK Index, relative TPR compared to the MSCI Index and growth in EPRA
earnings per share.
The vesting schedule for the relative TSR measure is to be determined and
approved by the Committee. The final vesting schedule will be disclosed in the
RNS relating to the LTIP award grant. The vesting schedule for the TPR
measure will be as applied to the June 2022 LTIP award as set out in page 126.
Targets for the EPS measure for the year ended 31 March 2028 are:
Less than 4.46 pence per share – 0%
Equal to 4.46 pence per share – 25%
Greater than 4.84 pence per share – 100%
A result between 4.46 pence and 4.84 pence will be calculated on a straight-
line basis between 25% and 100%.
For the CFO’s award, shares worth 40% of salary will be subject to the
performance conditions that applied to the June 2024 LTIP award, and shares
worth 110% of salary, will be subject to the performance conditions that apply
to all other June 2025 LTIP awards.
The rationale for award sizes are explained
in the Committee Chair’s statement.
Comparator group for the TSR metric to
be amended to EPRA NAREIT UK Index
due to the shrinking peer group size.
Non-Executive Directors
Fees Chair – £127,700
Director – £49,200
Supplementary fee for Committee Chairs and for the Senior Independent
Director – £8,200
The fees payable from 1 April 2025 have
increased by an average of 2.5%.
1. The Remuneration Committee has discretion to override the formulaic outcomes in both the annual bonus and LTIP.
The Committee also confirms that performance has been achieved within an acceptable risk profile before payouts are made.
Incentive payouts are subject to malus and clawback provisions.
Picton Property Income Limited
Annual Report 2025
129
Strategic
Report Governance
Financial
Statements
Additional
Information
Percentage change in remuneration
The table below shows the percentage change in total remuneration for each of the Directors compared to the average remuneration
of the employees of the Group.
Change from 31/3/24 to 31/3/25 Change from 31/3/23 to 31/3/24
Salary/fees Benefits Bonus Salary/fees Benefits Bonus
Michael Morris – 3.4% 26.6% 15.0% 15.0% (24.8)%
Saira Johnston – – – – – –
Andrew Dewhirst (100)% (100)% (100)% 15.0% 15.0% (24.8)%
Lena Wilson (23.5)% – – 4.5% – –
Francis Salway – – – – – –
Mark Batten 11.5% – – 4.8% – –
Maria Bentley (66.1)% – – 4.8% – –
Helen Beck – – – – – –
Richard Jones 1.8% – – 4.8% – –
Average of all other employees 6.6% 22.6% 8.6% 10.1% 12.5% (15.6)%
Change from 31/3/22 to 31/3/23 Change from 31/3/21 to 31/3/22 Change from 31/3/20 to 31/3/21
Salary/fees Benefits Bonus Salary/fees Benefits Bonus Salary/fees Benefits Bonus
Michael Morris 15.0% 16.0% 30.4% 15.0% 15.8% 9.4% 0.0% 0.6% 9.2%
Andrew Dewhirst 15.0% 16.4% 30.4% 15.0% 16.1% 9.4% 0.0% 0.8% 3.6%
Lena Wilson 0.0% – – 11.2% – – N/A N/A N/A
Mark Batten 0.0% – – 10.5% – – 0.0% – –
Maria Bentley 0.0% – – 16.7% – – 0.0% – –
Richard Jones 0.0% – – 16.7% – – N/A N/A N/A
Average of all other employees 8.8% 21.2% (5.9)% 6.4% 15.0% 13.2% 4.6% 8.1% 20.7%
Statement of voting at the last Annual General Meeting
The following table sets out the voting for the Remuneration Report and the Remuneration Policy, which were approved by
shareholders at the Annual General Meeting held on 30 July 2024. The votes cast in favour of the Remuneration Report represented
59.56% of the issued share capital of the Company and the votes cast for the Remuneration Policy represented 59.47% of the issued
share capital of the Company.
Remuneration Report Remuneration Policy
Votes cast % Votes cast %
For 326,147,412 99.29 325,633,104 98.61
Against 2,319,107 0.71 4,591,492 1.39
Votes cast 328,466,519 100.0 330,224,596 100.0
Withheld 1,773,745 15,668
Helen Beck
Chair of the Remuneration Committee
21 May 2025
Remuneration Report continued
Picton Property Income Limited
Annual Report 2025
130
Directors’ Report
The Directors of Picton Property Income
Limited present the Annual Report and
audited financial statements for the year
ended 31 March 2025.
The Company is registered under the
provisions of the Companies (Guernsey)
Law, 2008.
Principal activity
Results and dividends
The results for the year are set out
in the Consolidated Statement
of Comprehensive Income.
The Company is a UK Real Estate
Investment Trust (REIT) and must
distribute to its shareholders at least
90% of the profits on its property rental
business for each accounting period as
a Property Income Distribution (PID).
As set out in Note 10 to the consolidated
financial statements, the Company has
paid four interim dividends in the year
at 0.925 pence per share, making a total
dividend for the year ended 31 March 2025
of 3.7 pence per share (2024: 3.5 pence). All
four interim dividends were paid as PIDs.
Directors
The Directors of the Company who
served throughout the year are:
– Mark Batten
– Saira Johnston
– Richard Jones
– Michael Morris
Maria Bentley stepped down from the
Board at the end of the Annual General
Meeting in 2024 on 30 July 2024 and her
successor, Helen Beck, was appointed
to the Board on 1 August 2024. Lena
Wilson stepped down as a Director on
31 January 2025 and her successor, Francis
Salway, was appointed to the Board on
1 February 2025. Resolutions proposing
Francis’ and Helen’s election to the Board
will be put forward at the forthcoming
Annual General Meeting on 30 July 2025.
Mark Batten, Saira Johnston,
Richard Jones and Michael Morris
will offer themselves for re-election
at the Annual General Meeting.
The Directors’ interests in the shares of
the Company as at 31 March 2025 are
set out in the Remuneration Report.
2018 UK Corporate
Governance Code
Compliance Statement
The Board confirms that for the year
ended 31 March 2025 the principles of
good corporate governance contained
in the 2018 UK Corporate Governance
Code have been consistently applied.
The Company is fully compliant
with the Code.
Listing
The Company is listed on the main market
of the London Stock Exchange.
Share capital
The issued share capital of the Company
as at 31 March 2025 was 536,400,000
(2024: 547,605,596) ordinary shares of no
par value, including 2,942,959 ordinary
shares which are held by the Trustee
of the Company’s Employee Benefit
Trust (2024: 1,642,440 ordinary shares).
The Directors have authority to buy back
up to 14.99% of the Company’s ordinary
shares in issue, subject to the renewal
of this authority from shareholders at
each Annual General Meeting. Any
buyback of ordinary shares is, and will
be, made subject to Guernsey law, and
the making and timing of any buybacks
are at the absolute discretion of the
Board. A share buyback programme
was announced on 30 January 2025,
following which 11,205,596 ordinary
shares have been purchased under
this shareholder authority during the
year. This represents 2.05% of the share
capital issued as at the 31 March 2024.
At the 2024 Annual General Meeting,
shareholders gave the Directors authority
to issue up to 54,760,558 shares (being
10% of the Company’s issued share capital
as at 1 August 2023) without having
to first offer those shares to existing
shareholders. No ordinary shares have
been issued under this authority, which
expires at this year’s Annual General
Meeting. At the forthcoming Annual
General Meeting in July, resolutions will
be presented to increase this authority
in line with the 2022 Pre-Emption
Group’s Statement of Principles.
Shares held in the
Employee Benefit Trust
The Trustee of the Picton Property
Income Limited Long-term Incentive
Plan holds 2,942,959 ordinary shares in
the Company in a trust to satisfy awards
made under the Long-term Incentive
Plan and the Deferred Bonus Plan. The
Trustee has waived its right to receive
dividends on the shares it holds.
Statement of going concern
The Directors have focused on assessing
whether the going concern basis
remains appropriate for the preparation
of the financial statements for the
year ended 31 March 2025. In making
their assessment the Directors have
considered the principal and emerging
risks relating to the Group. They have
also considered a number of scenarios,
varying lease assumption and costs, over
varying timescales, to determine the
impact on financial performance, asset
values, capital expenditure and loan
covenants. Future lease events over the
assessment period have been considered
on a case-by-case basis to determine
the range of most likely outcomes. More
details regarding the Group’s business
activities, together with the factors
affecting performance, investment
activities and future development,
are set out in the Strategic Report.
Further information on the financial
position of the Group, including its
liquidity position, borrowing facilities
and debt maturity profile, is set out
in the Financial Review and in the
consolidated financial statements.
Under all of these scenarios the
Group has sufficient cash resources to
continue its operations, and remain
within its loan covenants, for a period
of at least 12 months from the date
of these financial statements.
Based on their assessment and
knowledge of the portfolio and market,
the Directors have therefore continued
to adopt the going concern basis in
preparing the financial statements.
Picton Property Income Limited
Annual Report 2025
131
Strategic
Report Governance
Financial
Statements
Additional
Information
Viability assessment
and statement
The UK Corporate Governance Code
requires the Board to make a ‘viability
statement’ which considers the
Company’s assessment of the future
prospects for the Company, in order that
the Board can state that the Company
will be able to continue its operations
over the period of their assessment.
The Board conducted this review over
a five-year timescale, considered to be
the most appropriate for long-term
investment in commercial property.
The assessment has been undertaken
taking into account the principal and
emerging risks and uncertainties
faced by the Group which could
impact its investment strategy, future
performance, financing and liquidity.
The major risks identified were those
relating to a persistently higher bond
yield environment and geopolitical
uncertainty as well as the inability to raise
capital, portfolio and investment risks.
In the ordinary course of business,
the Board reviews quarterly forecasts,
including forecast market returns. The
forecasts include assumptions on lease
events and expenditure. For the purposes
of the viability assessment of the Group,
the model covers a five-year period and
is stress tested under various scenarios.
The Board considered a number of
scenarios and their impact on the Group’s
property portfolio and financial position.
These scenarios included different levels
of rent collection, occupier defaults, void
periods and incentives within the portfolio,
and the consequential impact on property
costs and loan covenants. Forecast
movements in capital values were
based on input from external economic
consultants. The Group’s long-term loan
facilities mature after the assessment
period, and the Board has assumed that
the Group will continue to have access
to, but is not reliant on, its revolving
credit facility. The Board considered the
impact of these scenarios on its ability
to continue to pay dividends at different
rates over the assessment period.
These matters were assessed over
the period to 31 March 2030 and will
continue to be assessed over rolling
five-year periods.
The Directors consider that the scenario
testing performed was sufficiently
robust and that even under stressed
conditions the Company remains viable.
Based on their assessment, and in the
context of the Group’s business model
and strategy, the Directors expect that the
Group will be able to continue in operation
and meet its liabilities as they fall due over
the five-year period to 31 March 2030.
Substantial shareholdings
Based on notifications received and on
information provided by the Company’s
brokers, the Company understands the
following shareholders held a beneficial
interest of 3% or more of the Company’s
issued share capital as at 6 May 2025.
% of issued
share capital
Columbia Threadneedle
Investments 18.2
Rathbones Group plc 12.9
BlackRock Inc. 5.4
The Vanguard Group Inc. 4.8
Premier Miton Investors (UK) 4.2
Disclosure of information
to auditor
The Directors who held office at the
date of approval of this Directors’
Report confirm there is no relevant
audit information of which the
Company’s auditor is unaware and
each Director has taken all the steps
that he or she ought to have taken as
a Director to make themselves aware
of any relevant audit information
and to establish that the Company’s
auditor is aware of that information.
Auditor
KPMG Channel Islands Limited (the
‘Auditor’) has expressed its willingness
to continue in office as the Company’s
auditor and a resolution proposing
its reappointment will be submitted
at the Annual General Meeting.
Directors’ Report continued
Picton Property Income Limited
Annual Report 2025
132
Statement of Directors’
responsibilities
The Directors are responsible for
preparing the Annual Report and the
financial statements in accordance
with applicable law and regulations.
Company law requires the Directors
to prepare financial statements for
each financial year. Under that law
they are required to prepare the
financial statements in accordance
with International Financial
Reporting Standards, as issued by
the IASB, and applicable law.
Under company law the Directors
must not approve the financial
statements unless they are satisfied
that they give a true and fair view of
the state of affairs of the Company and
of its profit or loss for that period.
In preparing these financial statements,
the Directors are required to:
– Select suitable accounting policies
and then apply them consistently;
– Make judgements and estimates that
are reasonable, relevant and reliable;
– State whether applicable accounting
standards have been followed, subject
to any material departures disclosed
and explained in the financial
statements;
– Assess the Group and Company’s
ability to continue as a going concern,
disclosing, as applicable, matters related
to going concern; and
– Use the going concern basis of
accounting unless they either intend to
liquidate the Group or the Company or
to cease operations, or have no realistic
alternative but to do so.
The Directors are responsible for
keeping proper accounting records that
are sufficient to show and explain the
Company’s transactions and disclose
with reasonable accuracy at any time
the financial position of the Company
and enable them to ensure that its
financial statements comply with the
Companies (Guernsey) Law, 2008. They
are responsible for such internal controls
as they determine are necessary to
enable the preparation of the financial
statements that are free from material
misstatement, whether due to fraud or
error, and have a general responsibility
for taking such steps as are reasonably
open to them to safeguard the assets
of the Group and to prevent and
detect fraud and other irregularities.
The Directors are responsible for the
maintenance and integrity of the
corporate and financial information
included on the Company’s website, and
for the preparation and dissemination
of financial statements. Legislation in
Guernsey governing the preparation and
dissemination of financial statements may
differ from legislation in other jurisdictions.
Directors’ responsibility
statement in respect of
the Annual Report and
financial statements
We confirm that to the best of our
knowledge:
– The financial statements, prepared in
accordance with the applicable set of
accounting standards, give a true and
fair view of the assets, liabilities, financial
position and profit or loss of the
Company; and
– The Strategic Report includes a fair
review of the development and
performance of the business and the
position of the Issuer, together with a
description of the principal risks and
uncertainties that they face.
We consider the Annual Report and
Accounts, taken as a whole, are fair,
balanced and understandable and
provide the information necessary
for shareholders to assess the
Company’s position and performance,
business model and strategy.
By Order of the Board
21 May 2025
Picton Property Income Limited
Annual Report 2025
133
Strategic
Report Governance
Financial
Statements
Additional
Information
Independent Auditor’s Report to the
Members of Picton Property Income Limited
Our opinion is unmodified
We have audited the consolidated
financial statements of Picton Property
Income Limited (the ‘Company’) and its
subsidiaries (together, the ‘Group’), which
comprise the consolidated balance sheet
as at 31 March 2025, the consolidated
statements of comprehensive income,
changes in equity and cash flows
for the year then ended, and notes,
comprising material accounting policies
and other explanatory information.
In our opinion, the
accompanying consolidated
financial statements:
– give a true and fair view of the financial
position of the Group as at 31 March
2025, and of the Group’s financial
performance and cash flows for the year
then ended;
Basis for opinion
We conducted our audit in accordance
with International Standards on Auditing
(UK) (ISAs (UK)) and applicable law. Our
responsibilities are described below. We
have fulfilled our ethical responsibilities
under, and are independent of the
Company and Group in accordance
with, UK ethical requirements including
the FRC Ethical Standard as required by
the Crown Dependencies’ Audit Rules
and Guidance. We believe that the audit
evidence we have obtained is a sufficient
and appropriate basis for our opinion.
Valuation of Investment Properties
within non-current assets The risk Our response
£701 million
(2024: £688 million)
Refer to page 111 of the Audit
and Risk Committee Report,
Note 2 material accounting
policies and Note 13
investment properties
disclosures.
Basis:
The Group’s investment properties
accounted for 92% (2024: 89%) of the
Group’s total assets as at 31 March 2025.
The fair value of investment properties at
31 March 2025 was assessed by the Board
of Directors based on independent
valuations prepared by the Group’s
third-party independent valuer (the
‘Valuer’). The Valuer performed the
valuations based on the Royal Institution of
Chartered Surveyors (RICS) Valuation –
Global Standards and the requirements of
IFRS. In determining the valuation of a
property, the Valuer takes into account
property specific information such as the
current tenancy agreements and rental
income and apply assumptions for yields
and estimated market rent, which are
influenced by prevailing market yields and
comparable market transactions, to arrive
at the final valuation.
Risk:
The valuation of the Group’s investment
properties is considered a significant area
of our audit in view of the significance of
the estimates and judgements that may
be involved in the determination of their
fair value and given that it represents the
majority of the total assets of the Group.
The valuation is inherently subjective due
to property specific factors which include,
but are not limited to, the individual
nature of the property, the location and
condition of the property and the
expected future rental streams for that
particular property.
Our audit procedures included:
Control Evaluation:
We assessed the design, implementation and operating
effectiveness of controls over the valuation of investment
properties including the capture and recording of
information contained in the lease database for investment
properties.
Evaluating experts engaged by management:
We assessed the competence, capabilities and objectivity
of the Valuer. We also assessed the independence of the
Valuer by considering the scope of their work and the terms
of their engagement.
Evaluating assumptions and inputs used
in the valuation:
With the assistance of our own Real Estate valuation
specialist we challenged the valuations prepared by the
Valuer by:
– Critically evaluating the appropriateness of the valuation
methodologies and assumptions used; and
– Critically evaluating key subjective valuation inputs and
assumptions, on a judgemental sample of properties,
against market information such as industry benchmarks
and our own knowledge and understanding of the
property market.
We also compared a sample of the key inputs used to
calculate the valuations such as annual rent and tenancy
contracts for consistency with other audit findings.
We verified that the fair values as derived by the Valuer for
the entire property portfolio were correctly included in the
financial statements.
Assessing disclosures:
We also challenged the Group’s investment property
valuation policies and their application as described in
the notes to the consolidated financial statements for
compliance with IFRS in addition to the adequacy of
disclosures in Note 13 in relation to fair value of the
investment properties.
Key audit matters: our
assessment of the risks of
material misstatement
Key audit matters are those matters that,
in our professional judgement, were
of most significance in the audit of the
consolidated financial statements and
include the most significant assessed risks
of material misstatement (whether or not
due to fraud) identified by us, including
those which had the greatest effect on:
the overall audit strategy; the allocation
of resources in the audit; and directing
the efforts of the engagement team.
These matters were addressed in the
context of our audit of the consolidated
financial statements as a whole, and in
forming our opinion thereon, and we
do not provide a separate opinion on
these matters. In arriving at our audit
opinion above, the key audit matter was
as follows (unchanged from 2024):
Picton Property Income Limited
Annual Report 2025
134
Our application of materiality
and an overview of the scope of
our audit
Materiality for the consolidated financial
statements as a whole was set at £7.56
million, determined with reference to
a benchmark of group total assets of
£764.6 million, of which it represents
approximately 1.0% (2024: 1.0%).
In line with our audit methodology,
our procedures on individual account
balances and disclosures were performed
to a lower threshold, performance
materiality, so as to reduce to an
acceptable level the risk that individually
immaterial misstatements in individual
account balances add up to a material
amount across the consolidated financial
statements as a whole. Performance
materiality for the Group was set at
75% (2024: 75%) of materiality for the
consolidated financial statements as a
whole, which equates to £5.7 million.
We applied this percentage in our
determination of performance materiality
because we did not identify any factors
indicating an elevated level of risk.
We reported to the Audit Committee
any corrected or uncorrected identified
misstatements exceeding £378,000,
in addition to other identified
misstatements that warranted
reporting on qualitative grounds.
Our audit of the Group was undertaken
to the materiality level specified
above, which has informed our
identification of significant risks
of material misstatement and the
associated audit procedures performed
in those areas as detailed above.
The group team performed the audit of
the Group as if it was a single aggregated
set of financial information. The audit was
performed using the materiality level
set out above and covered 100% of total
group revenue, total group profit before
tax, and total group assets and liabilities.
Going concern
The Directors have prepared the
consolidated financial statements on the
going concern basis as they do not intend
to liquidate the Group or the Company
or to cease their operations, and as they
have concluded that the Group and the
Company’s financial position means that
this is realistic. They have also concluded
that there are no material uncertainties
that could have cast significant doubt
over their ability to continue as a going
concern for at least a year from the date
of approval of the consolidated financial
statements (the ‘going concern period’).
In our evaluation of the Directors’
conclusions, we considered the inherent
risks to the Group and the Company’s
business model and analysed how
those risks might affect the Group
and the Company’s financial resources
or ability to continue operations over
the going concern period. The risks
that we considered most likely to
affect the Group and the Company’s
financial resources or ability to continue
operations over this period were:
– Availability of capital to meet operating
costs and other financial commitments;
– The ability to successfully refinance or
repay debt; and
– The ability of the Company to comply
with debt covenants;
We considered whether these risks could
plausibly affect the liquidity in the going
concern period by comparing severe,
but plausible downside scenarios that
could arise from these risks individually
and collectively against the level of
available financial resources indicated
by the Company’s financial forecasts.
We considered whether the going
concern disclosure in Note 2 to the
financial statements gives a full and
accurate description of the Directors’
assessment of going concern.
Our conclusions based on this work:
– we consider that the Directors’ use of
the going concern basis of accounting
in the preparation of the consolidated
financial statements is appropriate;
– we have not identified, and concur with
the Directors’ assessment that there is
not, a material uncertainty related to
events or conditions that, individually or
collectively, may cast significant doubt
on the Group and the Company’s ability
to continue as a going concern for the
going concern period; and
– we have nothing material to add or draw
attention to in relation to the Directors’
statement in the notes to the
consolidated financial statements on
the use of the going concern basis of
accounting with no material
uncertainties that may cast significant
doubt over the Group and the
Company’s use of that basis for the
going concern period, and that
statement is materially consistent with
the consolidated financial statements
and our audit knowledge.
However, as we cannot predict all future
events or conditions and as subsequent
events may result in outcomes that
are inconsistent with judgements that
were reasonable at the time they were
made, the above conclusions are not
a guarantee that the Group and the
Company will continue in operation.
Fraud and breaches of laws and
regulations – ability to detect
Identifying and responding to risks of
material misstatement due to fraud
To identify risks of material misstatement
due to fraud (fraud risks) we assessed
events or conditions that could indicate an
incentive or pressure to commit fraud or
provide an opportunity to commit fraud.
Our risk assessment procedures included:
– enquiring of management as to the
Group’s policies and procedures to
prevent and detect fraud as well as
enquiring whether management have
knowledge of any actual, suspected or
alleged fraud;
– reading minutes of meetings of those
charged with governance; and
– using analytical procedures to identify
any unusual or unexpected
relationships.
Picton Property Income Limited
Annual Report 2025
135
Strategic
Report Governance
Financial
Statements
Additional
Information
Independent Auditor’s Report to the Members of Picton Property Income Limited
continued
As required by auditing standards, we
perform procedures to address the risk
of management override of controls, in
particular the risk that management may
be in a position to make inappropriate
accounting entries. On this audit we do
not believe there is a fraud risk related
to revenue recognition because the
Group’s revenue streams are simple
in nature with respect to accounting
policy choice, and are easily verifiable
to external data sources or agreements
with little or no requirement for
estimation from management. We did
not identify any additional fraud risks.
We performed procedures including:
– identifying journal entries and other
adjustments to test based on risk
criteria and comparing any identified
entries to supporting documentation;
and
– incorporating an element of
unpredictability in our audit procedures.
Identifying and responding to risks of
material misstatement due to non-
compliance with laws and regulations
We identified areas of laws and regulations
that could reasonably be expected to
have a material effect on the consolidated
financial statements from our sector
experience and through discussion
with management (as required by
auditing standards), and from inspection
of the Group’s regulatory and legal
correspondence, if any, and discussed with
management the policies and procedures
regarding compliance with laws and
regulations. As the Group is regulated, our
assessment of risks involved gaining an
understanding of the control environment
including the entity’s procedures for
complying with regulatory requirements.
The Group is subject to laws and
regulations that directly affect the
consolidated financial statements
including financial reporting legislation
and taxation legislation and we assessed
the extent of compliance with these laws
and regulations as part of our procedures
on the related financial statement items.
The Group is subject to other laws and
regulations where the consequences of
non-compliance could have a material
effect on amounts or disclosures in the
consolidated financial statements, for
instance through the imposition of fines
or litigation or impacts on the Group and
the Company’s ability to operate. We
identified financial services regulation as
being the area most likely to have such an
effect, recognising the regulated nature
of the Group’s activities and its legal form.
Auditing standards limit the required audit
procedures to identify non-compliance
with these laws and regulations to
enquiry of management and inspection
of regulatory and legal correspondence,
if any. Therefore if a breach of operational
regulations is not disclosed to us or
evident from relevant correspondence,
an audit will not detect that breach.
Context of the ability of the audit
to detect fraud or breaches of law
or regulation
Owing to the inherent limitations of an
audit, there is an unavoidable risk that we
may not have detected some material
misstatements in the consolidated
financial statements, even though we
have properly planned and performed
our audit in accordance with auditing
standards. For example, the further
removed non-compliance with laws
and regulations is from the events and
transactions reflected in the consolidated
financial statements, the less likely the
inherently limited procedures required
by auditing standards would identify it.
In addition, as with any audit, there
remains a higher risk of non-detection of
fraud, as this may involve collusion, forgery,
intentional omissions, misrepresentations,
or the override of internal controls.
Our audit procedures are designed to
detect material misstatement. We are
not responsible for preventing non-
compliance or fraud and cannot be
expected to detect non-compliance
with all laws and regulations.
Other information
The Directors are responsible for the
other information. The other information
comprises the information included in
the annual report but does not include
the consolidated financial statements and
our auditor’s report thereon. Our opinion
on the consolidated financial statements
does not cover the other information and
we do not express an audit opinion or any
form of assurance conclusion thereon.
In connection with our audit of the
consolidated financial statements,
our responsibility is to read the other
information and, in doing so, consider
whether the other information is materially
inconsistent with the consolidated
financial statements or our knowledge
obtained in the audit, or otherwise
appears to be materially misstated. If,
based on the work we have performed,
we conclude that there is a material
misstatement of this other information,
we are required to report that fact. We
have nothing to report in this regard.
Disclosures of emerging
and principal risks and
longer term viability
We are required to perform procedures
to identify whether there is a material
inconsistency between the Directors’
disclosures in respect of emerging
and principal risks and the viability
statement, and the consolidated financial
statements and our audit knowledge
we have nothing material to add or
draw attention to in relation to:
– the Directors’ confirmation within the
Viability assessment and statement
(page 132) that they have carried out a
robust assessment of the emerging and
principal risks facing the Group,
including those that would threaten its
business model, future performance,
solvency or liquidity;
– the emerging and principal risks
disclosures describing these risks and
explaining how they are being managed
or mitigated;
Picton Property Income Limited
Annual Report 2025
136
– the Directors’ explanation in the Viability
assessment and statement (page 132) as
to how they have assessed the
prospects of the Group, over what
period they have done so and why they
consider that period to be appropriate,
and their statement as to whether they
have a reasonable expectation that the
Group will be able to continue in
operation and meet its liabilities as they
fall due over the period of their
assessment, including any related
disclosures drawing attention to any
necessary qualifications or assumptions.
We are also required to review the Viability
assessment and statement, set out on
page 132 under the Listing Rules. Based on
the above procedures, we have concluded
that the above disclosures are materially
consistent with the consolidated financial
statements and our audit knowledge.
Corporate governance
disclosures
We are required to perform procedures
to identify whether there is a material
inconsistency between the Directors’
corporate governance disclosures and
the consolidated financial statements
and our audit knowledge.
Based on those procedures, we have
concluded that each of the following
is materially consistent with the
consolidated financial statements
and our audit knowledge:
– the Directors’ statement that they
consider that the annual report and
consolidated financial statements taken
as a whole is fair, balanced and
understandable, and provides the
information necessary for shareholders
to assess the Company’s position and
performance, business model and
strategy;
– the section of the annual report
describing the work of the Audit
Committee, including the significant
issues that the audit committee
considered in relation to the financial
statements, and how these issues were
addressed; and
– the section of the annual report that
describes the review of the effectiveness
of the Company’s risk management and
internal control systems.
We are required to review the part
of Corporate Governance Statement
relating to the Company’s compliance
with the provisions of the UK Corporate
Governance Code specified by the
Listing Rules for our review. We have
nothing to report in this respect.
We have nothing to report on
other matters on which we are
required to report by exception
We have nothing to report in respect
of the following matters where the
Companies (Guernsey) Law, 2008 requires
us to report to you if, in our opinion:
– the Company has not kept proper
accounting records; or
– the consolidated financial statements
are not in agreement with the
accounting records; or
– we have not received all the information
and explanations, which to the best of
our knowledge and belief are necessary
for the purpose of our audit.
Respective responsibilities
Directors’ responsibilities
As explained more fully in their statement
set out on page 133, the Directors are
responsible for: the preparation of the
consolidated financial statements
including being satisfied that they give
a true and fair view; such internal control
as they determine is necessary to enable
the preparation of consolidated financial
statements that are free from material
misstatement, whether due to fraud or
error; assessing the Group and Company’s
ability to continue as a going concern,
disclosing, as applicable, matters related
to going concern; and using the going
concern basis of accounting unless they
either intend to liquidate the Group or
the Company or to cease operations, or
have no realistic alternative but to do so.
Auditor’s responsibilities
Our objectives are to obtain reasonable
assurance about whether the consolidated
financial statements as a whole are free
from material misstatement, whether
due to fraud or error, and to issue our
opinion in an auditor’s report. Reasonable
assurance is a high level of assurance,
but does not guarantee that an audit
conducted in accordance with ISAs (UK)
will always detect a material misstatement
when it exists. Misstatements can arise
from fraud or error and are considered
material if, individually or in aggregate,
they could reasonably be expected
to influence the economic decisions
of users taken on the basis of the
consolidated financial statements.
A fuller description of our responsibilities
is provided on the FRC’s website at
www.frc.org.uk/auditorsresponsibilities.
The purpose of this report
and restrictions on its use
by persons other than the
Company’s members as a body
This report is made solely to the
Company’s members, as a body, in
accordance with section 262 of the
Companies (Guernsey) Law, 2008. Our
audit work has been undertaken so
that we might state to the Company’s
members those matters we are required
to state to them in an auditor’s report
and for no other purpose. To the fullest
extent permitted by law, we do not
accept or assume responsibility to
anyone other than the Company and
the Company’s members, as a body,
for our audit work, for this report, or
for the opinions we have formed.
Steven Stormonth
For and on behalf of KPMG Channel
Chartered Accountants and Recognised
Auditors
Guernsey
21 May 2025
Picton Property Income Limited
Annual Report 2025
137
Strategic
Report Governance
Financial
Statements
Additional
Information
Consolidated Statement of Comprehensive Income
for the year ended 31 March 2025
Notes
| 2025 | 2024 | ||
| £000 | £000 | ||
| Income | |||
Revenue from properties | 3 | ||
Property expenses | 4 | ( | ( |
Net property income | |||
| Expenses | |||
Administrative expenses | 6 | ( | ( |
Total operating expenses | ( | ( | |
Operating profit before movement on investments | |||
| Investments | |||
Revaluation of owner-occupied property | 14 | ||
Investment property valuation movements | 13 | ( | |
Profit on disposal of investment property | 13 | ||
Total profit/(loss) on investments | ( | ||
Operating profit | |||
| Financing | |||
Interest income | 8 | ||
Interest expense | 8 | ( | ( |
Total finance costs | ( | ( | |
Profit/(loss) before tax | ( | ||
Tax | 9 | ||
Profit/(loss) after tax | ( | ||
Total comprehensive income/(loss) for the year | ( | ||
| Earnings per share | |||
Basic | 11 | ( | |
Diluted | 11 | ( |
All items in the above statement derive from continuing operations.
All of the profit and total comprehensive income for the year is attributable to the equity holders of the Company.
Notes 1 to 27 form part of these consolidated financial statements.
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Consolidated Statement of Changes in Equity
for the year ended 31 March 2025
Notes
| Share | Retained | Other | |||
| capital | earnings | reserves | Total | ||
| £000 | £000 | £000 | £000 | ||
Balance as at 31 March 2023 | ( | ||||
Loss for the year | ( | ( | |||
Dividends paid | 10 | ( | ( | ||
Share-based awards | |||||
Balance as at 31 March 2024 | ( | ||||
Profit for the year | |||||
Dividends paid | 10 | ( | ( | ||
Share-based awards | |||||
Purchase of shares held in trust | 7 | ( | ( | ||
Purchase and cancellation of own shares | 20 | ( | ( | ||
Balance as at | ( |
Notes 1 to 27 form part of these consolidated financial statements.
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Statements
Additional
Information
Consolidated Balance Sheet
as at 31 March 2025
Notes
| 2025 | 2024 | ||
| £000 | £000 | ||
| Non-current assets | |||
Investment properties | 13 | ||
Property, plant and equipment | 14 | ||
Total non-current assets | |||
| Current assets | |||
Investment properties held for sale | 13 | ||
Accounts receivable | 15 | ||
Cash and cash equivalents | 16 | ||
Total current assets | |||
Total assets | |||
| Current liabilities | |||
Accounts payable and accruals | 17 | ( | ( |
Loans and borrowings | 18 | ( | ( |
Obligations under leases | 22 | ( | ( |
Total current liabilities | ( | ( | |
| Non-current liabilities | |||
Loans and borrowings | 18 | ( | ( |
Obligations under leases | 22 | ( | ( |
Total non-current liabilities | ( | ( | |
Total liabilities | ( | ( | |
Net assets | |||
| Equity | |||
Share capital | 20 | ||
Retained earnings | |||
Other reserves | ( | ( | |
Total equity | |||
Net asset value per share | 23 |
Notes 1 to 27 form part of these consolidated financial statements.
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140
Consolidated Statement of Cash Flows
for the year ended 31 March 2025
Notes
| 2025 | 2024 | ||
| £000 | £000 | ||
| Operating activities | |||
Operating profit | |||
Adjustments for non-cash items | 21 | ( | |
Interest received | |||
Interest paid | ( | ( | |
Decrease/(increase) in accounts receivable | ( | ||
(Decrease)/increase in accounts payable and accruals | ( | ||
Cash inflows from operating activities | |||
| Investing activities | |||
Purchase of investment properties | 13 | ( | |
Disposal of investment properties | 13 | ||
Capital expenditure on investment properties | 13 | ( | ( |
Purchase of property, plant and equipment | 14 | ( | ( |
Cash inflows/(outflows) from investing activities | ( | ||
| Financing activities | |||
Borrowings repaid | 18 | ( | ( |
Borrowings drawn | 18 | ||
Purchase of shares held in trust | 7 | ( | |
Purchase and cancellation of own shares | 20 | ( | |
Dividends paid | 10 | ( | ( |
Cash outflows from financing activities | ( | ( | |
Net increase/(decrease) in cash and cash equivalents | ( | ||
Cash and cash equivalents at beginning of year | |||
Cash and cash equivalents at end of year | 16 |
Notes 1 to 27 form part of these consolidated financial statements.
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Strategic
Report Governance
Financial
Statements
Additional
Information
Notes to the Consolidated Financial Statements
for the year ended 31 March 2025
1. General information
15 September 2005. It has a listing on the main market of the London Stock Exchange as a commercial company and entered the
UK REIT regime on 1 October 2018. The consolidated financial statements are prepared for the year ended 31 March 2025 with
comparatives for the year ended 31 March 2024.
Picton Property Income Limited
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142
2. Material accounting policies continued
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Statements
Additional
Information
2. Material accounting policies continued
Notes to the Consolidated Financial Statements cont inued
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2. Material accounting policies continued
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Strategic
Report Governance
Financial
Statements
Additional
Information
| 2025 | 2024 | |
| £000 | £000 | |
Rents receivable (adjusted for lease incentives) | 43,531 | 43,910 |
Surrender premiums | 7 | 102 |
Dilapidation receipts | 368 | 952 |
Other income | 286 | 124 |
44,192 | 45,088 | |
Service charge income | 9,827 | 9,602 |
54,019 | 54,690 |
4. Property expenses
| 2025 | 2024 | |
| £000 | £000 | |
Property operating costs | 2,629 | 3,075 |
Property void costs | 3,887 | 4,122 |
6,516 | 7,197 | |
Recoverable service charge costs | 9,827 | 9,602 |
16,343 | 16,799 |
5. Operating segments
The Board is responsible for setting the Group’s strategy and business model. The key measure of performance used by the Board to
assess the Group’s performance is the total return on the Group’s net asset value. As the total return on the Group’s net asset value is
calculated based on the net asset value per share calculated under IFRS as shown at the foot of the Consolidated Balance Sheet,
assuming dividends are reinvested, the key performance measure is that prepared under IFRS. Therefore, no reconciliation is required
between the measure of profit or loss used by the Board and that contained in the financial statements.
The Board has considered the requirements of IFRS 8 ‘Operating Segments’. The Board is of the opinion that the Group, through
its subsidiary undertakings, operates in one reportable industry segment, namely real estate investment, and across one primary
geographical area, namely the United Kingdom, and therefore no segmental reporting is required. The portfolio consists of 47
commercial properties, which are in the industrial, office, retail and leisure sectors.
| 2025 | 2024 | |
| £000 | £000 | |
Director and staff costs | 4,444 | 4,191 |
Auditor’s remuneration | 256 | 248 |
Other administrative expenses | 2,400 | 2,780 |
7,100 | 7,219 |
| 2025 | 2024 | |
| Auditor’s remuneration comprises: | £000 | £000 |
| Audit fees: | ||
Audit of Group financial statements | 138 | 120 |
Audit of subsidiaries’ financial statements | 80 | 103 |
| Audit-related fees: | ||
Review of interim financial statements | 38 | 25 |
256 | 248 |
Notes to the Consolidated Financial Statements cont inued
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146
7. Director and staff costs
| 2025 | 2024 | |
| £000 | £000 | |
Wages and salaries | 2,436 | 2,422 |
Non-Executive Directors’ fees | 298 | 287 |
Social security costs | 526 | 435 |
Other pension costs | 51 | 47 |
Share-based payments – cash settled | 311 | 189 |
Share-based payments – equity settled | 822 | 811 |
4,444 | 4,191 |
| Units at | Units | Units | Units | Units at | Units | Units | Units | Units at | |
| 31 March | granted | cancelled | redeemed | 31 March | granted | cancelled | redeemed | 31 March | |
| Vesting date | 2023 | in the year | in the year | in the year 2024 | in the year | in the year | in the year 2025 | ||
29 June 2022 | 9,755 | – | – | (9,755) | – | – | – | – | – |
22 June 2023 | 531,108 | – | – | (391,152) | 139,956 | – | – | (139,956) | – |
17 June 2024 | 500,905 | – | (2,117) | – | 498,788 | – | – | (498,788) | – |
14 June 2025 | – | 834,885 | (2,305) | – | 832,580 | – | – | – | 832,580 |
6 June 2026 | – | – | – | – | – | 1,063,607 | – | – | 1,063,607 |
1,041,768 | 834,885 | (4,422) | (400,907) | 1,471,324 | 1,063,607 | – | (638,744) | 1,896,187 | |
| Assumptions | ||
Grant date | 6 June 2024 | 14 June 2023 |
Share price at date of grant | 67.4p | 76.2p |
Exercise price | Nil | Nil |
Expected term | 3 years | 3 years |
Risk-free rate – TSR condition | 4.3% | 4.8% |
Share price volatility – TSR condition | 26.7% | 27.4% |
Median volatility of comparator group – TSR condition | 29.2% | 27.2% |
Correlation – TSR condition | 50.2% | 38.6% |
TSR performance at grant date – TSR condition | 7.0% | 7.0% |
Median TSR performance of comparator group at grant date – TSR condition | 4.4% | 2.3% |
Fair value – TSR condition (Monte Carlo method) | 29.0p | 35.0p |
Fair value – TPR condition (Black-Scholes model) | 67.4p | 76.2p |
Fair value – EPS condition (Black-Scholes model) | 67.4p | 76.2p |
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Financial
Statements
Additional
Information
| 2025 | 2024 | |
| Interest paid | £000 | £000 |
Interest payable on loans | 8,081 | 9,146 |
Interest on obligations under finance leases | 173 | 174 |
Non-utilisation fees | 295 | 211 |
8,549 | 9,531 |
9. Tax
The charge for the year is:
| 2025 | 2024 | |
| £000 | £000 | |
Tax expense in year | – | – |
Total tax charge | – | – |
A reconciliation of the tax charge applicable to the results at the statutory tax rate to the charge for the year is as follows:
| 2025 | 2024 | |
| £000 | £000 | |
Profit/(loss) before taxation | 37,323 | (4,789) |
Expected tax charge/(credit) on ordinary activities at the standard rate of taxation of 25% (2024: 25%) | 9,331 | (1,197) |
| Less: | ||
UK REIT exemption on net income | (5,710) | (5,437) |
Revaluation movement not taxable | (3,621) | 6,634 |
Total tax charge | – | – |
As a UK REIT, the income profits of the Group’s UK property rental business are exempt from corporation tax, as are any gains it makes
from the disposal of its properties, provided they are not held for trading. The Group is otherwise subject to UK corporation tax at the
prevailing rate.
As the principal company of the REIT, the Company is required to distribute at least 90% of the income profits of the Group’s UK
property rental business. There are a number of other conditions that are also required to be met by the Company and the Group to
maintain REIT tax status. These conditions were met in the year and the Board intends to conduct the Group’s affairs such that these
conditions continue to be met for the foreseeable future. Accordingly, deferred tax is no longer recognised on temporary differences
relating to the property rental business.
7. Director and staff costs continued
Notes to the Consolidated Financial Statements cont inued
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148
10. Dividends
| 2025 | 2024 | |
| £000 | £000 | |
| Declared and paid: | ||
Interim dividend for the period ended 31 March 2023: 0.875 pence | – | 4,771 |
Interim dividend for the period ended 30 June 2023: 0.875 pence | – | 4,770 |
Interim dividend for the period ended 30 September 2023: 0.875 pence | – | 4,771 |
Interim dividend for the period ended 31 December 2023: 0.875 pence | – | 4,777 |
Interim dividend for the period ended 31 March 2024: 0.925 pence | 5,050 | – |
Interim dividend for the period ended 30 June 2024: 0.925 pence | 5,039 | – |
Interim dividend for the period ended 30 September 2024: 0.925 pence | 5,038 | – |
Interim dividend for the period ended 31 December 2024: 0.925 pence | 5,032 | – |
20,159 | 19,089 |
The interim dividend of 0.95 pence per ordinary share in respect of the period ended 31 March 2025 has not been recognised
as a liability as it was declared after the year end. This dividend of £5,019,000 will be paid on 30 May 2025.
11. Earnings per share
Basic and diluted earnings per share is calculated by dividing the net profit for the year attributable to ordinary shareholders of the
Company by the weighted average number of ordinary shares in issue during the year, excluding the average number of shares held
by the Employee Benefit Trust for the year. The diluted number of shares also reflects the contingent shares to be issued under the
Long-term Incentive Plan.
The following reflects the profit and share data used in the basic and diluted profit per share calculation:
2025 | 2024 | |
Net profit/(loss) attributable to ordinary shareholders of the Company from continuing operations (£000) | 37, 323 | (4,789) |
Weighted average number of ordinary shares for basic earnings per share | 544,037,179 | 545,437,264 |
Weighted average number of ordinary shares for diluted earnings per share | 545,502,180 | 547,092,154 |
Name | Place of incorporation | Ownership proportion |
Picton UK Real Estate Trust (Property) Limited | Guernsey | 100% |
Picton (UK) REIT (SPV) Limited | Guernsey | 100% |
Picton (UK) Listed Real Estate | Guernsey | 100% |
Picton UK Real Estate (Property) No 2 Limited | Guernsey | 100% |
Picton (UK) REIT (SPV No 2) Limited | Guernsey | 100% |
Picton Capital Limited | England & Wales | 100% |
Picton (General Partner) No 2 Limited | Guernsey | 100% |
Picton (General Partner) No 3 Limited | Guernsey | 100% |
Picton No 2 Limited Partnership | England & Wales | 100% |
Picton No 3 Limited Partnership | England & Wales | 100% |
Picton Financing UK Limited | England & Wales | 100% |
Picton Financing UK (No 2) Limited | England & Wales | 100% |
Picton Property No 3 Limited | Guernsey | 100% |
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Financial
Statements
Additional
Information
13. Investment properties
The following table provides a reconciliation of the opening and closing amounts of investment properties classified as Level 3
recorded at fair value.
| 2025 | 2024 | |
| £000 | £000 | |
Fair value at start of year | 724,043 | 746,342 |
Capital expenditure on investment properties | 11,794 | 4,458 |
Acquisitions | 533 | – |
Disposals | (50,031) | – |
Profit on disposal of investment properties | 1,496 | – |
Unrealised movement on investment properties | 12,859 | (26,757) |
Fair value at the end of the year | 700,694 | 724,043 |
Historic cost at the end of the year | 647,863 | 685,576 |
The fair value of investment properties reconciles to the appraised value as follows:
| 2025 | 2024 | |
| £000 | £000 | |
| Current | ||
Appraised value of properties held for sale | – | 35,900 |
Lease incentives held as debtors of properties held for sale | – | (167) |
– | 35,733 | |
| Non-current | ||
Appraised value | 723,145 | 708,740 |
Valuation of assets held under head leases | 2,074 | 2,046 |
Owner-occupied property | (3,438) | (3,391) |
Lease incentives held as debtors | (21,087) | (19,085) |
700,694 | 688,310 | |
Fair value at the end of the year | 700,694 | 724,043 |
As at 31 March 2024, contracts had been exchanged to sell Angel Gate, London EC1 and Longcross, Cardiff so these assets were
classified as assets held for sale, net of lease incentives. The sale of Angel Gate completed in April 2024 and the sale of Longcross
completed in March 2025. As at 31 March 2025, there were no assets classified as held for sale.
The investment properties were valued by independent valuers, CBRE Limited, Chartered Surveyors, as at 31 March 2025 and 31 March
2024 on the basis of fair value in accordance with the version of the RICS Valuation – Global Standards (incorporating the International
Valuation Standards) and the UK national supplement (the Red Book) current as at the valuation date. The total fees earned by CBRE
Limited from the Group are less than 5% of their total UK revenue.
The fair value of the Group’s investment properties has been determined using an income capitalisation technique, whereby
contracted and market rental values are capitalised with a market capitalisation rate. The resulting valuations are cross-checked
against the equivalent yields and the fair market values per square foot derived from comparable market transactions on an arm’s
length basis.
In addition, the Group’s investment properties are valued quarterly by CBRE Limited. The valuations are based on:
– Information provided by the Group, including rents, lease terms, revenue and capital expenditure. Such information is derived from
the Group’s financial and property systems and is subject to the Group’s overall control environment
– Valuation models used by the valuers, including market-related assumptions based on their professional judgement and market
observation
The assumptions and valuation models used by the valuers, and supporting information, are reviewed by senior management and the
Board through the Property Valuation Committee. Members of the Property Valuation Committee, together with senior
management, meet with the independent valuer on a quarterly basis to review the valuations and underlying assumptions, including
considering current market trends and conditions, and changes from previous quarters. The Board will also consider whether
circumstances at specific investment properties, such as alternative uses and issues with occupational tenants, are appropriately
reflected in the valuations. The fair value of investment properties is measured based on each property’s highest and best use from a
market participant’s perspective and considers the potential uses of the property that are physically possible, legally permissible and
financially feasible.
Notes to the Consolidated Financial Statements cont inued
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150
As at 31 March 2025 and 31 March 2024, all of the Group’s properties, including owner-occupied property, are Level 3 in the fair value
hierarchy as it involves use of significant judgement. There were no transfers between levels during the year and the prior year. Level 3
inputs used in valuing the properties are those which are unobservable, as opposed to Level 1 (inputs from quoted prices) and Level 2
(observable inputs either directly, i.e. as prices, or indirectly, as derived from prices).
Information on these significant unobservable inputs per sector of investment properties is disclosed as follows:
2025 | 2024 | |||||
| Retail and | Retail and | |||||
Office | Industrial | Leisure | Office | Industrial | Leisure | |
Appraised value (£000) | 175,305 | 463,220 | 84,620 | 224,885 | 439,945 | 79,810 |
Area (sq ft, 000’s) | 706 | 3,227 | 692 | 874 | 3,240 | 692 |
| Range of unobservable inputs: | ||||||
| Gross ERV (sq ft per annum) | £12.45 to | £3.92 to | £3.35 to | £6.00 to | £3.79 to | £3.35 to |
| – range | £93.46 | £29.96 | £28.12 | £87.81 | £27.95 | £21.53 |
– weighted average | £43.74 | £13.69 | £12.42 | £38.26 | £13.37 | £11.63 |
| Net initial yield | 3.51% to | 2.89% to | 0.00% to | -4.85% to | 2.30% to | 6.80% to |
| – range | 12.10% | 8.21% | 24.58% | 10.73% | 7.75% | 42.40% |
– weighted average | 6.96% | 4.53% | 6.15% | 5.22% | 4.63% | 9.17% |
| Reversionary yield | 5.12% to | 4.76% to | 6.97% to | 5.09% to | 4.82% to | 7.00% to |
| – range | 15.39% | 9.17% | 17.13% | 15.01% | 8.05% | 12.72% |
– weighted average | 9.37% | 5.83% | 8.16% | 8.81% | 5.86% | 8.20% |
| True equivalent yield | 5.14% to | 4.78% to | 6.50% to | 4.85% to | 4.75% to | 7.25% to |
| – range | 11.30% | 8.39% | 12.75% | 10.83% | 8.00% | 12.25% |
– weighted average | 8.20% | 5.63% | 7.91% | 7.75% | 5.66% | 8.29% |
An increase/decrease in ERV will increase/decrease valuations, while an increase/decrease to yield decreases/increases valuations. We
have reviewed the ranges used in assessing the impact of changes in unobservable inputs on the fair value of the Group’s property
portfolio and concluded these were still reasonable. The table below sets out the sensitivity of the valuation to changes of 50 basis
points in yield.
Sector | Movement | 2025 | Impact on valuation | 2024 | Impact on valuation |
Industrial | Increase of 50 basis points | Decrease of £39.3m | Decrease of £35.7m | ||
Decrease of 50 basis points | Increase of £47.3m | Increase of £43.1m | |||
Office | Increase of 50 basis points | Decrease of £11.8m | Decrease of £14.6m | ||
Decrease of 50 basis points | Increase of £13.5m | Increase of £16.5m | |||
Retail and Leisure | Increase of 50 basis points | Decrease of £5.0m | Decrease of £4.3m | ||
Decrease of 50 basis points | Increase of £5.7m | Increase of £4.9m |
| Owner | |||
| Occupied | Plant and | ||
| Property | equipment | Total | |
| £000 | £000 | £000 | |
At 1 April 2023 | 3,248 | 167 | 3,415 |
Additions | – | 4 | 4 |
Depreciation | (80) | (63) | (143) |
Revaluation | 223 | – | 223 |
At 31 March 2024 | 3,391 | 108 | 3,499 |
Additions | – | 12 | 12 |
Depreciation | (81) | (54) | (135) |
Revaluation | 128 | – | 128 |
At 31 March 2025 | 3,438 | 66 | 3,504 |
13. Investment properties continued
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Financial
Statements
Additional
Information
15. Accounts receivable
| 2025 | 2024 | |
| £000 | £000 | |
Tenant debtors (net of provisions for bad debts) | 3,034 | 5,279 |
Lease incentives | 21,087 | 19,252 |
Other debtors | 1,001 | 2,070 |
25,122 | 26,601 |
The estimated fair values of receivables are the discounted amount of the estimated future cash flows expected to be received and
the approximate value of their carrying amounts.
Amounts are considered impaired using the lifetime expected credit loss method. Movement in the balance considered to be impaired
has been included in the Consolidated Statement of Comprehensive Income. As at 31 March 2025, tenant debtors of £105,000
(2024: £193,000) were considered impaired and provided for.
16. Cash and cash equivalents
| 2025 | 2024 | |
| £000 | £000 | |
Cash at bank and in hand | 20,771 | 19,747 |
Short-term deposits | 14,549 | 26 |
35,320 | 19,773 |
Cash at bank and in hand earns interest at floating rates based on daily bank deposit rates. Short-term deposits are made for varying
periods of between one day and one month depending on the immediate cash requirements of the Group and earn interest at the
respective short-term deposit rates. The carrying amounts of these assets approximate to their fair value.
| 2025 | 2024 | |
| £000 | £000 | |
Accruals | 5,622 | 4,839 |
Deferred rental income | 5,822 | 7,963 |
VAT liability | 2,715 | 1,899 |
Trade creditors | 658 | 631 |
Other creditors | 5,231 | 5,290 |
20,048 | 20,622 |
| 2025 | 2024 | ||
| Maturity | £000 | £000 | |
| Current | |||
Aviva facility | – | 1,564 | 1,497 |
Capitalised finance costs | – | (176) | (303) |
1,388 | 1,194 | ||
| Non-current | |||
Canada Life facility | 24 July 2031 | 129,045 | 129,045 |
Aviva facility | 24 July 2032 | 79,027 | 80,591 |
NatWest revolving credit facility | 26 May 2025 | – | 16,400 |
Capitalised finance costs | – | (919) | (1,096) |
207,153 | 224,940 | ||
208,541 | 226,134 |
Notes to the Consolidated Financial Statements cont inued
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152
| 2025 | 2024 | |
| £000 | £000 | |
Balance at start of year | 226,134 | 222,764 |
| Changes from financing cash flows | ||
Proceeds from loans and borrowings | – | 4,500 |
Repayment of loans and borrowings | (17,897) | (1,433) |
(17,897) | 3,067 | |
| Other changes | ||
Amortisation of financing costs | 304 | 303 |
304 | 303 | |
Balance as at 31 March | 208,541 | 226,134 |
18. Loans and borrowings continued
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Financial
Statements
Additional
Information
| 2025 | 2024 | |
| £000 | £000 | |
| Authorised: | ||
Unlimited number of ordinary shares of no par value | – | – |
| Issued and fully paid: | ||
536,400,000 ordinary shares of no par value (31 March 2024: 547,605,596) | – | – |
Share premium | 164,400 | 164,400 |
| 2025 | 2024 | |
| Number of shares | Number of shares | |
Ordinary share capital | 547,605,596 | 547,605,596 |
Shares cancelled in the year | (11,205,596) | – |
Number of shares held in Employee Benefit Trust | (2,942,959) | (1,642,440) |
Number of ordinary shares | 533,457,041 | 545,963,156 |
21. Adjustment for non-cash movements in the cash flow statement
| 2025 | 2024 | |
| £000 | £000 | |
Movement in investment property valuation | (12,859) | 26,757 |
Profit on disposal of investment property | (1,496) | – |
Revaluation of owner-occupied property | (128) | (223) |
Share-based provisions | 751 | 729 |
Depreciation of tangible assets | 135 | 143 |
(13,597) | 27,406 |
Notes to the Consolidated Financial Statements cont inued
Picton Property Income Limited
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154
22. Obligations under leases
The Group has entered into a number of head leases in relation to its investment properties. These leases are for fixed terms and
subject to regular rent reviews. They contain no material provisions for contingent rents, renewal or purchase options nor any
restrictions outside of the normal lease terms.
Lease liabilities in respect of rents on leasehold properties were payable as follows:
| 2025 | 2024 | |
| £000 | £000 | |
| Future minimum payments due: | ||
Within one year | 185 | 185 |
In the second to fifth years inclusive | 740 | 740 |
After five years | 8,527 | 8,712 |
9,452 | 9,637 | |
Less: finance charges allocated to future periods | (6,779) | (6,952) |
Present value of minimum lease payments | 2,673 | 2,685 |
The present value of minimum lease payments is analysed as follows:
| 2025 | 2024 | |
| £000 | £000 | |
| Current | ||
Within one year | 115 | 114 |
115 | 114 | |
| Non-current | ||
In the second to fifth years inclusive | 413 | 409 |
After five years | 2,145 | 2,162 |
2,558 | 2,571 | |
2,673 | 2,685 |
| 2025 | 2024 | |
| £000 | £000 | |
Within one year | 44,938 | 43,818 |
One to two years | 38,906 | 38,530 |
Two to three years | 35,263 | 33,085 |
Three to four years | 31,903 | 28,687 |
Four to five years | 28,594 | 24,411 |
After five years | 135,958 | 98,539 |
315,562 | 267,070 |
23. Net asset value
The net asset value per share calculation uses the number of shares in issue at the year end and excludes the actual number of shares
held by the Employee Benefit Trust at the year end; see Note 20.
Picton Property Income Limited
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Additional
Information
| Held at fair | ||||
| value through | Amortised | |||
| profit or loss | cost | Total | ||
31 March 2025 | Notes | £000 | £000 | £000 |
| Financial assets | ||||
Debtors | 15 | – | 4,035 | 4,035 |
Cash and cash equivalents | 16 | – | 35,320 | 35,320 |
– | 39,355 | 39,355 | ||
| Financial liabilities | ||||
Loans and borrowings | 18 | – | 208,541 | 208,541 |
Obligations under head leases | 22 | – | 2,673 | 2,673 |
Creditors and accruals | 17 | – | 11,511 | 11,511 |
– | 222,725 | 222,725 |
| Held at fair | ||||
| value through | Amortised | |||
| profit or loss | cost | Total | ||
31 March 2024 | Notes | £000 | £000 | £000 |
| Financial assets | ||||
Debtors | 15 | – | 7, 349 | 7, 349 |
Cash and cash equivalents | 16 | – | 19,773 | 19,773 |
– | 27,122 | 27,122 | ||
| Financial liabilities | ||||
Loans and borrowings | 18 | – | 226,134 | 226,134 |
Obligations under head leases | 22 | – | 2,685 | 2,685 |
Creditors and accruals | 17 | – | 10,760 | 10,760 |
– | 239,579 | 239,579 |
Notes to the Consolidated Financial Statements cont inued
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| 2025 | 2024 | |
| £000 | £000 | |
Total borrowings | 209,636 | 227,533 |
Gross assets | 764,640 | 773,916 |
Gearing ratio (must not exceed 65%) | 27.4% | 29.4% |
| 2025 | 2024 | |
| £000 | £000 | |
Total liabilities | 231,262 | 249,441 |
Less: cash and cash equivalents | (35,320) | (19,773) |
Net debt | 195,942 | 229,668 |
Total equity | 533,378 | 524,475 |
Net debt to equity ratio at end of year | 0.37 | 0.44 |
| Held at fair | Financial | |||
| value | assets and | |||
| through | liabilities at | |||
| profit | amortised | |||
| or loss | cost | Total | ||
31 March 2025 | Notes | £000 | £000 | £000 |
| Financial assets | ||||
Tenant debtors | 15 | – | 3,034 | 3,034 |
Cash and cash equivalents | 16 | – | 35,320 | 35,320 |
– | 38,354 | 38,354 |
| Held at fair | Financial | |||
| value | assets and | |||
| through | liabilities at | |||
| profit | amortised | |||
| or loss | cost | Total | ||
31 March 2024 | Notes | £000 | £000 | £000 |
| Financial assets | ||||
Tenant debtors | 15 | – | 5,279 | 5,279 |
Cash and cash equivalents | 16 | – | 19,773 | 19,773 |
– | 25,052 | 25,052 |
25. Risk management continued
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Additional
Information
| Less than | More than | |||
| 1 year | 1 to 5 years | 5 years | Total | |
| 31 March 2025 | £000 | £000 | £000 | £000 |
Cash and cash equivalents | 35,800 | – | – | 35,800 |
Debtors | 4,035 | – | – | 4,035 |
Obligations under head leases | (185) | (740) | (8,527) | (9,452) |
Fixed interest rate loans | (9,262) | (37,049) | (215,104) | (261,415) |
Creditors and accruals | (11,511) | – | – | (11,511) |
18,877 | (37,789) | (223,631) | (242,543) |
| Less than | More than | |||
| 1 year | 1 to 5 years | 5 years | Total | |
| 31 March 2024 | £000 | £000 | £000 | £000 |
Cash and cash equivalents | 20,366 | – | – | 20,366 |
Debtors | 7, 349 | – | – | 7, 349 |
Obligations under head leases | (185) | (740) | (8,712) | (9,637) |
Fixed interest rate loans | (9,262) | (37,049) | (224,367) | (270,678) |
Floating interest rate loans | (1,117) | (16,571) | – | (17,688) |
Creditors and accruals | (10,760) | – | – | (10,760) |
6,391 | (54,360) | (233,079) | (281,048) |
25. Risk management continued
Notes to the Consolidated Financial Statements cont inued
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25. Risk management continued
| Less than | More than | |||
| 1 year | 1 to 5 years | 5 years | Total | |
| 31 March 2025 | £000 | £000 | £000 | £000 |
| Floating | ||||
Cash and cash equivalents | 35,320 | – | – | 35,320 |
| Fixed | ||||
Secured loan facilities | (1,564) | (6,983) | (201,089) | (209,636) |
Obligations under leases | (115) | (413) | (2,145) | (2,673) |
33,641 | (7, 396) | (203,234) | (176,989) |
| Less than | More than | |||
| 1 year | 1 to 5 years | 5 years | Total | |
| 31 March 2024 | £000 | £000 | £000 | £000 |
| Floating | ||||
Cash and cash equivalents | 19,773 | – | – | 19,773 |
Secured loan facilities | – | (16,400) | – | (16,400) |
| Fixed | ||||
Secured loan facilities | (1,497) | (6,686) | (202,950) | (211,133) |
Obligations under leases | (114) | (409) | (2,162) | (2,685) |
18,162 | (23,495) | (205,112) | (210,445) |
27. Events after the Balance Sheet date
A dividend of £5,019,000 (0.95 pence per share) was approved by the Board on 2 May 2025 and will be paid on 30 May 2025.
The Company purchased and cancelled 5,360,795 ordinary shares between 1 April 2025 and 19 May 2025 at a cost of £3,960,000.
The £50 million revolving credit facility, which was due to expire on 26 May 2025, has been refinanced with National Westminster Bank
Plc with an initial term of three years and the option of two one-year extensions.
Knight Frank were appointed as independent external valuer effective June 2025, replacing CBRE Limited.
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Financial
Statements
Additional
Information
EPRA BPR and Supplementary Disclosures
(unaudited)
for the year ended 31 March 2025
The European Public Real Estate Association (EPRA) is the industry body representing listed companies in the real estate sector.
EPRA publishes Best Practices Recommendations (BPR) to establish consistent reporting by European property companies.
Further information on the EPRA BPR can be found at www.epra.com.
EPRA performance measures
Measure Definition for EPRA measure 2025 2024
EPRA earnings Earnings from core operational activities. £22.8m £21.7m
EPRA earnings per share EPRA earnings per weighted number of ordinary shares. 4.2p 4.0p
EPRA net reinstatement value (NRV) Assumes assets are never sold and aims to represent the value required to
rebuild the entity. 109p 105p
EPRA net tangible assets (NTA) Assumes entities buy and sell assets, thereby crystallising certain levels of
deferred tax liability. 100p 96p
EPRA net disposal value (NDV) Represents the shareholders’ value under a disposal scenario. 105p 101p
EPRA net initial yield Annualised rental income based on the cash rents passing at the balance
sheet date, less non-recoverable property operating expenses, divided by the
market value of the property. 5.4% 5.4%
EPRA ‘topped-up’ net initial yield This measure incorporates an adjustment to the EPRA NIY in respect of the
expiration of rent-free periods (or other unexpired lease incentives). 6.2% 5.9%
EPRA vacancy rate Estimated Market Rental Value (ERV) of vacant space divided by ERV of the
whole portfolio. 6.2% 9.2%
EPRA cost ratio Administrative & operating costs (including costs of direct vacancy) divided
by gross rental income. 30.9% 32.4%
Administrative & operating costs (excluding costs of direct vacancy) divided
by gross rental income. 21.9% 23.0%
EPRA LTV Debt divided by market value of the property. 24.5% 28.2%
EPRA earnings per share
EPRA earnings represents the earnings from core operational activities, excluding investment property revaluations and gains/losses
on asset disposals. It demonstrates the extent to which dividend payments are underpinned by operational activities.
2025
£000
2024
£000
2023
£000
Profit/(loss) for the year after taxation 37,323 (4,789) (89,530)
Exclude:
Investment property valuation movement (12,859) 26,757 110,433
Gains on disposal of investment properties (1,496) – –
Revaluation of owner-occupied property (128) (223) 382
EPRA earnings 22,840 21,745 21,285
Weighted average number of shares in issue (000s) 544,037 545,437 545,378
EPRA earnings per share 4.2p 4.0p 3.9p
EPRA NRV per share
The EPRA net reinstatement value measure highlights the value of net assets on a long-term basis. Assets and liabilities that are not
expected to crystallise in normal circumstances, such as the fair value of financial derivatives and deferred taxes on property valuation
surpluses, are therefore excluded. Since the aim of the metric is to also reflect what would be needed to recreate the Company
through the investment market based on its current capital and financing structure, related costs such as real estate transfer taxes
should be included.
2025
£000
2024
£000
2023
£000
Balance Sheet net assets 533,378 524,475 547,624
Purchasers’ costs 48,840 50,287 52,759
Fair value of debt – – –
Deferred tax – – –
EPRA NRV 582,218 574,762 600,383
Shares in issue (000s) 533,457 545,963 545,217
EPRA NRV per share 109p 105p 110p
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EPRA NTA per share
The EPRA net tangible assets calculation assumes entities buy and sell assets, thereby crystallising certain levels of deferred tax
liability. EPRA NTA is regarded as the most relevant metric for the business as this focuses on reflecting a company’s tangible assets.
2025
£000
2024
£000
2023
£000
Balance Sheet net assets 533,378 524,475 547,624
Fair value of financial instruments – – –
Deferred tax – – –
EPRA NTA 533,378 524,475 547,624
Shares in issue (000s) 533,457 545,963 545,217
EPRA NTA per share 100p 96p 100p
EPRA NDV per share
The EPRA net disposal value shows the impact to shareholder value if Company assets are sold and/or liabilities are not held until maturity.
2025
£000
2024
£000
2023
£000
Balance Sheet net assets 533,378 524,475 547,624
Fair value of debt 26,113 24,714 22,793
EPRA NDV 559,491 549,189 570,417
Shares in issue (000s) 533,457 545,963 545,217
EPRA NDV per share 105p 101p 105p
EPRA net initial yield (NIY)
EPRA NIY is calculated as the annualised rental income based on the cash rents passing at the Balance Sheet date, less non-
recoverable property operating expenses, divided by the gross market valuation of the properties.
2025
£000
2024
£000
2023
£000
Investment property valuation 723,145 744,640 766,235
Allowance for estimated purchasers’ costs 48,840 50,284 52,759
Gross up property portfolio valuation 771,985 794,924 818,994
Annualised cash passing rental income 42,339 44,745 43,336
Property outgoings (443) (1,669) (2,125)
Annualised net rents 41,896 43,076 41,211
EPRA net initial yield 5.4% 5.4% 5.0%
EPRA ‘topped-up’ net initial yield
The EPRA ‘topped-up’ NIY is calculated by making an adjustment to the EPRA NIY in respect of the expiration of rent-free periods
(or other unexpired lease incentives such as discounted rent periods and step rents).
2025
£000
2024
£000
2023
£000
EPRA NIY annualised net rents 41,896 43,076 41,211
Annualised cash rent that will apply at expiry of lease incentives 5,857 3,947 4,057
Topped-up annualised net rents 47,753 47,023 45,268
EPRA ‘topped-up’ NIY 6.2% 5.9% 5.5%
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Additional
Information
EPRA vacancy rate
The EPRA vacancy rate is the estimated rental value (ERV) of vacant space divided by the ERV of the whole property portfolio,
expressed as a percentage. There are no significant distorting factors influencing the EPRA vacancy rate.
2025
£000
2024
£000
2023
£000
Annualised potential rental value of vacant premises 3,426 5,276 5,311
Annualised potential rental value for the complete property portfolio 55,650 57,578 55,774
EPRA vacancy rate 6.2% 9.2% 9.5%
EPRA cost ratio
The EPRA cost ratio reflects the overheads and operating costs as a percentage of the gross rental income.
2025
£000
2024
£000
2023
£000
Property operating costs 2,629 3,075 3,491
Property void costs 3,887 4,122 3,647
Administrative expenses 7,100 7,219 5,955
Less:
Ground rent costs (230) (257) (376)
EPRA costs (including direct vacancy costs) 13,386 14,159 12,717
Property void costs (3,887) (4,122) (3,647)
EPRA costs (excluding direct vacancy costs) 9,499 10,037 9,070
Gross rental income 43,531 43,910 42,964
Less ground rent costs (230) (257) (376)
Gross rental income 43,301 43,653 42,588
EPRA cost ratio (including direct vacancy costs) 30.9% 32.4% 29.9%
EPRA cost ratio (excluding direct vacancy costs) 21.9% 23.0% 21.3%
The Company has not capitalised any overhead or operating expenses in the accounting years disclosed above.
Only costs directly associated with the purchase or construction of properties as well as subsequent value-enhancing capital
expenditure are capitalised.
Capital expenditure
The table below sets out the capital expenditure incurred over the financial year, in accordance with EPRA Best Practices
Recommendations.
2025 2024
Group
£000
Joint
ventures
£000
Total
Group
£000
Group
£000
Joint
ventures
£000
Total
Group
£000
Acquisitions 533 – 533 – – –
Development – – – – – –
Investment properties
Incremental lettable space – – – – – –
No incremental lettable space 11,794 – 11,794 4,458 – 4,458
Tenant incentives 1,595 – 1,595 – – –
Other material non-allocated types of expenditure – – – – – –
Total capital expenditure 13,922 – 13,922 4,458 – 4,458
Conversion from accrual to cash basis (1,266) – (1,266) – – –
Total capital expenditure on cash basis 12,656 – 12,656 4,458 – 4,458
EPRA BPR and Supplementary Disclosures (unaudited) continued
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EPRA like-for-like rental growth
The table below sets out the like-for-like rental growth of the portfolio, by sector, in accordance with EPRA Best Practices Recommendations.
Rental income from
like-for-like portfolio
2025
£000
Rental income from
like-for-like portfolio
2024
£000
Like-for-like
rental
growth
£000
Like-for-like
rental
growth
%
Industrial 23,790 22,428 1,362 6.1
Office 13,020 13,565 (545) (4.0)
Retail and Leisure 6,214 6,177 37 0.6
Total 43,024 42,170 854 2.0
The like-for-like rental growth is based on changes in rental income for those properties which have been held for the duration of both the
current and prior reporting years. This represents a portfolio valuation, as assessed by the valuer, of £722.6 million (2024: £696.2 million).
EPR A LTV
EPRA loan to value’s aim is to assess the gearing of the shareholder equity within a real estate company.
2025
£000
2024
£000
2023
£000
Loans and borrowings 208,541 226,134 222,764
Less:
Cash and cash equivalents (35,320) (19,773) (20,050)
Net debt 173,221 206,361 202,714
Investment properties (excluding head lease right of use asset) 698,620 721,997 744,261
Property, plant and equipment 3,504 3,499 3,415
Net receivable
1
5,074 5,979 3,278
Total property value 707,198 731,475 750,954
EPRA LTV 24.5% 28.2% 27.0%
1 Net receivable is calculated as the net position of the following line items shown on the Balance Sheet: accounts receivable and accounts payable and accruals.
Loan to value
The loan to value ratio (LTV) is calculated by taking the Group’s total borrowings, net of cash, as a percentage of the total portfolio value.
2025
£000
2024
£000
2023
£000
Total borrowings 209,636 227,533 224,467
Less:
Cash and cash equivalents (35,320) (19,773) (20,050)
Total net borrowings 174,316 207,760 204,417
Investment property valuation 723,145 744,640 766,235
Loan to value 24.1% 27.9% 26.7%
Cost ratio
The cost ratio provides shareholders with an indication of the likely level of cost of managing the Group. The cost ratio uses the annual
recurring administrative expenses as a percentage of the average net asset value over the period.
2025
£000
2024
£000
2023
£000
Administrative expenses 7,100 7,219 5,955
Less:
Internalisation of company secretarial function – (296) –
Abortive corporate activity – (194) –
CFO transition costs (234) (89) –
Chair change (87) – –
Total 6,779 6,640 5,955
Average net asset value over the year 529,744 531,921 602,822
Cost ratio 1.3% 1.2% 1.0%
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Financial
Statements
Additional
Information
Properties valued in excess of
£100 million
– Parkbury Industrial Estate, Radlett,
Herts.
Properties valued between
£50 million and £75 million
– River Way Industrial Estate, River Way,
Harlow, Essex
Properties valued between
£30 million and £50 million
– Stanford Building, Long Acre,
London WC2
– Datapoint, Cody Road, London E16
Properties valued between
£20 million and £30 million
– Lyon Business Park, Barking, Essex
– Express Business Park, Shipton Way,
Rushden, Northants.
– Sundon Business Park, Dencora Way,
Luton, Beds.
– 50 Farringdon Road, London EC1
– Tower Wharf, Cheese Lane, Bristol
– Grantham Book Services, Trent Road,
Grantham, Lincs.
Properties valued between
£10 million and £20 million
– The Business Centre, Molly Millars Lane,
Wokingham, Berks.
– Colchester Business Park, The Crescent,
Colchester, Essex
– B&Q, Queens Road, Sheffield
– Madleaze Trading Estate, Bristol Road,
Gloucester
– 180 West George Street, Glasgow
– Parc Tawe North Retail Park, Link Road,
Swansea
– Nonsuch Industrial Estate, Kiln Lane,
Epsom, Surrey
– Gloucester Retail Park, Eastern Avenue,
Gloucester
– Vigo 250, Birtley Road, Washington,
Tyne and Wear
– 30 & 50 Pembroke Court, Chatham, Kent
– Mill Place Trading Estate, Bristol Road,
Gloucester
– Easter Court, Europa Boulevard,
Warrington
– Metro, Salford Quays, Manchester
– Units 1 & 2, Kettlestring Lane, York
– Swiftbox, Haynes Way, Rugby,
Warwickshire
Properties valued between
£5 million and £10 million
– 401 Grafton Gate, Milton Keynes, Bucks.
– Units 1 & 2, Western Industrial Estate,
Downmill Road, Bracknell, Berks.
– Angouleme Retail Park, George Street,
Bury, Greater Manchester
– Queen’s House, St Vincent Place,
Glasgow
– Regency Wharf, Broad Street,
Birmingham
– Thistle Express, The Mall, Luton, Beds.
– 109–117 High Street, Cheltenham
– Abbey Business Park, Mill Road,
Newtownabbey, Belfast
Properties valued under
£5 million
– Crown & Mitre Complex, English Street,
Carlisle, Cumbria
– Trident House, Victoria Street, St Albans,
Herts.
– Atlas House, Third Avenue, Marlow,
Bucks.
– Sentinel House, Harvest Crescent, Fleet,
Hants.
– Scots Corner, High Street, Kings Heath,
Birmingham
– 6 Kingstreet Lane, Reading
– Waterside House, Kirkstall Road, Leeds
– 78–80 Briggate, Leeds
– 53–57 Broadmead, Bristol
– 17–19 Fishergate, Preston, Lancs.
– 7–9 Warren Street, Stockport
– Oxford Lane, Cardiff
– 6–12 Parliament Row, Hanley, Staffs.
– 72–78 Murraygate, Dundee
Property Portfolio
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164
2025 2024 2023 2022 2021
Income statements
Net property income 37.7 37.9 36.3 35.4 33.5
Administrative expenses (7.1) (7.2) (6.0) (5.7) (5.4)
30.6 30.7 30.3 29.7 28.1
Net finance costs (7.7) (8.9) (9.0) (8.5) (8.0)
Income profit before tax 22.9 21.8 21.3 21.2 20.1
Tax – – – – –
Income profit 22.9 21.8 21.3 21.2 20.1
Property gains and losses 14.3 (26.8) (110.4) 129.8 13.7
Revaluation of owner-occupied property 0.1 0.2 (0.8) 0.4 –
Debt prepayment fee – – – (4.0) –
Profit/(loss) after tax 37.3 (4.8) (89.9) 147.4 33.8
Dividends paid 20.2 19.1 19.1 18.4 15.0
2025 2024 2023 2022 2021
Balance Sheets
Investment properties 700.7 724.0 746.3 830.0 665.4
Borrowings (208.5) (226.1) (222.8) (216.8) (166.2)
Other assets and liabilities 41.2 26.6 24.1 43.9 29.0
Net assets 533.4 524.5 547.6 657.1 528.2
Net asset value per share (pence) 100 96 100 120 97
EPRA net tangible asset per share (pence) 100 96 100 120 97
Earnings per share (pence) 6.9 (0.9) (16.5) 27.0 6.2
EPRA earnings per share (pence) 4.2 4.0 3.9 3.9 3.7
Dividends per share (pence) 3.7 3.5 3.5 3.4 2.8
Dividend cover (%) 113 114 112 115 134
Share price (pence) 71.7 65.2 69.3 98.3 85.8
All figures are in £ million unless otherwise stated.
Five-Year Financial Summary
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Financial
Statements
Additional
Information
Better Buildings Partnership (BBP)
A collaboration of UK commercial property
owners working to improve sustainability of
building stock.
BMS (Building Management System)
A computer-based control system installed
in buildings that control and monitor the
building’s mechanical and electrical
equipment such as ventilation, lighting,
power systems, fire systems and security
systems.
BREEAM (Building Research
Establishment Environmental
Assessment Method)
An established sustainability rating
assessment for projects, infrastructure and
buildings. It assesses assets across their life
cycle, from new construction to in-use and
refurbishment. www.breeam.com
CO
2
(carbon dioxide)
The most abundant greenhouse gas in our
planet’s atmosphere. It is often the
benchmark gas measured for defining a
company’s emissions.
Contracted rent
The contracted gross rent receivable which
becomes payable after all the occupier
incentives in the letting have expired.
Cost ratio
Total operating expenses, excluding one-off
costs, as a percentage of the average net
asset value over the period.
CRREM (Carbon Risk Real
Estate Monitor)
Provides the real estate industry with
transparent, science-based decarbonisation
pathways aligned with the Paris Climate
Goals of limiting global temperature rise to
2°C, with ambition towards 1.5°C.
Dividend cover
EPRA earnings divided by dividends paid.
DTR
Disclosure Guidance and Transparency
Rules, issued by the United Kingdom Listing
Authority.
Earnings per share (EPS)
Profit for the period attributable to equity
shareholders divided by the average
number of shares in issue during the period.
EPC (Energy Performance Certificate)
A certificate which provides a rating based
on set criteria to measure the energy
efficiency of a lettable unit. The scale ranges
from A–G.
EPRA
European Public Real Estate Association, the
industry body representing listed
companies in the real estate sector.
ESG (Environmental, Social, Governance)
A framework that socially conscious
investors use to screen potential
investments. Environmental criteria
consider how a company performs as a
steward of nature. Social criteria examine
how it manages relationships with
employees, suppliers, customers, and the
communities where it operates. Governance
deals with a company’s leadership, executive
pay, audits, internal controls, and
shareholder rights.
Estimated rental value (ERV)
The external valuers’ opinion as to the open
market rent which, on the date of the
valuation, could reasonably be expected to
be obtained on a new letting or rent review
of a property.
EUI (Energy Use Intensity)
Amount of energy used per square foot
annually.
EV (electric vehicle)
A vehicle powered using a battery, solar
panels, fuel cells or electric generator.
Fair value
The estimated amount for which a property
should exchange on the valuation date
between a willing buyer and a willing seller
in an arm’s length transaction after the
proper marketing and where parties had
each acted knowledgeably, prudently and
without compulsion.
Fair value movement
An accounting adjustment to change the
book value of an asset or liability to its fair
value.
FRI lease
A lease which imposes full repairing and
insuring obligations on the tenant, relieving
the landlord from all liability for the cost of
insurance and repairs.
GHG
Greenhouse gas.
GHG absolute
Total GHG emissions.
GHG intensity
A normalised metric set against an
economic output such as number of
employees, revenue or area. Allows for an
emission reduction target to be set which
accounts for economic growth.
GRESB (Global Real Estate Sustainability
Benchmarking)
An investor-driven organisation assessing
the sustainability performance of the real
estate sector, through detailed analysis of
ESG metrics from the corporate to the
individual asset level. www.gresb.com
Grid decarbonisation
Refers to the changing methods of grid
power generation which rely less on fossil
fuels and more on renewable/sustainable
energy sources resulting in fewer emissions
per unit of electricity generated.
Group
Picton Property Income Limited and its
subsidiaries.
IASB
International Accounting Standards Board.
IFRS
International Financial Reporting Standards.
Initial yield
Annual cash rents receivable (net of head
rents and the cost of vacancy), as a
percentage of gross property value, as
provided by the Group’s external valuers.
Rents receivable following the expiry of
rent-free periods are not included.
ISO (International Organization for
Standardization)
An independent, non-governmental
international organisation with a
membership of 164 national standards
bodies, that develops voluntary, consensus-
based, market relevant international
standards that support innovation and
provide solutions to global challenges.
kg/CO
2
/m
2
A measure of emissions intensity.
kWh (kilowatt hour)
A standard unit for measuring electricity
consumption.
kWh/m
2
/year
A unit of measure of a property based on
the annual electricity consumption by a
single square metre. The aggregation of
energy in this way allows for a direct
comparison between properties.
Glossary
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Annual Report 2025
166
Lease incentives
Incentives offered to occupiers to enter into
a lease. Typically this will be an initial
rent-free period, or a cash contribution to
fit-out. Under accounting rules the value of
the lease incentives is amortised through
the Income Statement on a straight-line
basis until the lease expiry.
LED (light-emitting diode)
An energy efficient type of light bulb.
MEES (Minimum Energy Efficiency
Standards)
A piece of legislation set by the UK
Government. From April 2018 a landlord is
unable to renew or grant a new tenancy (over
six months) if the property has an Energy
Performance Certificate (EPC) rating of F or
G.
MSCI
An organisation supplying independent
market indices and portfolio benchmarks to
the property industry.
MWp (megawatt peak)
A unit of measurement for the output of
power from a source such as solar or wind
where the output may vary.
NABERS
A commercial energy rating system that
measures and assesses the performance of
a building.
NAV
Net asset value is the equity attributable to
shareholders calculated under IFRS.
Net zero carbon
The point at which the amount of carbon
being released into the atmosphere is equal
to the amount removed from the
atmosphere.
Offsetting
The process of removing carbon from the
atmosphere to balance emissions into the
atmosphere.
Over-rented
Space where the passing rent is above the
ERV.
Passing rent
The annual rental income currently
receivable as at the Balance Sheet date.
Excludes rental income where a rent-free
period is in operation.
PIR (passive infrared sensor)
A device used to allow automatic lighting
control.
PRI (Principles for Responsible
Investment)
A global proponent of responsible
investment that supports an international
network of investors to incorporate ESG
factors into their investment and ownership
decisions.
Property income return
The ungeared income return of the portfolio
as calculated by MSCI.
PV (photovoltaic)
Photovoltaic (PV) materials and devices that
convert sunlight into electrical energy.
RAAC
Reinforced Autoclaved Aerated Concrete
(RAAC) is a form of lightweight concrete
used in construction in many buildings
between the 1950s and 1990s.
RCP (Representative Concentration
Pathway)
Four pathways developed for the climate
modelling community to assess a number
of different climate scenarios.
REGO (Renewable Energy Guarantees of
Origin)
A scheme which demonstrates that
electricity has been generated from
renewable sources.
Reversionary yield
The estimated rental value as a percentage
of the gross property value.
Scope 1 emissions
Direct emissions from owned or controlled
sources, for example from gas and oil.
Scope 2 emissions
Scope 2 emissions are indirect emissions
from the generation of purchased energy,
for example from electricity.
Scope 3 emissions
All indirect emissions (not included in Scope
2) that occur in the value chain of the
reporting company, including both
upstream and downstream emissions
(e.g. occupier emissions).
TCFD (Task Force on Climate-related
Financial Disclosures)
A framework to help public companies
disclose climate-related risks.
tCO
2
e
Tonnes of carbon dioxide equivalent, which
is a measure that allows you to compare the
emissions of other greenhouse gases
relative to one unit of CO
2
. It is calculated by
multiplying the greenhouse gas’s emissions
by its 100-year global warming potential.
Total property return
Combined income and capital return from
the property portfolio.
Total return
The change in the Group’s net asset value, in
accordance with IFRS, plus dividends paid.
Total shareholder return
Measures the change in share price over the
year plus dividends paid.
UKGBC (UK Green Building Council)
A charity launched by the construction
industry to promote sustainability across the
built environment value chain.
Weighted average debt maturity
Each tranche of Group debt is multiplied by
the remaining period to its maturity and the
result is divided by total Group debt in issue
at the period end.
Weighted average interest rate
The Group loan interest rate per annum at
the period end, divided by total Group debt
in issue at the period end.
Weighted average lease term
The average lease term remaining to first
break, or expiry, across the portfolio
weighted by contracted rental income.
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Annual Report 2025
167
Strategic
Report Governance
Financial
Statements
Additional
Information
Financial Calendar and Shareholder Information
Annual results announced 22 May 2025
Annual results posted to shareholders June 2025
June 2025 NAV announcement July 2025
Annual General Meeting 30 July 2025
2025 half-year results to be announced November 2025
December 2025 NAV announcement January 2026
Dividend payment dates August/November/February/May
Directors
Francis Salway (Chair)
Mark Batten
Helen Beck
Saira Johnston
Richard Jones
Michael Morris
Registered office
Registered Number: 43673
UK office
Stanford Building
27A Floral Street
London
WC2E 9EZ
T: 020 7628 4800
E: enquiries@picton.co.uk
Company Secretary
Kathy Thompson
Stanford Building
27A Floral Street
London
WC2E 9EZ
T: 020 7011 9988
E: kathy.thompson@picton.co.uk
Registrar
Computershare Investor Services
(Guernsey) Limited
1st Floor
Tudor House
Le Bordage
St Peter Port
Guernsey
GY1 1DB
T: 0370 707 4040
E: info@computershare.co.je
Corporate brokers
JP Morgan Securities Limited
25 Bank Street
London
E14 5JP
Stifel Nicolaus Europe Limited
150 Cheapside
London
EC2V 6ET
Independent auditor
KPMG Channel Islands Limited
Glategny Court
Glategny Esplanade
St Peter Port
Guernsey
GY1 1WR
Media
Tavistock Communications
62–64 Cannon Street
London
EC4N 6AE
T: 020 7920 3150
E: james.verstringhe@tavistock.co.uk
Solicitors
As to English law
Norton Rose Fulbright LLP
3 More London Riverside
London
SE1 2AQ
As to English property law
DLA Piper UK LLP
Suite 3
The Plaza
Old Hall Street
Liverpool
L3 9QJ
As to Guernsey law
Carey Olsen
PO Box 98
Carey House
Les Banques
St Peter Port
Guernsey
GY1 4BZ
Property valuer
CBRE Limited
Henrietta House
Henrietta Place
London
W1G 0NB
Tax adviser
Deloitte LLP
Hill House
1 Little New Street
London
EC4A 3TR
Shareholder enquiries
All enquiries relating to holdings in Picton
Property Income Limited, including
notification of change of address, queries
regarding dividend payments or the loss
of a certificate, should be addressed to the
Company’s registrars.
Website
The Company has a corporate website
which contains more detailed information
about the Group.
www.picton.co.uk
Picton Property Income Limited
Annual Report 2025
168
Picton Property Income Limited
Stanford Building
27A Floral Street
London
WC2E 9EZ
020 7628 4800
www.picton.co.uk