Creating
sustainable value
Occupier focused,
Opportunity led.
Picton Property Income Limited
Annual Report 2026
Strategic Report
01 Picton at a Glance
02 Year in Review
03 Investment Case
04 Highlights of the Year
06 Our Purpose
07 Our Strategy
08 Strategy in Action
09 Our Business Model
10 Stakeholder Engagement
12 Chief Executive’s Review
15 Our Marketplace
19 Key Performance
Indicators
23 Portfolio Review
36 Financial Review
42 Managing Risks
43 Principal Risks
50 Sustainable Thinking
54 Environmental Focus
59 Social Impact
62 Governance
64 TCFD Statement
Governance
74 Chair’s Introduction
76 Governance at a Glance
78 Board of Directors
80 Our Team
82 Leadership and Purpose
86 Section 172 Statement
88 Division of Responsibilities
89 Responsibilities of the
Directors
90 Composition, Succession
and Evaluation
91 Nomination
Committee
94 Audit, Risk and
Internal Control
94 Audit and Risk
Committee
98 Property Valuation
Committee
100 Remuneration Report
116 Directors’ Report
Financial Statements
120 Independent Auditor’s
Report
124 Consolidated Statement of
Comprehensive Income
124 Consolidated Statement of
Changes in Equity
125 Consolidated Balance
Sheet
125 Consolidated Statement of
Cash Flows
126 Notes to the Consolidated
Financial Statements
Additional Information
144 EPRA BPR and
Supplementary
Disclosures
148 Property Portfolio
149 Five-Year Financial
Summary
150 Glossary
152 Financial Calendar and
Shareholder Information
Through our occupier focused, opportunity
led approach, we aim to be the consistently
best performing diversified UK Real Estate
Investment Trust (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 2045.
We are listed on the main market of the
London Stock Exchange and a constituent
of a number of European Public Real Estate
Association (EPRA) indices including the
FTSE EPRA Nareit Global Index.
We own and actively manage over
£700 million of UK commercial
property, invested across 46 assets
and with around 300 occupiers.
For more information about us:
Year in Review page 02
Portfolio Review page 23
Sustainable Thinking page 50
Scan or click here
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reporting suite
online
Front cover illustration:
Parkbury Industrial Estate, Radlett
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2025
2024
£723m
£745m
2025
2024
4.9 yrs
4.2 yrs
2025
2024
47
49
Picton at a Glance
We are a diversified REIT investing in UK commercial property.
Our property portfolio consists of assets invested in the industrial,
office, retail and leisure sectors.
Total portfolio composition
Industrial 67%
Office 21%
Retail & Leisure 12%
Our portfolio
We own a portfolio structured
to capture income and
capital growth through our
asset and sector selection.
Our agile business model
provides flexibility to adapt
to evolving market trends.
Geographical weighting Sector weighting
Industrial assets
£469m
South East 47%
Rest of UK 20%
Read more on page 30
Office assets
£146m
London and South East 12%
Rest of UK 9%
Read more on page 32
Retail and Leisure assets
£86m
Retail Warehouse 8%
High Street 2%
Leisure 2%
Read more on page 34
25–50% 10–25% 0–10%
Companies House classification
Contracted
rent %
Wholesale and retail trade 25%
Manufacturing 14%
Information and communication 11%
Administrative and support service activities 10%
Professional, scientific and technical activities 9%
Transportation and storage 7%
Public sector 4%
Accommodation and food service activities 4%
Arts, entertainment and recreation 3%
Construction 3%
Financial and insurance activities 3%
Education 3%
Other 4%
Total 100%
Portfolio valuation
£701m
Weighted average unexpired
lease term (WAULT)
5.4
yrs
Number of assets
46
For more information about us:
Investment Case page 03
Our Business Model page 09
Portfolio Review page 23
Diverse occupier base
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Additional
Information
Financial
StatementsGovernance
Strategic
Report
Picton Property Income Limited
Annual Report 202601
2 3 4 5 6
1
Year in Review
During this financial year we marked our
20-year anniversary. Since launch in 2005,
we have been focused on delivering results,
driven by our purpose: to be a responsible owner
of commercial real estate, helping our occupiers
succeed and being valued by all our stakeholders.
4.8%
ERV growth
23m
Shares
repurchased
over the year
Net zero progress
We have reviewed industry-
recognised approaches to
emission reduction target
setting and aligned our
methodology with the Science
Based Targets Initiative (SBTi).
Our revised net zero strategy
follows the established net zero
hierarchy, prioritising reduced
energy demand, increased
renewable energy supply, and
using offsets only for residual
emissions that are in excess
of our target commitment.
Read more on pages 54 to 58
Capital allocation
strategy and share
buyback programme
Our share buyback
programme has continued to
create value for shareholders.
We have also continued
to reposition the portfolio,
with the disposal of our
highest value office asset
for £34.5 million, further
reducing our office exposure.
Read more on page 08
Strategic Review
The listed UK real estate
sector has been subject
to a prolonged period of
persistent discounted share
price valuation and in light of
this, the Board announced on
13 January 2026 a Strategic
Review process to explore
all options to maximise
value for shareholders.
Read more on page 08
Proactive asset
management
We have completed 27% more
leasing transactions than in the
previous year, delivering 4.8%
ERV growth driven by 99 asset
management transactions.
Our property portfolio has
once more outperformed the
MSCI UK Quarterly Property
Index during the year.
Read more on pages 23 to 35
Upgrading our
portfolio
We have continued to
upgrade the portfolio,
investing £9 million over
the year to improve its
value, occupancy and
environmental performance.
We have made good progress
decarbonising our buildings.
In total, 85% of our office
assets are fully or partially
electric and we have improved
EPC ratings with 86% of
the portfolio rated A–C.
Read more on pages 52 to 53
From our first acquisition, we have owned an
evolving diversified portfolio of industrial, office
and retail assets. The last 20 years have been
defined by our long-term track record of
property outperformance, ranking us in the top
ten percent of the MSCI UK Quarterly Property
Index (as at 31 March 2026).
Our agile, flexible business model and occupier
focused, opportunity led approach to asset
management is at the heart of what we do,
driving long-term income and value creation, with
£339 million in dividends distributed since launch.
02
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Investment Case
We are focused on income and
value growth for the benefit of
our shareholders and through
our occupier focused, opportunity
led approach, we aim to be the
consistently best performing
diversified UK REIT.
13
Consecutive years of
MSCI outperformance
4.8%
Like-for-like ERV growth
12.6%
Total shareholder return
For more information on our strategy and
performance track record please see:
Our Strategy page 07
Key Performance Indicators page 19
Portfolio Review page 23
Long-term track record of outperformance
Our agile business model and diversified investment strategy
provide flexibility to adapt our portfolio to evolving market trends.
Through our proactive approach to asset management, we have
delivered upper quartile outperformance against the MSCI UK
Quarterly Property Index on an annualised basis since launch.
Read more on page 09
Valuable long-term debt structure
We have a disciplined approach to capital management, with
100% long-term fixed rate debt below market rates, and a modest
24% loan to value ratio. We are focused on delivering a covered
and sustainable dividend through our asset and sector allocation.
Read more on page 36
Portfolio with 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
proactive asset management.
Read more on page 23
Responsible approach to business
Our proactive occupier focused approach ensures we engage
with our occupiers to create spaces to help them succeed, ensure
business continuity 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.
Read more on page 50
03
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2026
2025
£26m
£37m
2024
-£5m
2026
2025
£522m
£533m
2024 £524m
2026
2025
5.0p
6.9p
2024
-0.9p
2026
2025
102p
100p
2024 96p
2026
2025
4.0p
4.2p
2024 4.0p
2026
2025
6.1%
8.1%
2024
-0.9%
2026
2025
3.8p
3.7p
2024 3.5p
2026
2025
12.6%
16 .0%
2024
-1.0%
Highlights of the Year
We have been focused on creating
shareholder value and have
delivered positive outcomes across
a wide range of metrics.
Robust financial performance delivering positive total and shareholder returns
Valuable long-term debt structure
Loan to value
24%
Borrowings
£208m
Weighted average
interest rate
3.7%
100% at fixed
interest rates
Debt maturity profile
5.7
yrs
EPRA net disposal
value per share
107p
Reflecting fair
value of debt
These results reflect a year of progress, where
we have delivered a total return of 6.1% alongside
a total shareholder return of 12.6%.
Despite macroeconomic conditions,
occupational markets are proving more resilient,
against a backdrop of limited new development.
We remain well-positioned, with a high quality
portfolio and a disciplined approach to capital
allocation, which this year, has been focused on
reducing office exposure, investing back into the
portfolio and share buybacks.
At the start of 2026, we initiated a Strategic
Review to explore options to maximise value for
shareholders which has resulted in a Proposed
Offer being announced on 12 May 2026. The
Board remains focused on shareholder value
and is committed to engaging with
stakeholders through this process.
For more information on our strategy
and financial performance see:
Chief Executive’s Review page 12
Key Performance Indicators page 19
Financial Review page 36
Francis Salway
Chair
Profit after tax
£26m
Net assets
£522m
Earnings per share
5.0p
NAV per share
102p
EPRA earnings per share
4.0p
Total return
6.1%
Dividends per share
3.8p
Total shareholder return
12.6%
04
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Picton MSCI
Mar
2026
Source: MSCI UK Quarterly Property Index
Mar
2016
Mar
2015
Mar
2017
Mar
2018
Mar
2019
Mar
2020
Mar
2021
Mar
2022
Mar
2023
Mar
2024
Mar
2025
15.0
(15.0)
0.0
(5.0)
(10.0)
5.0
20.0
30.0
25.0
10.0
Mar
2014
Outperforming portfolio Positive sustainable progress
All figures are as at 31 March 2026 or for the year ended 31 March 2026 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 144 to 147 we provide more detailed information and reconciliations to IFRS where appropriate.
Completed lease transactions
99
3% ahead of March 2025 ERV
EPC ratings (A–C) improved from 83% in 2025
86%
Annual reduction in Scope 1 and 2 emissions
23%
Office assets fully/partially decarbonised
85%
Total returns (%) – 13 years of consecutive MSCI outperformance
Portfolio contracted rent
£43m
Like-for-like increase in ERV
4.8%
Portfolio ERV
£56m
Increased weighted average
lease term to
5.4
yrs
Occupancy
84%
Upgrading and investing
into the portfolio
£9m
Rent collection
99%
For more information on our portfolio
performance see:
Portfolio Review page 23
Sustainable Thinking page 50
Sustainability in Action page 52
– Rebaselined our net zero carbon pathway,
setting new near-term and net zero targets
– Expect to be net zero on Scope 1 and 2
emissions by 2035
– Aim to be net zero for all Scopes including
Scope 3 by 2045
05
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Highlights of the Year continued
Our Purpose
Our purpose
To be a responsible owner of commercial
real estate, helping our occupiers succeed
and be 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 strategy
Delivering long-term income and value through our strategic objectives:
Read more on our strategy on page 07
Supported by our values and culture
Our values were co-created by
the team and are behaviours that
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.
01.
Portfolio
Performance
02.
Operational
Excellence
03.
Acting
Responsibly
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Additional
Information
Financial
StatementsGovernance
Strategic
Report
Picton Property Income Limited
Annual Report 202606
For more information:
Chief Executive’s Review page 12
Our Strategy in Action pages 08, 28
and 52
Key Performance Indicators page 19
Our Strategy
Through our occupier
focused, opportunity led
approach, we aim to be the
consistently best performing
diversified UK REIT.
On 13 January 2026, we
announced commencement
of a Strategic Review process to
explore all options available to
maximise value for shareholders.
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 (%)
01. Portfolio Performance 02. Operational Excellence 03. Acting Responsibly
Maximising portfolio value and income Driving efficiency and adaptability
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 a 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 2045
– 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 through strong governance
and transparent reporting
Key progress during the year
– Delivered 5% increase in portfolio ERV
– Disposal of highest value office asset
– £9 million invested into upgrading
the portfolio
– Outperformed the MSCI UK Quarterly
Property Index, delivering a total return
of 5.9% vs the benchmark of 5.4%
Key progress during the year
– Continued and increased share buyback
programme using disposal proceeds
– Delivered total shareholder return of 12.6%
– Delivered EPRA earnings of £21 million
– Maintained a cost ratio of 1.3%
Key progress during the year
– Commencement of the Strategic Review
to maximise value for our shareholders
– Updated our net zero strategy, aligning
our methodology with the SBTi
– Improved occupier engagement scores
Priorities for the year ahead
– Capture the reversionary potential in
the portfolio and increase occupancy
– Continue to reposition the portfolio,
reducing exposure to low yielding
and smaller assets
– Continue to invest in upgrading
the portfolio to enhance asset quality
and facilitate new lettings and
occupier retention
Priorities for the year ahead
– Focus on earnings growth and
appropriate cost management
– Continued focus on capital allocation
strategy and priorities
Priorities for the year ahead
– Ongoing engagement with stakeholders
alongside the Strategic Review process
– Continue asset-level decarbonisation
progress in line with newly set targets
Relevant KPIs
1
3
4
7
9
10
Relevant KPIs
1
2
3
5
6
8
Relevant KPIs
2
10
11
12
Scan or click here for
more information on
the Strategic Review
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Focused on
value creation
We have continued to focus
on maximising value for
our shareholders through
repositioning the portfolio
and recycling capital from
disposal proceeds.
During the year, we
completed on the disposal
of Stanford Building, our
highest value office asset
which was low yielding,
for £34.5 million, further
reducing our office exposure.
We continued to proactively
manage our capital allocation,
using disposal proceeds to
maximise shareholder returns
with our share buyback
programme, deploying
£17.3 million over the year
at an average discount of
25% to the March 2026 NAV.
The total number of shares
repurchased since the
programme began in January
2025 represents 6.2% of the
total number of shares in issue.
We also further invested
£9 million into the portfolio
supporting ERV growth.
Strategic Review
With liquidity and scale
affecting the sector, the
listed UK real estate market
has been characterised by
material valuation discounts
and disconnect in market
pricing. There has been
further consolidation within
the sector, resulting in a
reduced number of UK REITs.
Against this backdrop, the Board
determined that initiating a
Strategic Review was the most
appropriate course of action to
consider all options to maximise
value for shareholders.
On 12 May 2026, a non-binding
indicative all-share offer
(‘Proposed Offer’) from
LondonMetric Property
Plc and Schroder Real
Estate Investment Trust
Limited was announced.
The Company is engaging
with all stakeholders, with
negotiations and due diligence
ongoing. Further details will be
communicated in due course.
£35m
Gross proceeds from
sale of Stanford Building
£17m
Deployed in share
buyback programme
£9m
Invested in portfolio
Strategy in Action
Scan or click
here to read
more on the
Strategic
Review
Illustration:
Stanford Building, London
08
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1
2
3
Link to strategic
priorities:
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
Geopolitical Economic Property cycles ESG Technology
Our Business Model
We capitalise on our
strengths and resources...
Knowledge and expertise
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.
Diversified portfolio
Our diverse occupier base generates a
stable income stream, underpinned by
a well-positioned portfolio across sectors,
and has significant reversionary potential.
Attractive capital structure
We have a disciplined approach to capital
management, with long-term fixed rate debt.
Stakeholder engagement
We foster strong relationships with our
stakeholders and invest in our shared success.
Responsible stewardship
We have a responsible and ethical approach to
business, and sustainability is embedded within
our corporate strategy.
Read more on pages 50 to 72
Effective risk management
Our business model is underpinned by our
approach to risk management.
Read more on pages 42 to 49
Our values
Our values have been co-created by our team
and guide our approach to running the business.
...to create and deliver value... ...for all our stakeholders.
Shareholders
Delivering income
and capital growth
Total shareholder
return
12.6%
Occupiers
Providing sustainable
spaces to help
occupiers succeed
Investment into
asset upgrades
£9m
Employees
Fostering a strong
open culture
Share scheme
alignment
100%
Environment
Targeting 2045
net zero carbon
commitment
Reduction in Scope 1
and 2 emissions
1
23%
1. Compared to 2024 baseline.
Communities
Making a positive
difference
Charities supported
13
Suppliers
Productive
and long-term
relationships with our
business partners
Suppliers engaged
in year
>200
Read more on our strategic response to market drivers on page 18
Read more on stakeholder engagement
on pages 10 to 11
Market drivers
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Stakeholder Engagement
We believe that taking into
account the views of our key
stakeholders is fundamental
to our long-term success.
Through ongoing engagement, we seek to
understand their priorities and strengthen
how we work with them.
Our shareholders
Engaging with our shareholders helps to inform
our strategic decision making, communicate
clearly and report on both our financial and
sustainability performance.
What is important to them?
–
Clear strategy
–
Regular dividends
–
Financial performance
–
Clear and transparent reporting
How we engage
We value the views of all our shareholders and senior
management holds regular meetings to update
shareholders on progress and activity. We issue quarterly
investor updates with key financial highlights and updates
on the portfolio. Our website provides shareholders with
up-to-date information about the Group.
What we have done this year
–
Consultation and engagement with shareholders as
part of the Strategic Review process
– Analyst briefings and investor presentations were
held after the Interim and Annual Results were
announced, alongside additional quarterly
presentations in February following the
announcement of the Strategic Review
– Our AGM was held in person at Stanford Building in
July 2025 and a webinar was held following the
meeting for those unable to attend
– Investor roadshows were also held during the year,
enabling in-person shareholder meetings with the
Chief Executive and Chief Financial Officer
Priorities for the year ahead
– Evaluate opportunities to maximise shareholder value
– Continuing engagement with shareholders
We are occupier focused in our approach and aim to
understand our occupiers’ evolving requirements to
continually improve their experience and create
spaces in which they will succeed.
What is important to them?
–
Cost-effective space suited to their needs
–
Well-managed, efficiently run and sustainable buildings
–
Fair lease terms
–
Good relationships
How we engage
Our Picton Promise, our five key commitments to
our occupiers, ensures our asset managers maintain
regular contact with our occupiers, discussing any
issues regarding the buildings and any future plans.
Our Head of Occupier Services runs our occupier
engagement programme and attends occupier
meetings and other events. Our occupier app and
newsletter also provide relevant and helpful
information across our key multi-let offices and
industrial buildings.
What we have done this year
– We carried out our annual occupier survey at our
multi-let offices as well as at selected industrial and
retail buildings. Results were very positive, with an
increase in occupiers recommending us as a landlord
to 93% from 88% in the previous year. Any issues
raised have been addressed either by our property
managers or our Head of Occupier Services
Priorities for the year ahead
– Complete office refurbishment programme to
create space that meets occupiers’ expectations
– Continue occupier engagement programme,
including sustainability initiatives and improving
energy data collection
Our occupiers
93%
Occupiers would recommend
us as a landlord (2025: 88%)
£25k
Charitable donations
For more information:
Section 172 Statement page 86
Sustainable Thinking page 50
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Our employees
We actively seek employee feedback on our purpose,
values and activities, which support our continued
strong and open culture, together with our working
arrangements and practices.
What is important to them?
–
Fair and equal treatment
–
Career development
–
Fair pay and conditions
–
Good work/life balance
–
Positive work culture and values
How we engage
We have a small team and engage regularly with them
including during an annual two-day team off-site. We
have an appraisal process where each member of the
team will discuss their performance and objectives
with their line manager twice a year.
What we have done this year
– In place of an annual employee engagement survey,
this year more personal engagement was
undertaken by our designated Director for employee
engagement, Helen Beck. She held individual
meetings with members of the team
– We have continued to support the team’s
professional development by encouraging
attendance at training and industry events, as well
as professional membership subscriptions
– Held quarterly lunches with the Board
– Held an additional check-in at year end
Priorities for the year ahead
– Continue our employee engagement
programme and support the team through
the Strategic Review process
We seek to deliver social value to the local
communities where we own buildings, whether
through providing space to local businesses,
improving local areas or minimising the
environmental impact of buildings themselves.
What is important to them?
–
Local employment opportunities
–
Positive contribution to local economy
–
Safe and clean environment
How we engage
We run a matched giving policy through which our
occupiers and employees are invited to apply for a
donation to boost their fundraising efforts. We also
engage through our charity and local community
initiatives and through our occupier engagement
programme.
We have a number of key charity partners which we
support and fundraising or volunteering activities are
arranged with the team where appropriate.
What we have done this year
– The team undertook the ‘Marsden March’, walking
30km along the Thames Path to raise funds for
The Royal Marsden Cancer Charity
– Our charitable donations for the year were £25,000
– We supported 13 different charities
Priorities for the year ahead
– Continue to work with charity partners to see where
we can support and increase social value
– Continue to engage with our occupiers on
fundraising and matched giving opportunities
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.
What is important to them?
–
Prompt payment
–
Fair terms of business
–
Long-term relationships
How we engage
We seek to maintain productive and long-term
relationships with our business partners. Our Supplier
Code of Conduct 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
– We migrated to a new finance system, improving
efficiency and ensuring our suppliers continue to be
paid promptly within payment terms
– We continue to ensure that any material new
suppliers comply with our Supplier Code of Conduct
and Modern Slavery Statement
Priorities for the year ahead
– Continue our review of compliance with Modern
Slavery legislation
– Ensure any material new suppliers adopt our
Supplier Code of Conduct
Local communities
and charities
Our suppliers
Our Section 172 Statement for
the year ended 31 March 2026
is set out on pages 86 to 87 of
the Governance section and
sets out how several of the key
decisions made by the Board
during the year were guided
by stakeholder engagement.
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Stakeholder Engagement continued
Chief Executive’s Review
Our focus on total
return and shareholder
value continues to
deliver positive results.
Michael Morris
Chief Executive
102p
2% increase in net asset value
per share
6.1%
Total return
12.6%
Total shareholder return
Scan or click here to
watch our Results video
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Additional
Information
Financial
StatementsGovernance
Strategic
Report
Picton Property Income Limited
Annual Report 202612
During the year, we marked our 20-year
anniversary and I am now pleased to report a
profit of £26 million for the financial year. Our net
assets have grown to over 102 pence per share
and we have paid dividends of £20 million, fully
covered by EPRA earnings.
This has been set against a backdrop of both
international and domestic economic
uncertainty and volatility. Despite reducing
interest rates in the UK, and an improving
inflation outlook for most of the year, this
was offset by the impact of higher taxes and
weaker business sentiment, but also a delayed
2025 UK Budget. Recent events in the Middle
East have provided another shock to financial
markets, particularly through the impact of
higher energy prices and the inflationary and
interest rate outlook.
A year ago we set out a plan to reduce exposure
to lower yielding assets, rebalance the portfolio to
grow earnings, invest into our portfolio to support
future occupancy and earnings growth, make
prudent use of leverage and unlock shareholder
value with our share buyback programme, using
proceeds from asset disposals.
We have made progress against all of these
objectives, albeit a continued share price discount
to net asset value has led to greater use of share
buybacks relative to new asset acquisitions.
I am particularly pleased that, alongside a total
return of over 6%, our total shareholder return
has been over double that at 13%, reflecting
much of the above activity.
Performance
We have seen NAV per share growth of 2%,
driven in part by portfolio revaluation gains,
but also the positive impact of our share
buyback programme.
Overall profitability was lower, reflecting the
more subdued property market, with earnings
per share of 5.0 pence, compared with 6.9 pence
in the prior year. Similarly, our EPRA earnings
was 4.0 pence compared with 4.2 pence in the
prior year, principally reflecting the change in
occupancy over the year.
Portfolio performance
Our property portfolio, as measured against
the MSCI UK Quarterly Property Index, has
continued to outperform, now for the thirteenth
consecutive year. We have delivered upper
quartile total property return performance since
launch on an annualised basis. Our property
total return this year was 5.9%, which compares
to the MSCI All Property total return of 5.4%.
I am encouraged by the like-for-like ERV growth
of close to 5% driven in part by both the
underlying growth in our industrial assets and
also the positive impact of capital investment
into office assets, enabling us to facilitate leasing
and regear transactions.
We sold our largest office asset by value during
the year, 1% above the preceding valuation,
reducing our office exposure to 21% from 36%
five years ago. The majority of the proceeds were
used to continue our share buyback programme
as well as our ongoing reinvestment
programme into our portfolio to create high
quality assets that meet occupiers’ expectations.
We have reduced
our lower yielding
office exposure to 21%
with the disposal of
our highest value office
asset for £34.5 million.
Sentinel House, Fleet
Whilst we have seen 27% more leasing
transactions relative to last year, and ERV growth
of close to 5%, we have also seen a reduction in
occupancy. The decrease in occupancy is a result
of our lease expiry profile rather than a long-term
structural trend, and reflects a few key lease
events primarily within our industrial assets in
the final half of the year. These lease events at
Radlett and Rushden, which are high quality,
well-located assets, make up over 40% of our
vacancy and represent the two largest
opportunities to capture reversionary upside
in the portfolio and will drive income growth
looking forward. We have received positive
leasing interest in both these assets.
Operational excellence
Recognising our conservative balance sheet
we have continued to use proceeds from
asset disposals to extend our share buyback
programme alongside ongoing reinvestment
into the portfolio.
We continue to operate with a very strong debt
book, with long-term fixed rate debt, priced
below market rates. We refinanced our revolving
credit facility at the start of the year but it was
not drawn during the period, reflecting the
improved cash position from asset disposals.
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Chief Executive’s Review continued
We are pleased to have maintained a cost ratio
of 1.3% and managed our cost base in line with
the prior year, excluding costs in relation to the
Strategic Review.
Acting responsibly
During the year we revised our net zero
strategy to reflect the progress made on the
decarbonisation of our assets since 2019 and to
ensure this aligns with our business objectives.
We aim to reduce our Scope 1 and 2 emissions to
net zero by 2035, whilst allowing more time to
achieve an overall net zero target by 2045. The
latter reflects the need for our own occupiers
and suppliers to be part of the solution and the
longer term engagement that this will require.
This compares to a previous overall net zero
target of 2040.
We have made very good progress decarbonising
our office assets and recognising projects on-site
currently, we expect 85% by value to have been
fully or partially decarbonised and running on all
electric systems by the end of this year. We now
have 86% of the portfolio with EPC ratings A–C.
To mark our 20-year anniversary, we raised over
£20,000 for The Royal Marsden Cancer Charity,
which was particularly poignant as Jay Cable
had been treated there over the past few years.
We have sadly lost a great colleague and
wonderful individual far too soon.
Equity capital markets
For some time the Board has been seeking to
address the impact of the discount between
share price and net asset value.
Throughout the course of the last year, real estate
equities continued to trade at material discounts
to their underlying asset value. The volatility
in the market has been very sensitive to
movements in interest rates, particularly as a
result of instability in the wider financial markets.
Through our share buyback programme, we
have prioritised investment into our own equity
above new acquisitions and this has delivered a
positive impact.
Strategic Review
As announced on 13 January, the Board
launched a Strategic Review to consider
all further options to maximise value for
shareholders, therefore suspending our share
buyback programme.
On 12 May 2026, a non-binding indicative
all-share offer (‘Proposed Offer’) from
LondonMetric Property Plc and Schroder
Real Estate Investment Trust Limited
was announced.
We have created
new net zero targets,
in line with SBTi and
expect to be net zero
on Scope 1 and 2
emissions by 2035.
We aim to be net zero
for all Scopes by 2045.
Datapoint, London
The Company is engaging with all
stakeholders, with negotiations and due
diligence ongoing. Further details will
be communicated in due course.
Outlook
Our portfolio, weighted to industrial, warehouse
and logistics assets continues to be supported
by a diverse occupier base, limited new supply
pipeline, low obsolescence and low capital
investment relative to other sectors.
Our portfolio has a current rent roll of
£37.0 million, with additional rent frees and
stepped rents accounting for £6.1 million. We
have a further £8.8 million of vacancy, with the
two largest industrial voids accounting for over
40% of that upside. In addition, there is
£4.4 million of reversion across the portfolio
where we can reset rents to market levels at
future lease events. The majority of this upside
comes from our industrial portfolio, where we
remain confident in the sector fundamentals.
The Board has agreed to maintain the current
dividend level and will review future increases
following leasing progress within the portfolio.
The year ahead is a key one. Notwithstanding
macroeconomic factors, the drivers of our
future performance relate to an improvement
in occupancy and delivering on asset
management initiatives. We expect to end the
year with a marked improvement in occupancy,
with leasing success following asset upgrades
and capturing the reversionary potential across
the portfolio. This will all provide a significant
platform for future earnings growth.
Michael Morris
Chief Executive
11 June 2026
Chief Executive’s Review continued
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Economic backdrop
The first two months of 2026 were beginning to
show signs of improvement across key economic
indicators, but this was abruptly disrupted by the
outbreak of conflict in Iran on 28 February.
The initial shock triggered market volatility and
a surge in oil and gas prices, increasing inflation
expectations and renewing cost of living
pressures. Interest rate cuts are now expected to
be paused or even reversed, keeping mortgage
rates and borrowing costs elevated. There is now
increased risk of weakened business confidence
and slower economic growth, but this will depend
on how long the conflict lasts.
Macroeconomic conditions remain uncertain despite
a backdrop of reducing interest rates.
The UK is particularly exposed given the reliance
on imported oil and energy. Slower growth and
higher borrowing requirements from the UK
Government was already a challenging fiscal
environment and having a bearing on the risk-free
rate, a key determinant of commercial property
yields. On the day before the conflict began the
ten-year gilt yield was 4.3%. By the end of March
it was 4.9% and has continued to experience
volatility in reaction to the news cycle. The rising
uncertainty within the UK Labour Government
contributed to additional upward pressure
pushing the ten-year gilt yield to over 5% for the
first time since 2008.
Inflation has fallen significantly from its 2022 peak
of 11.1% but is still above target. In March the ONS
reported that annual CPI increased to 3.3%, driven
primarily by higher motor fuel prices. By April,
annual CPI had eased to 2.8%, but is expected to
increase further during 2026 due to higher energy
costs and other underlying price pressures.
The Bank of England has reduced the base rate
by 150 basis points, from its August 2023 peak of
5.25% to 3.75% by December 2025. In April 2026,
the Monetary Policy Committee decided to hold
the base rate at 3.75%.
The labour market has softened, with vacancies
falling and wage growth slowing. Annual wage
growth in real terms was 0.3% for regular pay and
1.0% for total pay from January 2026 to March 2026.
The unemployment rate for the same period was
5.0% compared to 4.5% a year ago.
Retail sales saw a temporary boost in March
due to Easter and food-related spending which
was reversed in April, with the British Retail
Consortium recording a year-on-year decline of
3.4%. Increased uncertainty and concerns over
higher living costs are causing consumers to be
selective about discretionary spending.
Market drivers
Geopolitical
Economic
Property cycles
ESG
Technology
Cautious consumer behaviour is also reflected
in the household savings ratio, which at 9.9% is
high by historic standards. However, this also
indicates that there is potential for consumer
demand to support a sustained recovery when
uncertainty eases.
Despite the outlook being more challenging than
it appeared at the start of the year, the UK has
several underlying strengths that give reason for
cautious optimism. Inflation is well below the
recent peak, wage growth remains positive in real
terms and interest rates are significantly lower
than the 2023 highs. These factors should help
support business, consumer and investor
confidence and lead to a gain in momentum
once geopolitical pressures subside.
Our Marketplace
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All Retail Office Industrial
Mar
2017
Mar
2018
Mar
2019
Mar
2020
Mar
2021
Mar
2022
Mar
2023
Mar
2024
Mar
2026
Mar
2025
40
30
20
10
0
-30
-20
-10
All Retail Office Industrial
0
-15
-10
-5
5
10
15
Mar
2017
Mar
2018
Mar
2019
Mar
2020
Mar
2021
Mar
2022
Mar
2023
Mar
2024
Mar
2026
Mar
2025
All Retail Office Industrial
Mar
2016
Mar
2017
Mar
2018
Mar
2019
Mar
2020
Mar
2021
Mar
2022
Mar
2023
Mar
2024
Mar
2026
Mar
2025
40
30
20
10
0
-30
-20
-10
UK property market
UK real estate investment volumes have been
at a reduced level since 2023, but from this lower
base, strengthened in 2025, surpassing levels
recorded in the previous two years.
For the year ending March 2026, the total
capital invested reached £61.4 billion. Overall,
investment volumes increased 17% compared to
the previous year but this was primarily driven
by an increase in corporate rather than direct
market activity. The fourth quarter of 2025 saw a
marked acceleration, however, this momentum
did not continue into the first quarter of 2026.
By sector, industrial assets accounted for 24%
of total activity and recorded a 32% year-on-year
increase in investment volumes. Offices
represented 23% of the total volume, rising
38% over the same period. Retail investment
accounted for 14% of activity and declined 16%
year-on-year.
The MSCI UK Quarterly Property Index recorded
an All Property total return of 5.4% for the year to
March 2026, driven by 0.6% capital growth and a
4.8% income return. This compares to the 6.2%
total return for the year to March 2025.
Looking at the three main sectors, retail and
industrial outperformed, achieving annual
total returns of 7.6% and 6.1%, respectively.
Meanwhile the office sector lagged, delivering
an annual total return of 4.3%. The retail and
industrial sector total returns were lower than
the prior year, whereas the office sector saw
a marked improvement.
All Property ERV growth was 3.2% for the year
to March 2026, compared to 4.0% in the previous
year. The industrial sector saw the strongest
rental growth at 4.2%, followed by offices at 3.6%
and retail at 2.8%.
UK property market dashboard
12 months to
March 2026
All
Property Industrial Office Retail
Total return 5.4% 6.1% 4.3% 7.6%
Income return 4.8% 4.4% 4.1% 5.8%
Capital growth 0.6% 1.6% 0.3% 1.7%
Number of positive
segments
15 4 2 9
Number of negative
segments 9 1 5 3
ERV growth 3.2% 4.2% 3.6% 2.8%
Number of positive
segments 22 5 7 10
Number of negative
segments 2 0 0 2
Source: MSCI UK Quarterly Property Index
MSCI UK Quarterly Property Index
Annual capital growth (%)
MSCI UK Quarterly Property Index
Annual estimated rental value growth (%)
0.6%
Annual capital
growth
3.2%
ERV growth
17%
Increased
investment
activity
Our Marketplace continued
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Our Marketplace continued
Market drivers
As a UK REIT, our performance is influenced by a broad
range of external forces that shape both the investment
market, impacting yields and pricing, and the occupier
market, impacting demand and rental growth.
Understanding these drivers shapes our strategic approach,
enabling us to position the portfolio effectively and maintain
a resilient income stream.
The global geopolitical
landscape creates both direct
and indirect pressures on
the UK real estate market.
International conflict, political
fragmentation and shifting
trade policies influence
interest rates, oil and energy
costs, supply chains and
investor sentiment. Prolonged
uncertainty can weigh on
business confidence and
economic growth, with
knock-on effects on occupier
demand. In an uncertain
and volatile world, the
UK remains an attractive
destination for global capital,
supported by its high levels
of transparency, governance
and relative political stability.
Domestic economic indicators,
including GDP growth,
government policy, budgets
and fiscal policy, inflation,
interest rates, and labour
market trends, play a central
role in shaping commercial
real estate performance.
These factors influence
capital markets, the cost and
availability of debt, construction
pricing, and business and
consumer confidence.
Economic downturns can
soften occupier demand,
increase vacancy risk and limit
rental growth. Elevated inflation
raises construction costs and
can challenge rent affordability
for occupiers, although supply
constraints in certain sectors
can also support rental growth.
Our approach remains focused
on ensuring the portfolio is
positioned to withstand these
cyclical economic pressures.
The property market is cyclical
and varies significantly across
sectors and geographies.
Whilst each sector has its own
structural drivers, common
themes such as the impact
of inflation and interest rates
on development viability,
shape market behaviour. Asset
selection and sector allocation
remain critical drivers of returns.
Diversification across sectors
and regions helps to dilute
cyclical risk, and support more
stable long-term performance.
Sustainability considerations
are increasingly central to
investment decisions and
asset pricing. Stakeholders,
including investors, occupiers
and local communities, expect
high standards of sustainability,
social impact and governance.
Climate change introduces both
physical risks, such as extreme
weather events, and transitional
risks linked to regulation
and market expectations.
Ensuring asset resilience and
compliance with evolving
ESG legislation is essential to
avoid obsolescence, although
this may increase capital
expenditure requirements.
ESG priorities are integrated
into our strategy, asset
management and
investment activity.
Technological change, in
particular generative and
agentic AI, is expected to
drive significant structural
shifts across the economy
and potentially the real estate
landscape. It may influence
labour markets, workplace
design, occupier requirements,
energy consumption and
cyber security needs. We
monitor technology trends
to ensure our assets meet
occupier requirements and
to identify any opportunities
where technology can
enhance efficiency.
The table overleaf summarises
these key drivers and impacts
associated with the themes
described above and outlines
our strategic response.
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Driver
Geopolitical Economic Property cycles ESG Technology
Themes
impacting
investment
markets
– Capital market dynamics
– Exchange rates
– Cost and availability of debt
– Government bond pricing
– Property yields
– Investor sentiment
– Fiscal policy
– Inflation
– Interest rates
– Cost of debt
– Cost of construction
– Government bond pricing
– Property yields
– Investor sentiment
– Capital markets
– REIT discounts/premiums to NAV
– Liquidity
– Balance of supply and demand
– Rental growth
– Property yields
– Income return
– Asset pricing: green premiums/
brown discounts
– Asset depreciation and
obsolescence
– Risk mitigation
– Capital expenditure
requirements
– Advances in technology shaping
capital markets
– Impact of technological
obsolescence on property
pricing
Themes
impacting
occupier
markets
– Economic growth
– Oil and energy prices
– Supply chains
– Trade tariffs
– Business and consumer
confidence
– Business rates
– Taxation
– Inflation
– Interest rates
– Labour market dynamics
– Business and consumer
confidence
– Consumer spending/retail sales
– Rent affordability
– Rent affordability
– Lease terms and rent incentives
– Competition for space
– Sustainable buildings are less
costly to occupy
– Alignment with occupiers’ own
ESG goals
– Social and wellness amenities
associated with improved
employee retention for
occupiers’ businesses
– Shifting demand
– Reshaping occupier
expectations
– Evolving employment trends
– Workspace configuration
– Cyber security
Our strategic
response
– Able to adapt to market trends
and navigate periods of
uncertainty with our agile and
flexible business model
– Our fixed rate and long-term
debt means we are resilient to a
volatile interest rate environment
– Disciplined approach to capital
structure with a modest level
of gearing
– Operational flexibility through
undrawn revolving credit facility
– Diverse income base with
around 300 occupiers
– Active management of
operating costs
– Considered approach to capital
expenditure
– Proactive asset management
driving performance and
minimising the cost of vacancy
– In-depth understanding of the
UK commercial property market
– Reduced cyclical risk through
diversified portfolio and
occupier base
– Management of sector and
asset allocation to grow income
and capital
– Investment in structurally
supported sectors and locations
– Selective disposals and recycling
of capital
– Proactive engagement with
occupiers to maximise retention
– Integrated approach to ESG
– Focused on reducing our
emissions to achieve our net
zero targets
– Investing in decarbonising
the portfolio
– Committed to mitigating any
physical or transition risks
– Active engagement with our
occupiers, shareholders,
communities and other
stakeholders
– Nurturing a positive working
environment and alignment of
our team
– Strong governance and
transparent reporting
– Our strategy considers
technology and its impact
– 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
Our Marketplace continued
Market drivers continued
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2026
2025
6.1%
8.1%
2024
-0.9%
2026
2025
12.6%
16.0%
2024
-1.0%
2026
2025
5.9%
7.3%
2024 1. 6%
Key Performance Indicators
We have a range of key
performance indicators
that we use to measure
the performance and
success of the business.
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
EPRA vacancy 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.
Our strategic priorities
Portfolio Performance
1
Operational Excellence
2
Acting Responsibly
3
Remuneration link
Financial KPIs
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 2026
Our total return for the year was driven by
positive valuation gains across the portfolio and
our share buyback programme.
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 is a performance
metric used in the Long-term Incentive Plan.
Our performance in 2026
We saw an increase in the share price over the
year, supported by our share buyback
programme, which alongside increased
dividends, contributed to a return of 12.6%.
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 2026
We have outperformed the MSCI UK Quarterly
Property Index for the thirteenth consecutive
year, delivering a return of 5.9% compared to the
Index return of 5.4% for the year. We have also
delivered upper quartile outperformance
against MSCI on an annualised basis since
launch in 2005.
1/ Total return 2/ Total shareholder return 3/ Total property return
6.1% 12.6% 5.9%
Link to strategic priorities:
1
2
3
Link to strategic priorities:
1
2
3
Link to strategic priorities:
1
2
3
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2026
2025
5.2%
5.2%
2024 5.1%
2026
2025
24%
24%
2024 28%
2026
2025
1.3%
1.3%
2024 1.2%
Our strategic priorities
Portfolio Performance
1
Operational Excellence
2
Acting Responsibly
3
Remuneration link
Key Performance Indicators continued
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 positioned towards
income generation in addition to capital growth.
Our performance in 2026
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 every
year 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 2026
The loan to value ratio has remained unchanged
over the year. The Group disposed of one asset
during the year and is holding increased cash
reserves following that disposal.
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 2026
We have sought to manage our cost base
in several areas and are pleased to have
maintained a cost ratio of 1.3% during the
year, excluding costs in relation to the
Strategic Review.
4/ Property income return 5/ Loan to value ratio 6/ Cost ratio
5.2% 24% 1.3%
Link to strategic priorities:
1
2
3
Link to strategic priorities:
1
2
3
Link to strategic priorities:
1
2
3
Financial KPIs continued
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2026
2025
102p
100p
2024 96p
2026
2025
4.0p
4.2p
2024 4.0p
2026
2025
15.7%
6.2%
2024 9.2%
Our strategic priorities
Portfolio Performance
1
Operational Excellence
2
Acting Responsibly
3
Remuneration link
EPRA KPIs
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 2026
The EPRA NTA per share has increased this
year by 2% as a result of the positive valuation
movements, share buybacks 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 2026
Our EPRA earnings have reduced slightly this
year due to lower occupancy and reflecting
the timing of key lease events in the latter half
of the year.
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 2026
EPRA vacancy has increased this year due to key
lease events in the industrial sector, with two
key assets, Rushden and Radlett, accounting for
42% of the void.
7/ EPRA NTA per share 8/ EPRA earnings per share 9/ EPRA vacancy rate
102p 4.0p 15.7%
Link to strategic priorities:
1
2
3
Link to strategic priorities:
1
2
3
Link to strategic priorities:
1
2
3
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Key Performance Indicators continued
2026
2025
35%
66%
2024 76%
2026
2025
86%
83%
2024 80%
2026
2025
–
76%
2024 86%
Our strategic priorities
Portfolio Performance
1
Operational Excellence
2
Acting Responsibly
3
Remuneration link
Non-Financial KPIs
Key Performance Indicators continued
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 2026
In the year, £11.3 million of ERV was at risk from
lease expiries or break options, a marked
increase on the prior year. Of the ERV at risk,
35% was retained through lease renewals or the
removal of break options. Of the ERV that was
not retained, 9% was re-let to a new occupier
within the year, while 56% remains vacant. Two
vacant industrial units account for more than
half of this remaining void.
In addition, a further £3.5 million of ERV was
secured through lease extensions, break
removals, or back-to-back lease surrenders and
re-letting arrangements, 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 consultation
still underway.
Our performance in 2026
The proportion of EPC ratings between A–C has
increased this year, now representing 86% of the
portfolio on an ERV basis. Of the remainder, 12%
is rated D and only 2% is rated E. We are fully
compliant with MEES regulations, with no F or G
rated assets. The proportion of EPC A–B ratings
has risen markedly since 2020 to 46% in
March 2026.
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 2026
This year we did not conduct an annual
employee survey in light of the Strategic
Review. Our designated Director for employee
engagement, Helen Beck, held individual
meetings with members of the team in order
to address questions and concerns directly.
10/ Retention rate 11/ EPC rating A–C 12/ Employee satisfaction
35% 86% –
Link to strategic priorities:
1
2
3
Link to strategic priorities:
1
2
3
Link to strategic priorities:
1
2
3
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01
03
02
08
06
04
07
05
09
10
Portfolio Review
Our £701 million property portfolio
consists of 46 assets. Our diverse
exposure provides flexibility to
adapt as market conditions dictate.
Geographical weighting
25–50% 10–25% 0–10%
Our top ten
properties, which are
each valued in excess
of £20 million,
represent 58% of the
portfolio value.
Scan or click here to see
our full list of properties
Parkbury Industrial
Estate, Radlett
Approx area (sq ft) / 337,900
Capital value (£m) / >100
Occupancy rate (%) / 82
EPC rating / A–D
Shipton Way,
Rushden
Approx area (sq ft) / 312,900
Capital value (£m) / 30–50
Occupancy rate (%) / 0
EPC rating / C
River Way Industrial
Estate, Harlow
Approx area (sq ft) / 464,800
Capital value (£m) / 75–100
Occupancy rate (%) / 99
EPC rating / A–D
Sundon Business
Park, Luton
Approx area (sq ft) / 127,800
Capital value (£m) / 20–30
Occupancy rate (%) / 93
EPC rating / A–D
50 Farringdon Road,
London EC1
Approx area (sq ft) / 31,300
Capital value (£m) / 20–30
Occupancy rate (%) / 61
EPC rating / B
Datapoint, Cody Road,
London E16
Approx area (sq ft) / 55,100
Capital value (£m) / 30–50
Occupancy rate (%) / 90
EPC rating / B
Tower Wharf,
Cheese Lane, Bristol
Approx area (sq ft) / 70,600
Capital value (£m) / 20–30
Occupancy rate (%) / 90
EPC rating / B–C
Lyon Business Park,
Barking
Approx area (sq ft) / 99,400
Capital value (£m) / 20–30
Occupancy rate (%) / 100
EPC rating / B–D
Trent Road,
Grantham
Approx area (sq ft) / 336,100
Capital value (£m) / 20–30
Occupancy rate (%) / 100
EPC rating / C
The Business Centre,
Wokingham
Approx area (sq ft) / 95,800
Capital value (£m) / 20–30
Occupancy rate (%) / 97
EPC rating / B–D
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Portfolio Review continued
Reducing low yielding office
exposure, upgrading the portfolio
and improving rental values.
Market backdrop
The year to March 2026 has
seen mixed economic signals.
On the one hand we have
seen lower inflation and
interest rates, but set against
this, the impact of successive
UK Budgets have weakened
business confidence, and
more latterly the uncertainty of
rising energy costs as a result
of conflict in the Middle East.
Occupational markets have
been robust with a sense of
improving demand through
2025. We have seen modest
but positive rental growth in
all three core markets. We
continue to see leasing activity
across all sectors, albeit asset
specific factors, such as location
and quality of accommodation,
are key drivers of occupational
demand with elevated levels
of supply in some markets.
The investment market has
been more muted since
2023, however, we are now
seeing improved liquidity
for well-positioned assets.
Overall property values have
been relatively stable, with
positive leasing and asset
management activity providing
momentum and offsetting
adverse lease events.
Performance
For the year to March 2026, the
total property return was 5.9%,
outperforming the MSCI UK
Quarterly Property Index which
recorded a total return of 5.4%.
We have outperformed the
benchmark for 13 consecutive
years and delivered upper
quartile performance since
launch, ranking in the 91
percentile. This outperformance
was driven by both income
return and capital growth.
Our portfolio income return
was 5.2%, outperforming the
MSCI income return of 4.8%.
Capital growth was 0.7%,
outperforming MSCI at 0.6%.
Industrial weighting 67%
South East 47%
Rest of UK 20%
Office weighting 21%
London and South East 12%
Rest of UK 9%
Retail and Leisure weighting 12%
Retail Warehouse 8%
High Street 2%
Leisure 2%
Portfolio summary 2026 2025
Like-for-like
% change
Assets 46 47
Area 4.6m sq ft 4.6m sq ft
Occupancy 84% 94%
Total property return 5.9% 7.3%
Capital
Valuation £700.8m £723.1m 1.7%
Disposals £34.5m £51.0m
Acquisitions – £0.5m
Capital expenditure £8.8m £11.8m
Capital receipt £2.4m –
Equivalent yield 6.8% 6.8%
Income
Passing rent £37.0m £42.3m -9.9%
Contracted rent £43.1m £48.2m -8.1%
Void ERV £8.8m £3.4m 163%
Rental uplift to ERV £4.4m £4.0m 26%
ERV £56.4m £55.6m 4.8%
5.9%
Total property
return
5.2%
Income
return
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Capital growth
The portfolio valuation
as at 31 March 2026 was
£700.8 million, a like-for-like
portfolio valuation increase of
1.7% or 0.7% after capital
expenditure, underpinned by
our industrial exposure.
Capital expenditure in the year
was £8.8 million across multiple
projects. These were primarily
focused on refurbishment
upgrades ahead of re-leasing
and decarbonisation works at
our office assets in Bristol,
Colchester and Milton Keynes.
During the year we disposed
of our lowest yielding office
asset, Stanford Building,
London, for £34.5 million, at a
1% premium to the March 2025
valuation, and acquired
the freehold interest of our
long leasehold Cardiff asset
for £0.2 million which will
tactically help unlock future
redevelopment upside.
Income
At a headline level, portfolio
rental income was lower this
year than the previous year.
This was impacted by our
asset disposal and also a
number of key lease events,
which are detailed further
below. We do not believe
our lower occupancy to be
structural. The majority of our
vacancy is under six months
old, but it does have a direct
correlation to income, not
only by virtue of rental income
but associated void holding
costs, be that business rates,
service charges or security.
In terms of portfolio activity,
we have completed 27%
more leasing transactions
than the preceding year,
and by rental value have
completed 35% more lettings.
Recognising tougher
operating conditions, we
continue to work with our
occupiers in a collaborative
way, and where we have had
occupier defaults, we have
re-let 36% of the space.
As a result, over the year we
have seen a reduction in like-
for-like passing rental income
of 9.9% to £37.0 million and a
reduction in contracted rental
income of 8.1% to £43.1 million,
reflecting lower occupancy.
Reversion
Following our asset upgrades,
transactional evidence and
market rental growth, we
have seen a 4.8% like-for-like
increase in the estimated
rental value to £56.4 million.
The portfolio has reversionary
potential of £19.3 million, of
which £6.1 million is achieved
through contractual rental
uplifts, £4.4 million is from
rental uplifts to ERV on lease
1.7%
Like-for-like
portfolio
valuation
increase
4.8%
ERV increase
We have completed 99 asset
management transactions across
a combined annual rent of nearly
£12 million, including £4 million
of new lettings.
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Portfolio Review continued
New rent
March 2025 ERV
£3.9m
£3.8m
New rent
March 2025 ERV
£0.6m
£0.7m
New rent
Previous rent
£4.7m
£4.2m
New rent
Previous rent
£2.7m
£2.3m
events, and £8.8 million is
from leasing our void units.
Portfolio activity
Our programme of targeted
capital investment, a selective
disposal and active leasing has
generated a positive valuation
movement and increased
reversionary potential. We
have completed 99 active
management transactions,
securing uplifted rents
ahead of March 2025 ERV.
– 33 lettings or agreements for
lease, securing additional
rent of £3.9 million, 4% ahead
of ERV
– 43 lease renewals or regears,
securing £4.7 million
per annum, an uplift of
£0.4 million, 10% ahead of
passing rent
– 17 rent reviews, securing an
uplift of £0.4 million per
annum, 18% ahead of passing
rent and 4% ahead of ERV
– Six lease variations to remove
occupier break options,
securing £0.6 million per
annum and extending
the average lease term
by four years
Occupancy
Our occupancy over the year
has reduced to 84% from 94%
in March 2025. This compares
with the MSCI UK Quarterly
Property Index of 91%.
Lower occupancy at the year
end reflected a concentration
of lease events during 2025
and we do not believe this is
a long-term structural trend.
Re-leasing our two key
industrial voids will see this
position reverse and align
with our five-year average
occupancy which has
been over 90%. The total
void ERV is £8.8 million.
Retention
Over the year to March
2026, total ERV at risk due
to lease expiries or break
options totalled £11.3 million.
This figure excludes the
disposal during the year.
We retained 35% of the ERV
at risk, or 44% where leases
were surrendered, principally
in Chatham and Radlett.
Of the ERV not retained, 9%
(£1.0 million) was re-let to
new occupiers during the
year. In addition, £3.5 million
of ERV was secured through
lease extensions, break
removals or back-to-back lease
surrenders and re-lettings,
where lease events were
dated after the year end.
Longevity of income
This was improved over the
year and, as at 31 March 2026,
expressed as a percentage of
contracted rent, the average
length of leases to first
termination was 5.4 years
(2025: 4.9 years). This is
summarised as follows:
%
0 to 1 year 14.9
1 to 2 years 8.2
2 to 3 years 13.9
3 to 4 years 16.9
4 to 5 years 11.8
5 to 10 years 20.9
10 to 15 years 12.0
15 years or more 1.4
Total 100
Portfolio Review continued
99
Asset
management
transactions
5.4
yrs
Average
lease length
Portfolio activity
Lettings (New rent vs
March 2025 ERV)
4%
Break removals (Lease
length extension)
4
yrs
Renewals/regears
(New rent vs previous rent)
10%
Rent reviews (New rent vs
previous rent)
18%
4% ahead of March 2025 ERV
4% ahead of March 2025 ERV
Transactions
Lettings 33
Renewals/regears 43
Break removals 6
Rent reviews 17
99
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Summary and outlook
The commercial property
market has been subdued,
recognising both global and
domestic headwinds. However,
we have seen positive valuation
movement and growth in
rental values over the period.
The occupational markets
in particular, have shown
resilience in the face of
external pressures. Following
the structural repricing over
recent years of the retail and
office sectors in particular,
there has been a greater
depth of investor demand
across a variety of assets.
As we look forward, inflation,
interest rate movement
and cost of capital will be
the key drivers for market
liquidity and capital values.
At present, visibility on these
remains unclear as a result
of geopolitical events and
impact on supply chains
and capital flows. We expect
supply levels and investment
transaction volumes to remain
muted until a clear pathway
is established. In addition,
increases in construction costs
will further restrict the supply
of new developments in an
already constrained market.
We expect occupational
markets to continue to
demonstrate resilience in the
face of external pressures
but demand will continue to
focus on strong geographies
and high quality assets that
meet occupiers’ requirements.
Restricted supply of new
developments will enable
further rental growth for
the best space across most
markets and geographies.
The portfolio has significant
reversion, which we believe
can be unlocked within
the next 12 months and we
remain focused on growing
income and creating value.
We are encouraged by leasing
activity and the rents being
achieved where we have
invested capital to upgrade
assets ahead of re-leasing,
the proof of which has been
demonstrated by the ERV
growth during the year. We are
on-site refurbishing space that
became available during the
year and have a good pipeline
of leasing interest across all
sectors within the portfolio.
Tim Hamlin
Head of Asset Management
11 June 2026
£19m
Reversionary
potential
£9m
Invested into
upgrading
the portfolio
We remain focused
on growing income and
creating value.
For more information:
Industrial activity pages 30 to 31
Office activity pages 32 to 33
Retail and Leisure activity pages 34
to 35
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Portfolio Review continued
Our portfolio has
significant income upside
potential. Re-leasing and
securing uplifts as rents
are reset to market levels
will deliver income and
value growth.
During the year, despite
reduced occupancy, we
have delivered a 5% increase
in overall portfolio ERV,
underpinning further
income growth potential.
The timing of lease events
has been a key driver, with
a number of lease events
increasing void space
at the end of 2025.
We have actively reinvested
capital into upgrading this
space, enhancing its quality
and positioning in order to
capture higher rents. This
includes industrial assets
at Radlett and Rushden,
which together represent
42% of total vacancy.
Portfolio Review continued
Capturing the
reversionary potential
in the portfolio
1
2
3
Link to strategic
priorities:
£8.8m
ERV of void assets
£4.4m
Resetting rents to ERV
Illustration:
Shipton Way, Rushden
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£0.0m
£9.0m
£8.0m
£7.0m
£6.0m
£5.0m
£4.0m
£3.0m
£2.0m
£1.0m
£8.8m
£4.4m
-£1.0m
Vacancy Resetting
rents to ERV
Our vacant reversion, where
space became available during
the period, is concentrated
at industrial assets Rushden
and Radlett, and office
space at Chatham and
Farringdon Road, London.
Refurbishment activity is
well advanced: works at
Rushden are due to complete
in June 2026, Radlett has
undergone a light-touch
upgrade, and Chatham
is now fully refurbished,
with works at Farringdon,
London also underway.
Resetting rents to ERV
In respect of rental uplifts
achieved by resetting rents
to ERV, £3.7 million is in
our industrial portfolio and
£0.9 million in offices. We
still have a small amount,
£0.2 million, of over-rented
space in our retail assets.
We expect to capture
£2.0 million of market rent
upside during the next
financial year, £0.7 million
in the financial year ending
2028 and £1.1 million in the
financial year ending 2029.
The portfolio has a total of
£19.3 million reversionary
upside, comprising £6.1 million
of contracted increases from
rent frees or fixed uplifts,
and £13.2 million from a
combination of leasing vacant
space and resetting rents to
ERV at upcoming lease events.
In respect of the £6.1 million
contractual upside, £2.3 million
is in our industrial portfolio,
£1.9 million is in offices
and £1.9 million is in
retail and leisure.
Vacancy
A significant proportion
of our vacancy is under
refurbishment, ahead of
re-leasing. Of the £8.8 million
of vacant ERV, £4.2 million
relates to industrial assets,
£4.4 million to offices, and
£0.3 million to retail and leisure.
We are making good progress
in converting this into income,
with £3.3 million of ERV already
refurbished and available
for immediate occupation,
and a further £5.1 million of
ERV under refurbishment
or scheduled for works.
Reversionary potential in the portfolio
Rushden
and Radlett
42% of the
total void
The reversionary
potential of the
portfolio from leasing
vacant space and
resetting rents to ERV
is £13.2 million.
42%
Of total void made up
of Radlett and Rushden
£9m
Invested into asset upgrades
£13.2m
Industrial 60%
Office 40%
Retail & Leisure 0%
Illustration:
Parkbury Industrial Estate, Radlett
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Portfolio Review continued
Strong ERV growth driven
by asset management activity.
67%
Industrial
Valuation
£469m
Contracted rent
£23m
Sector weighting
2026 2025
Like-for-like
% change
Assets 19 19
Area 3.3m sq ft 3.2m sq ft
Occupancy 87% 99%
Total property return 5.5% 8.7%
Capital
Valuation £468.7m £463.2m 1.2%
Disposal proceeds – –
Acquisitions – £0.5m
Capital expenditure £2.8m £3.0m
Equivalent yield 5.9% 5.6%
Income
Passing rent £21.0m £22.6m -7.1%
Contracted rent £23.3m £25.7m -9.1%
Void ERV £4.2m £0.4m 894%
Rental uplift to ERV £3.7m £3.4m 9.8%
ERV £31.2m £29.5m 5.9%
Portfolio Review continued
Parkbury Industrial Estate, Radlett
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New rent
March 2025 ERV
£1.8m
£1.7m
New rent
March 2025 ERV
£0.6m
£0.7m
New rent
Previous rent
£2.8m
£2.1m
New rent
Previous rent
£1.3m
£1.0m
Market backdrop
The industrial and logistics
sector has seen modest capital
growth throughout the year.
However, the main driver
of growth has again been
movements in income as rents
are reset on lease events.
Overall, investment transaction
volumes have been driven
by a shortage of supply
of suitable assets rather
than a lack of demand.
Occupational demand has
been resilient with a noticeable
improvement in demand
in the latter half of the year.
Speculative development
remains restricted and areas
of oversupply are starting to
reduce as a consequence.
Key activity
Our industrial assets increased
in value by 1.2% over the
year, to £468.7 million.
Contracted rent has reduced
by 9.1% to £23.3 million and
the ERV grew by 5.9% to
£31.2 million. Occupancy has
reduced from 99% to 87%.
During the year, the occupier
at Rushden exercised
their break option and this
represents the largest single
reversionary opportunity
within the portfolio with an
ERV of more than 50% above
the previous passing rent.
We received a payment of
£2.5 million in accordance with
their lease terms and this will
enable upgrade works to the
building ahead of re-leasing.
At Radlett, an occupier vacated
a unit where we received
£1.1 million in lease surrender
and dilapidations payments
and the ERV is more than
20% above the previous
passing rent. Marketing
has commenced for both
units with good interest.
Over the year we completed
£6.5 million of lease
transactions at an average of
4% ahead of the March 2025
ERV. Of these £1.8 million
were new lettings, 6% ahead
of ERV, £2.8 million were lease
renewals or regears, 7% ahead
of ERV and 32% ahead of
the previous rents. A further
£1.3 million of rent reviews
were completed, securing a
rental uplift of £0.3 million, 6%
ahead of ERV and 31% ahead of
the previous rent. In addition,
we removed five break options
securing £0.6 million.
Key transactions in the
year included:
– Harlow
– l
ease regear
with the largest occupier
securing a ten-year term
subject to breaks with
penalty payments at
£1.0 million, 25% ahead of the
passing rent and 10% ahead
of March 2025 ERV. We also
surrendered a lease and
simultaneously re-let the
unit for £0.6 million per
annum, 5% ahead of the
previous passing rent and
4% ahead of March 2025 ERV
– Radlett – lease renewal
securing £0.3 million per
annum, 64% ahead of the
previous passing rent and
6% ahead of March 2025 ERV
– Additionally, we completed
lettings in Radlett,
Gloucester, Winnersh,
Datapoint, London,
Luton and Warrington for
a combined £0.8 million
per annum, 8% ahead of
March 2025 ERV
Outlook
The industrial portfolio
currently has £10.2 million
of reversionary income
potential: £2.3 million
from contractual uplifts,
£3.7 million from market
reversion and £4.2 million
from leasing void units.
Demand at our multi-let
industrial assets remains
resilient, and we continue to
capture reversionary potential
at lease events with further
rental growth over the period.
Our vacancies at Rushden
and Radlett comprise the
largest income upside. We
continue to see rental growth
in the sector, albeit at a lower
rate than in recent years.
1.2%
Valuation
increase
5.9%
ERV growth
Key asset management activity
Lettings (New rent vs
March 2025 ERV)
6%
Break removals (Lease
length extension)
4
yrs
Renewals/regears
(New rent vs previous rent)
32%
Rent reviews (New rent vs
previous rent)
31%
7% ahead of March 2025 ERV
6% ahead of March 2025 ERV
Transactions
Lettings 15
Renewals/regears 21
Break removals 5
Rent reviews 9
50
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Portfolio Review continued
Industrial continued
Our asset upgrade programme has
delivered leasing results with £1.8 million
of new lettings ahead of ERV, and an
encouraging pipeline.
21%
Office
Valuation
£146m
Contracted rent
£12m
Sector weighting
2026 2025
Like-for-like
% change
Assets 13 14
Area 0.6m sq ft 0.7m sq ft
Occupancy 75% 86%
Total property return 5.3% 1.6%
Capital
Valuation £146.3m £175.3m 3.5%
Disposal proceeds £34.5m £51.0m
Acquisitions – –
Capital expenditure £5.9m £8.1m
Equivalent yield 9.1% 8.2%
Income
Passing rent £10.4m £14.0m -18.1%
Contracted rent £12.3m £14.9m -9.9%
Void ERV £4.4m £2.6m 73%
Rental uplift to ERV £0.9m £1.2m 32.2%
ERV £17.6m £18.7m 4.3%
Portfolio Review continued
Grafton Gate, Milton Keynes
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New rent
March 2025 ERV
£1.8m
£1.7m
New rent
Previous rent
£1.2m
£1.1m
New rent
Previous rent
£1.4m
£1.3m
Market backdrop
Office capital values continued
to weaken during the year,
albeit the rate of decline was
significantly more muted
relative to prior years.
Investment transactions have
been focused on either well-
located, high quality assets
or peripheral buildings more
suited to alternative uses.
There has been almost no new
development in the majority
of office markets outside of
central London and other
large regional cities. At the
same time there remains
an oversupply of secondary
space relative to occupational
demand which is leading
to vacancy and downward
rental pressures, whilst prime
assets are still seeing leasing
activity and rental growth.
Key activity
During the year we completed
the disposal of a low yielding
central London office asset
(following the three office
disposals last year) at a 1%
premium to the March 2025
valuation, which has reduced
our office exposure to 21%.
The value of our office assets
has increased on a like-for-
like basis by 3.5% over the
year to £146.3 million.
We have continued to invest
to improve the quality of
our office space and deliver
better occupier amenities.
Our asset upgrades, leasing
transactions and the impact
of a market with a shortage
of high quality space have
driven rental growth which
has seen the ERV increase
by 4.3% to £17.6 million.
Following an active
management surrender at
Chatham, and space becoming
available at Farringdon, London
and Metro, Manchester, our
office occupancy fell to 75%
from 86%. The passing rent
on our retained office assets
reduced by 18% to £10.4 million,
and the contracted rent
reduced by 10% to £12.3 million.
Over the year we completed
£4.4 million of lease
transactions at an average 2%
ahead of the March 2025 ERV.
Of these, £1.8 million were
new lettings, 3% ahead of ERV
and £1.4 million were lease
renewals or regears, 1% ahead
of ERV and 9% ahead of the
previous rent. We also settled
five rent reviews securing
an uplift of £0.1 million,
9% ahead of passing rent
and 1% ahead of ERV.
We have completed
£1.8 million of leasing
transactions as a direct result
of our refurbishment upgrades,
3% ahead of March 2025 ERV.
Key transactions in the
year included:
– Colchester Business Park
– leased three of the four
suites at Building 200 at
£0.5 million, 7% ahead of
the March 2025 ERV
– Tower Wharf, Bristol – leased
two suites at £0.3 million, in
line with the March 2025 ERV
– Metro, Manchester – secured
a renewal and new letting of
£0.4 million, 4% ahead of the
previous rent and 7% ahead
of the March 2025 ERV
Outlook
Our office assets have a
reversionary yield in excess of
11%. The reversionary potential
is £7.2 million, with £1.9 million
from contractual uplifts,
£0.9 million from resetting to
market rents and £4.4 million
from leasing vacant space.
Whilst pricing has stabilised,
the sector remains polarised.
We expect strong rental
growth to continue at the best
buildings and locations as
new supply is likely to remain
constrained. The weakest
locations and buildings
will continue to suffer from
weak occupational demand
requiring an alternative use.
£35m
Disposal
proceeds
4%
Increase
in ERV
Key asset management activity
Lettings (New rent vs
March 2025 ERV)
3%
Rent reviews (New rent vs
previous rent)
9%
Renewals/regears
(New rent vs previous rent)
9%
1% ahead of March 2025 ERV
1% ahead of March 2025 ERV
Transactions
Lettings 14
Renewals/regears 15
Rent reviews 5
34
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Portfolio Review continued
Office continued
We continue to see high levels of occupancy at
our retail assets and have unlocked additional
value via lease restructures.
12%
Retail and
Leisure
Valuation
£86m
Contracted rent
£7m
Sector weighting
2026 2025
Like-for-like
% change
Assets 14 14
Area 0.7m sq ft 0.7m sq ft
Occupancy 96% 94%
Total property return 10.1% 14.1%
Capital
Valuation £85.8m 84.6m 1.4%
Disposal proceeds – –
Acquisitions – –
Capital expenditure £0.1m £0.7m
Capital receipt £2.4m –
Equivalent yield 7.9% 7.9%
Income
Passing rent £5.6m £5.7m -2.5%
Contracted rent £7.5m £7.6m -1.7%
Void ERV £0.3m £0.4m -28.8%
Rental uplift to ERV -£0.2m -£0.6m 60.4%
ERV £7.6m £7.4m 1.4%
Portfolio Review continued
English Street, Carlisle
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New rent
March 2025 ERV
£0.3m
£0.3m
New rent
Previous rent
£0.5m
£0.8m
New rent
Previous rent
£0.2m
£0.1m
Market backdrop
Retail capital values have
shown modest overall
growth over the year, with
selective rental growth
in certain sub-markets
including central London and
retail parks in particular.
Investment demand has
focused on the retail warehouse
sector which is supported by
consumer behavioural patterns,
and locally dominant high
street and shopping locations.
Occupationally, the sector
shows remarkable resilience in
the face of domestic political
headwinds and broader cost
pressures. However, some
structural issues remain and
the sector remains polarised
between locations with strong
footfall and disposable income
that support rental growth,
and more peripheral locations
unable to attract customers.
Rents in the sector have
broadly rebased and we have
seen rental growth at key high
street locations. Occupier
defaults have remained at
fairly low levels, and notably
much of the space returned
has been absorbed by other
operators, in some instances
at higher rental levels.
The sector offers
opportunities but asset
selection and the ability to
maintain income is key.
Key activity
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 two vacant units in
Swansea. Our high yielding
high street portfolio makes
up 2% of the total portfolio,
and leisure comprises 2%.
Our retail assets increased in
value by 1.4% over the year
to £85.8 million, and the ERV
grew by 1.4% to £7.6 million,
mainly as a result of leasing
transactions. Occupancy
increased from 94% to 96%.
The contracted rent reduced
by 1.7% to £7.5 million, partly
due to a lease restructure
involving receipt of a capital
payment of £2.4 million,
and also the re-letting of
space following the expiry
of an over-rented lease.
Over the year we completed
£1.0 million of lease transactions
at an average 2% ahead of
the March 2025 ERV. Of these,
£0.3 million were lettings, 4%
ahead of ERV, £0.5 million were
lease renewals or regears, 1%
below ERV, three rent reviews
at £0.2 million securing an
uplift of 1% against the previous
rent and a break removal.
Key transactions in the
year included:
– Bristol – leased a unit and
renewed two leases at
£0.3 million, 5% ahead of
the March 2025 ERV
– Leeds – surrendered and
simultaneously re-let a unit
at £0.1 million, 64% ahead of
the previous rent and 27%
ahead of the March 2025 ERV
– Carlisle – restructured the
hotel lease (lower rent,
longer term), in return for a
premium of £2.4 million
Outlook
Our retail and leisure assets
have reversionary potential
of £2.0 million, of which
£1.9 million is contractual
uplifts, £0.2 million of over-
rented leases approaching
expiry and £0.3 million
of vacant units.
The sector offers attractive
income characteristics with
growth potential. However,
the ownership structure of
many retailers magnifies
the risks in the event of
continued economic pressures.
Investment demand is
likely to focus on dominant,
structurally supported
locations, and strong
covenant-backed cash flows.
1.4%
Valuation
increase
1.4%
Increase
in ERV
Key asset management activity
Lettings (New rent vs
March 2025 ERV)
4%
Renewals/regears
(New rent vs previous rent)
-42%
Rent reviews (New rent vs
previous rent)
1%
1% below March 2025 ERV
5% ahead of March 2025 ERV
Transactions
Lettings 4
Renewals/regears 7
Break removals 1
Rent reviews 3
15
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Portfolio Review continued
Retail and Leisure continued
Financial Review
This year we have delivered EPRA
earnings of £21 million and a profit
after tax of £26 million.
£26m
Profit after tax
2025: £37m
2024: £(5m)
£21m
EPRA earnings
2025: £23m
2024: £22m
£4.0p
EPRA earnings per share
2025: £4.2p
2024: £4.0p
3.8p
Dividends per share
2025: 3.7p
2024: 3.5p
103%
Dividend cover
2025: 113%
2024: 114%
24%
Loan to value
2025: 24%
2024: 28%
102p
NAV per share
2025: 100p
2024: 96p
107p
EPRA NDV per share
2025: 105p
2024: 101p
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Additional
Information
Financial
StatementsGovernance
Strategic
Report
Picton Property Income Limited
Annual Report 202636
Our focus at the outset of the year was to reduce
exposure to lower yielding assets and recycle
capital from disposal proceeds into more
attractive risk-adjusted investments, including
share buybacks to deliver shareholder value.
Earnings growth which supports an increasing,
covered and sustainable dividend continues to
be our main focus in a volatile and higher
interest rate environment.
This year we have delivered EPRA earnings
of £20.9 million and a profit of £25.9 million.
It has been a more challenging year to deliver
earnings growth due to our lease expiry
profile, however, we believe the portfolio is
well-positioned in the medium to long-term
as demonstrated by the reversionary potential
and 5% ERV growth during the year.
Whilst EPRA earnings are lower this year, we
have seen continuing modest but positive
valuation movements, as well as the disposal
of our largest office asset for £34.5 million,
1% above March 2025 valuation. These disposal
proceeds have been used to reinvest in the
portfolio and return capital to shareholders
through our share buyback programme which
has been accretive, on a pence per share basis,
to EPRA earnings and EPRA NTA.
Our balance sheet remains robust and our
financial position has been strengthened by the
surplus cash from disposal proceeds, low loan to
value ratio and £50 million undrawn revolving
credit facility.
EPRA earnings
EPRA earnings decreased by 4% to 4 pence
per share during the year as a result of lower
occupancy impacting net property income.
We were pleased to maintain the administration
costs in line with the previous year, and only see
a small increase in the net finance costs. This
analysis is set out in Table A: EPRA earnings.
Net property income
Net property income was £35.8 million, a
decrease of 5% from the previous year due to:
– Industrial occupancy: our occupier in Rushden
exercised their break in October 2025
resulting in reduced rental income, but
represents the largest reversionary potential
within the portfolio. We received a break
penalty of £0.8 million to offset the lost
income and acceleration of lease incentives.
Excluding Rushden, we saw net property
income growth of 5% across the remainder
of the industrial portfolio
– Office occupancy: reduced occupancy at
Farringdon Road, London, Chatham and
Metro, Manchester, where the space has
undergone, or is undergoing refurbishment
for re-leasing
– Retail and leisure rent rebasing and the
occupier lease regear at the hotel in Carlisle
This analysis is set out in Table B.
Rent collection
We continue to be focused on rent collection,
with 99% received during the financial year.
In recognition of a tougher trading environment
for our occupiers, we have sought to agree
payment plans where necessary and maintain
a low arrears position. During the period we
have written off arrears of £0.3 million where
an occupier went into administration.
Table A: EPRA earnings
2026
£m
2025
£m
Rental income 41.2 43.5
Property costs (7.5) (6.5)
Other income 2.1 0.7
Net property income 35.8 37.7
Administration costs
1
(7.1) (7.1)
Net finance costs (7.8) (7.7)
EPRA earnings 20.9 22.9
EPRA earning per share (pps) 4.0 4.2
Table B: Net property income analysis £m
Net property income in the year to 31 March 2025 37.7
Impact of disposals –
Rushden occupier break (1.2)
Industrial net property income movement (excl. Rushden) 1.1
Office net property income movement (1.0)
Retail and leisure net property income movement (0.8)
Net property income in the year to 31 March 2026 35.8
1. Excluding accrued Strategic Review costs of £0.6 million.
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Financial Review continued
Administration costs and cost ratio
Administration costs, excluding the Strategic
Review, have remained in line with the prior
year. The Group cost ratio has been maintained
at 1.3%. We remained focused on managing
our cost base and sought to reduce costs
wherever possible.
Our EPRA cost ratio (excluding direct vacancy
costs) has increased from 22% to 25% during the
financial year in part due to the write-off of
occupier incentives arising from reduced
occupancy over the financial year.
Net finance costs
Our net financing costs have increased from
£7.7 million to £7.8 million as a result of lower
interest income during the year. Our interest
expense is fixed, as 100% of the debt drawn is
under our long-term fixed rate facilities.
Dividends
In May 2025, we announced an increase in the
dividend to 3.8 pence per share, a 2.7% increase.
Dividend cover is 103%.
The Board recognises the importance of
dividend growth and will continue to review
the dividend level going forward.
Balance sheet
Net asset value
The Group’s net asset value as at 31 March 2026
was £522 million, or 102 pence per share. This
reflected an increase of 2% or 2 pence per share
over the financial year. The analysis of the net
asset value movement is set out in Table C.
Table D reconciles the net asset value calculated
in accordance with International Financial
Reporting Standards (IFRS) with that of EPRA.
Portfolio valuation
The property valuation was £700.8 million, an
increase of 1.7% on a like-for-like basis, excluding
Stanford Building, London WC2, which was sold
in the year. This equates to 0.7% including net
capital expenditure, being £8.8 million of capital
expenditure incurred less the £2.4 million
premium received on the lease regear at the
hotel in Carlisle. The lease regear resulted in
a reclassification of the hotel in Carlisle from
investment property to a finance lease receivable.
During the year, we have continued to upgrade
our portfolio with £8.8 million incurred
principally on the office assets to increase
occupier demand and unlock rental income
increases and capital values over the medium to
longer-term.
Disposals
We disposed of Stanford Building, London WC2,
our largest office asset, for gross proceeds of
£34.5 million, 1% above the March 2025
valuation, prior to sale costs and lease incentive
adjustments. On completion of the sale, we
simultaneously entered into a lease of the first
floor which is now classified as a right of use
asset, rather than owner occupied.
The proceeds were released from the security
pool in full and used to increase the share
buyback programme and to reinvest in
the portfolio.
1.7%
Like-for-like valuation
movement
£35m
Disposal proceeds
Table C: Net asset value movement
EPRA NTA
£m
EPRA NTA
pence per
share
March 2025 net asset value 533.4 100.0
EPRA earnings 20.9 4.0
Portfolio valuation 6.6 1.3
Loss on disposals (1.0) (0.2)
Strategic Review costs (0.6) (0.1)
Employee share-based awards 0.7 0.2
Shares purchased by Employee Benefit Trust (0.9) (0.2)
Share buyback (17.3) 1.0
Dividends paid (19.8) (3.8)
March 2026 net asset value 522.0 102.2
Table D: EPRA analysis
2026
£m
2025
£m
2024
£m
Net assets – IFRS and EPRA net tangible asset value
522.0 533.4 524.5
Fair value of debt 21.9 26.1 24.7
EPRA net disposal value 543.9 559.5 549.2
Net asset value per share (pence) 102 100 96
EPRA net tangible asset value per share (pence) 102 100 96
EPRA net disposal value per share (pence) 107 105 101
Financial Review continued
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Financing
Total borrowings were £208.1 million at
31 March 2026, with the loan to value ratio at
23.5%. The weighted average interest rate on
our borrowings was 3.7% and the average loan
duration was 5.7 years.
The fair value of our drawn borrowings at
31 March 2026 was £186.2 million, lower than
the book value by £21.9 million, or an additional
5 pence per share. Market financing rates
continue to be higher relative to the fixed rates
on our long-term loans.
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
£1.6 million.
Summary of borrowings
2026 2025 2024
Fixed rate loans (£m) 208.1 209.6 211.1
Drawn revolving facility (£m) – – 16.4
Total borrowings (£m) 208.1 209.6 227.5
Borrowings net of cash (£m) 164.8 174.3 207.7
Undrawn facilities (£m) 50.0 50.0 33.6
Loan to value ratio (%) 23.5 24.1 27.9
Weighted average interest rate (%) 3.7 3.7 3.9
Average duration (years) 5.7 6.7 7.2
24%
Loan to value
3.7%
Weighted average
interest rate
£50m
Undrawn facilities
100%
Fixed rate debt drawn
£17m
Deployed into share buybacks
25%
Share buyback discount
Cash flow and liquidity
During the year, our cash balances increased to
£43.3 million, mainly due to the disposals during
the year. The cash flow from operating activities
this year was £21.6 million and dividends paid
were £19.7 million.
Net disposal proceeds of £33 million have
primarily been used to repurchase and cancel
shares (£17.3 million) and invest in the property
portfolio (£8.8 million). The remaining proceeds
will be used to fund future capital expenditure.
Share buyback programme
We continued with the share buyback
programme announced on 30 January 2025.
We increased the programme from £10 to
£30 million during the year, with buybacks of
£17.3 million, at an average discount of 25% to
the March 2026 NAV. In total, 33.8 million shares
were purchased and cancelled since the start of
the programme, at a cost of £24.8 million, at an
average price of 74 pence. This total equates to a
28% discount to the March 2026 NAV per share
and has been accretive to both earnings and
NAV, on a pence per share basis.
The share buyback programme was suspended
following the announcement of the Strategic
Review in January 2026.
Employee Benefit Trust
The Company’s Employee Benefit Trust (EBT)
purchased 1,200,000 shares during the year
and holds 3,119,446 shares as at 31 March 2026.
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
11 June 2026
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Financial Review continued
2026
2025
£20.9m
£22.8m
2024 £21.7m
2026
2025
111p
109p
2024 105p
2026
2025
107p
105p
2024 101p
2026
2025
102p
100p
2024 96p
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 144.
EPRA NTA per share
102p
EPRA NDV per share
107p
EPRA NRV per share
111p
EPRA earnings
£20.9m
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 19 to 22.
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 19 to 22,
with further disclosures and
supporting calculations
on pages 144 to 147.
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2026
2025
5.3%
6.2%
2024 5.9%
2026
2025
4.4%
5.4%
2024 5.4%
2026
2025
23.9%
24.5%
2024 28.2%
2026
2025
15.7%
6.2%
2024 9.2%
2026
2025
25.1%
21.9%
2024 23.0%
2026
2025
4.0p
4.2p
2024 4.0p
2026
2025
35.2%
30.9%
2024 32.4%
EPRA earnings per share
4.0p
EPRA cost ratio
1
35.2%
EPRA vacancy rate
15.7%
EPRA cost ratio
2
25.1%
EPRA net initial yield
4.4%
EPRA LT V
23.9%
EPRA ‘topped-up’ net initial yield
5.3%
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 12
Key Performance Indicators page 19
Principal Risks page 43
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Financial Review continued
Managing Risks
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.
Macroeconomic and
geopolitical challenges have
continued into 2026 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.
Risk management
framework
The Board reviewed its
Risk Management Policy in
2025 and has continued to
operate in line with this policy
during the year. The Board
has ultimate responsibility
for risk management and
adopts a structured approach
to considering risks which
informs its decision making.
The Board has reviewed its
principal risks and has added
cyber risk as a principal risk
based on the risk scoring
framework in place. This
reflects the increasing number
of cyber events causing
business interruption generally,
rather than any specific
changes to our operating
environment. During the year,
we have updated our cyber
certifications and worked with
our property managers to
better understand how risk is
managed in our supply chain.
The Board also reviewed
changes in risk trends and in
particular notes the increased
risk scores attached to our
discount and ability to attract
capital and occupier risks.
The impact of the continuing
discount and inability to attract
capital increased during
the year and has been a key
consideration in the decision
to commence a Strategic
Review in January 2026.
From a portfolio perspective,
the Board is monitoring the
increase in vacancy and leasing
activity. The Board views the
decrease in occupancy as a
short-term timing issue due
to the lease profile of the
portfolio rather than a medium
or long-term structural trend.
The Board has also considered
its risk appetite to help
manage risks and operations.
The risk appetite may change
over time and at different
points in the property cycle,
but the overall appetite for risk
remains low and aligned to our
long-term strategic objectives.
The Board considers the
prolonged period of trading
at a significant discount to
NAV and the current level of
occupancy to be nearing its
risk parameter and this is an
area of focus looking ahead.
Responsibilities
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 principal 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.
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Low High
Probable
Unlikely
Likelihood score
Impact score
B
A
D
C
E
F
K
L
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 table below, which also includes
commentary on updates of any changes during the year.
Principal risks
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
Cyber
L
Climate change
Emerging risks
The Board has incorporated
emerging risks into its
principal risks and considers
this to be an appropriate way
of reporting and managing
these, recognising that these
elements are rapidly evolving
and harder to predict.
The risk matrix includes
additional commentary
on emerging risks, and we
continue to monitor these
to determine how they will
affect us, our occupiers
and wider stakeholders.
We continue to monitor the
impact of the conflict in the
Middle East and the evolving
geopolitical landscape’s
impact on investor sentiment
and return expectations.
We are also cognisant of the
impact of technology, and
shifting consumer trends on
our occupiers in adapting our
portfolio and sector mix.
Finally, we will continue to
assess the impact of any
new but unknown changes
in legislation which may
impact the cost and returns
across our portfolio.
For more information:
Principal Risks pages 44 to 49
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Principal Risks continued
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 investors’ return requirements.
Occupiers’ businesses are adversely
impacted by poor economic conditions.
Inflation impacts the Company’s cost base.
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 Board considers economic
and market conditions when
reviewing its strategy and making
investment decisions.
The Board has continued its focus on
capital allocation and reinvesting disposal
proceeds during the year into attractive
areas on a risk return basis, including the
share buyback programme.
Commentary
Current macroeconomic conditions and
geopolitical events mean the outlook
continues with some uncertainty.
The outlook for GDP growth, inflation,
the labour market and other factors
will influence the central bank’s
decision making on interest rates.
Emerging risks:
Geopolitical risk is heightened given
the conflict in the Middle East which,
combined with higher energy prices,
may lead to a higher volatility,
inflation and interest rate
environment for a prolonged period.
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
disposal proceeds to its share buyback
programme with a total programme
commitment of £30 million.
Proactive push to widen shareholder base
with brokers and increase shareholder
engagement, for example, increasing the
frequency and number of webinars.
Commentary
The Board believes that the Company’s
share price has not, for a sustained period
of time, adequately reflected the intrinsic
value of the Company and its assets.
The Company announced a Strategic
Review on 13 January 2026 in order to
explore options available to maximise
value for shareholders.
Overseen by
Board
Risk trend:
Link to strategic priorities:
1
2
3
Overseen by
Board
Risk trend:
Link to strategic priorities:
1
2
3
Market
A B
Economic market conditions Discount and ability to attract capital
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Increasing No change/
stable
Decreasing
Risk trend:
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.
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 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 sought to reduce
exposure to the office sector and
recycle capital from lower yielding
assets. The disposal of the largest office
asset, Stanford Building, completed
in September 2025 for £34.5 million at a
1% premium to 31 March 2025 valuation.
The portfolio is most concentrated in the
industrial sector.
The portfolio has outperformed the MSCI
UK Quarterly Property Index this year.
Emerging risks:
Technological change and the
impact of Artificial Intelligence may
mean assets do not meet future
occupier demand.
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
We have evolved our capital allocation
strategy, deprioritising new acquisitions
at present and allocating capital to
increase the share buyback programme.
MSCI recorded a 17% increase in
transaction volumes in the year
to March 2026, albeit investment
volumes were boosted by portfolio
and corporate deals.
Overseen by
Board
Risk trend:
Link to strategic priorities:
1
2
3
Overseen by
Board
Risk trend:
Link to strategic priorities:
1
2
Portfolio
C D
Portfolio strategy Investment
Increasing No change/
stable
Decreasing
Risk trend:
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Principal Risks continued
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.
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.
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
During the year, two industrial occupiers
exercised their break options, which in
part caused occupancy to reduce from
94% to 84%, despite an increased number
of new lettings/renewals over the year.
The Board views the fall in occupancy as
a short-term timing issue rather than a
medium or long-term structural trend.
The assets are of a high quality and
well located and we therefore remain
confident occupancy will increase in the
near-term.
The occupier market has remained
resilient, with MSCI reporting five
consecutive years of robust levels of
rental growth to March 2026.
Our rent collection rate is 99%.
How is the risk managed
The properties are valued quarterly by
an independent valuer in accordance
with the Royal Institution of Chartered
Surveyors Red Book valuation standards,
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 was appointed as external
valuer effective June 2025 due to
mandatory valuer rotation and the
transition has been smooth.
The Board notes the additional disclosure
in the Knight Frank valuation report
regarding the conflict in the Middle East
and will continue to monitor the impact
of the macroeconomic environment on
the valuation.
Overseen by
Board
Risk trend:
Link to strategic priorities:
1
3
Overseen by
Property Valuation Committee
Risk trend:
Link to strategic priorities:
1
Portfolio continued
E F
Occupiers Valuation
Principal Risks continued
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Increasing No change/
stable
Decreasing
Risk trend:
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 and insufficient cash for
dividends payments.
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 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
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.
Surplus disposal proceeds from the sale of
Stanford Building have been retained to
fund capital expenditure.
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
Gearing has been maintained at a modest
level of 24% during the year.
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 5.7 years.
Overseen by
Executive Committee
Risk trend:
Link to strategic priorities:
2
Overseen by
Board
Risk trend:
Link to strategic priorities:
2
Finance and tax
G H
Liquidity and working capital Gearing
Increasing No change/
stable
Decreasing
Risk trend:
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Principal Risks continued
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.
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
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 Real Estate UK.
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 UK Government continues to support
the REIT regime and its focus to
decarbonise and transition to net zero.
The new Renters Rights Act 2026 does
not impact our portfolio.
Emerging risks:
Increase in new regulation and/or
legislation constrains returns, such as
the proposed ban on upwards only
rent reviews.
How is the risk managed
A succession plan is in place and
reviewed annually.
We have in place an employee
remuneration structure that
supports retention.
We continue to engage with our
employees through our Board and
open culture.
Commentary
During the year, we focused on
embedding additional asset
management resource into the team.
In light of the Strategic Review, the
designated Director for employee
engagement has held one-to-ones
with employees and sought individual
feedback on related matters.
We reviewed our Employee Handbook,
Incident Management Strategy and
Business Continuity Plan.
Overseen by
Board
Risk trend:
Link to strategic priorities:
2
3
Overseen by
Executive Committee
Risk trend:
Link to strategic priorities:
2
Other
I J
Regulatory compliance Operational
Principal Risks continued
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Increasing No change/
stable
Decreasing
Risk trend:
Systems are subject to cyber security
breaches which cause business
interruption, financial or
reputational damage.
Impact
Loss of personal data, loss of financial
information or operations delays will
impact the ability to meet regulatory
reporting and may cause financial loss.
Loss of investor confidence.
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
Annual certification of cyber security with
monthly IT reporting from IT providers.
Employee training.
Commentary
We are not heavily reliant on in-house
systems to carry out our business;
however, the risk of cyber attack
remains. We are reliant on key service
providers for rent collection and
property management and we ensure
we have contractual protection and
appropriate oversight.
Emerging risks:
Increased use of Artificial Intelligence
may have consequences yet
unknown and these will be rapid
and difficult to respond to.
How is the risk managed
Our ESG Governance Policy is in place
and embedded into processes.
The portfolio is diversified across
a number of sectors, assets and
geographic locations.
Flood risk assessments have been
updated for all properties in respect of
pluvial, fluvial and reservoir flooding.
EPC ratings are closely monitored and
reported quarterly to the Board.
Commentary
We have continued to decarbonise and
upgrade our portfolio.
We continue to improve our EPC profile
and remain fully MEES compliant.
Our due diligence and risk assessment
show limited physical or transition risk
within the portfolio, recognising
mitigating actions.
Emerging risks:
Unexpected or accelerated climate
change may lead to an increase in
stranded assets.
Overseen by
Executive Committee
Risk trend:
Link to strategic priorities:
2
Overseen by
Responsibility Committee
Risk trend:
Link to strategic priorities:
2
3
Other continued
K L
Cyber Climate change
Increasing No change/
stable
Decreasing
Risk trend:
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Principal Risks continued
Sustainable Thinking: Practical Solutions
We have refined our net zero targets
to reflect our decarbonisation
progress across the portfolio.
We believe strong ESG performance should
underpin asset-level performance and reduce
downside risk.
Sustainability landscape
The UK’s latest Carbon Budget and Growth
Delivery Plan signals tougher EPC standards,
and investment in cleaner energy.
The industry has made meaningful progress in
defining what net zero carbon means in practice
for UK buildings. The Net Zero Carbon Buildings
Standard, an emerging technical benchmark
that builds on earlier frameworks such as those
developed by the UK Green Building Council
(UKGBC), covers both operational and embodied
emissions and sets targets and limits aligned
with the UK’s carbon budgets. Its pilot phase
concluded in 2025, and the first version was
introduced in March 2026.
Net zero strategy
Following the launch of our new ESG
framework last year, we have continued
to embed new policies whilst developing
additional commitments that reinforce our
long-term approach.
We have assessed options for adopting
industry-recognised emissions reduction
targets and aligned our methodology with the
Science Based Targets Initiative (SBTi). The
SBTi’s Buildings Criteria, which takes a whole
building approach, introduced in August 2024, is
particularly relevant given that around 70% of
our emissions originate from our buildings.
We recognise that reductions within our direct
control are the most readily achievable, and
we expect to be fossil fuel free in landlord-
controlled areas by 2035, eliminating Scope 1
emissions well ahead of the 2045 target. Our
procurement of REGO-backed renewable
electricity means we report zero Scope 2
emissions under the market-based approach as
per the GHG Protocol methodology applied by
SBTi. Our greatest challenge lies in occupier-
related emissions, where progress will depend
on sustained collaboration and engagement.
Across our buildings we continue to prioritise
decarbonisation through the removal of fossil
fuel-based systems and improvements in
operational efficiency. These efforts are reflected
in our improving EPC profile and the emission
reductions being achieved.
For our non-building related emissions, we have
aligned with the SBTi Corporate Net Zero
Standard and set a target of achieving net zero
across our remaining Scope 3 emissions,
including those associated with purchased
goods and services, by 2045.
As a small business, our influence over supply
chain emissions is limited, but we are
committed to working closely with suppliers
to drive meaningful improvement.
Looking ahead
We are proud of the progress made to date and
remain committed to enhancing the quality and
completeness of our data as we work towards
our near and long-term targets.
Michael Morris
Chief Executive
11 June 2026
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Sustainable Thinking continued
Sustainability progress
Key areas of progress
This year we continued to
strengthen our commitment
to responsible and sustainable
practices across the portfolio
and our operations. Key
areas where we have made
progress under the areas
of environmental, social
and governance in the year
are summarised here.
Environmental focus Social impact Governance
Our environmental priorities are 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.
Reduction in Scope 1 emissions Occupiers recommend us as a landlord EPRA award gold rating
21%
Rebaselined our net zero
carbon pathway using SBTi
guidance and set new
near-term and net zero
targets
93%
2025: 88%
Increased number of
occupiers who would
recommend us as a landlord
Maintained EPRA Gold
award for 2025 annual
reporting and
sustainability reporting
EPC rating A–C Charitable donations to 13 charities 2025 GRESB rating
86%
2025: 83%
Improved EPC ratings, with
increased focus on achieving
a higher proportion of A and
B ratings in the portfolio
£25k
2025: £26k
Continued support for our
key charity partnerships, in
addition to our fundraising
walk for The Royal Marsden
Cancer Charity
Improved our
GRESB score to 82 and
retained 3 green stars
Scope 3 data collection Average length of employee service Investor meetings
35%
2025: 55%
Continue to work on
collecting Scope 3 data with
final figures quoted later in
the year in our Sustainability
Data Performance Report
6
yrs
2025: 6 yrs
Aligned, nimble and
experienced team with an
open and inclusive culture
74
2025: 66
In addition to increased
investor engagement, we
attended the EPRA 2025
Corporate Access Event
– Reduced the amount of waste emissions
generated in landlord-controlled areas by 18%
– Continued our biodiversity focused
partnership with Youngwilders
– Published our net zero strategy, Climate
Change Policy, Waste Statement and updated
Biodiversity Policy
– Maintained our strong health and safety
record with no reportable accidents, near
misses or other health and safety incidents
– Remained 99% compliant in all critical and
secondary health and safety documents
– Reviewed our charity partnerships in line with
our Social Impact Policy
– Team undertook 480 training hours
– Remained aligned with the Better Buildings
Partnership
– Continued to assure our environmental
performance information in accordance with
ISAE 3000
– Reviewed all ESG policies and published four
new strategies, statements and policies
Read more on pages 52 to 58 Read more on pages 59 to 61 Read more on pages 62 to 63
Scan or click here to see our
ESG strategy and policy framework
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Sustainable Thinking continued
Sustainability in Action
Decarbonising
our office assets
To develop our original net
zero pathway, we undertook
a comprehensive mapping
of our 2019 operational
emissions, identifying the
sources within our direct
control. This confirmed
that the greatest
opportunity for meaningful
decarbonisation lay within
our office portfolio.
Since then, we have been
systematically removing fossil
fuel-based systems from
our offices and transitioning
buildings to fully electric
solutions, scheduling works
around lease events and
collaborating closely with
occupiers to minimise
disruption. In many cases
occupiers were able to
remain in situ throughout
the upgrades, with several
contributing to the cost in
recognition of the shared
long-term benefits.
To date, 40% by value of
our office assets have been
fully decarbonised, 45%
have undergone partial
decarbonisation and only
three office buildings, or
15%, now remain reliant
on gas, highlighting the
significant progress made in
a relatively short timeframe.
40%
Office assets fully
decarbonised
45%
Office assets partially
decarbonised
Illustration:
Tower Wharf, Bristol
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13
9
1
7
8
4
10
2
11
5
3
6
12
Fully
Partially
Not started
Current EPCs
1. Bristol, Tower Wharf B–C
2. Chatham, 30 & 50 Pembroke Court A–C
3. Cheltenham, 109–117 High Street B
4. Colchester, Colchester Business Park A–D
5. Fleet, Sentinel House A
6. Glasgow, Queens House B
7. Glasgow, 180 West George Street B
8. Leeds, Waterside House C
9. London, 50 Farringdon Road B
10. Manchester, Metro Building B–D
11. Marlow, Atlas House A
12. Milton Keynes, 40 Grafton Gate A
13. St Albans, Trident House B
Decarbonisation status
Tower Wharf,
Bristol
Summary of work
Whole building de-
carbonisation scheme.
Removal of existing air
conditioning system, including
gas boilers, and replacement
with new energy efficient
VRF air conditioning system
along with refurbishment of
the central ventilation plant.
Progress to date
Project underway with
works expected to complete
September 2026.
Expected EPC
A
Expected EPC
B
Expected EPC
A
Expected EPC
B
Metro,
Manchester
Summary of work
Whole building de-
carbonisation scheme.
Removal of gas systems from
the building and replacement
with rooftop air source heat
pump technology to provide
heating and cooling to the
building. The works also
include a major overhaul of the
existing internal fan coil units.
Progress to date
Project underway with
works expected to
complete Summer 2026.
50 Pembroke Court,
Chatham
Summary of work
Following the whole building
decarbonisation and air
conditioning replacement
scheme, the building has
undergone extensive electrical
upgrades and infrastructure
works to improve metering
and transparency on usage.
Progress to date
Project completed.
Building 200,
Colchester
Summary of work
Phase 2 refurbishment of the
west wing of the building to
facilitate partial re-letting.
The office will benefit from
new energy efficient VRF
air conditioning systems,
more efficient ventilation
plant and LED lighting.
Progress to date
Project underway with
works expected to complete
by Summer 2026.
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Sustainable Thinking continued
Sustainability in Action 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.
Our environmental priorities
are climate change, climate
resilience and biodiversity,
and we are aligned to the
United Nations Sustainable
Development Goals (UN SDGs)
of climate action, sustainable
cities and communities,
responsible consumption
and production, affordable
and clean energy, life on
land and life below water.
Our net zero
commitment
In 2022, we published our
pathway to net zero and
accompanying action plan,
committing to achieve net
zero carbon across both
operational and embodied
carbon emissions by 2040,
relative to a 2019 baseline. We
have since made substantial
progress and delivered many
of the early actions set out
in our original roadmap.
Whole-building
in-use operational
emissions targets
Near-term
reduction target
73%
per m
2
We commit to reducing
Scope 1, market-based
Scope 2 and Scope 3 in-use
operational GHG emissions of
owned and leased buildings
73% per m
2
by 2035 from
the 2024 baseline year.
Net zero target
96%
per m
2
We commit to reducing
Scope 1, market-based
Scope 2 and Scope 3 in-use
operational GHG emissions of
owned and leased buildings
96% per m
2
by 2045 from
the 2024 baseline year.
Scope 3 targets
Near-term target
63%
We commit to reducing
absolute Scope 3 emissions
63% by 2035 from the
2024 baseline year.
Net zero target
90%
We commit to reducing
absolute Scope 3 emissions
90% by 2045 from the
2024 baseline year.
Environmental focus
Continued focus on
decarbonising our assets
and reducing our emissions
Connected UN SDGs:
An important next step was
to establish robust emissions
reduction targets. After
evaluating the available
frameworks, we have aligned
our approach with the SBTi,
which required us to recalculate
and expand our baseline to
include additional emissions
categories and set new near-
term and long-term net zero
targets. This has shaped a
comprehensive, target-led net
zero strategy that provides a
clear, credible and actionable
pathway to achieving our goals.
In August 2024, the SBTi
launched the Buildings Sector
Science-Based Target-Setting
Criteria. Under the updated
framework we are required
to set whole-building in-
use operational targets and
corporate Scope 3 targets. As
around 70% of our emissions
originate from building-related
activities, it is appropriate for us
to set targets using this method.
To reflect the progress we have
already made, the broader
scope of the new baseline and
the varying level of influence
we have across different
emission categories, we have
set our new SBTi-aligned net
zero target to 2045 across all
Scopes, later than our original
2040 commitment but still
five years ahead of the UK
Government’s 2050 deadline.
Sustainable Thinking continued
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We are also introducing a
near-term target of 2035 across
all Scopes, to ensure progress
towards our long-term goals.
We expect to be net zero on
Scope 1 and 2 emissions by
our SBTi near-term target.
Reporting
The Annual Report will
continue to disclose our
annual emissions in line
with EPRA Best Practices
Recommendations, however,
due to ongoing challenges
in obtaining reliable and
timely occupier-controlled
emissions data, we will report
progress against our SBTi
aligned targets through a
separate, dedicated update.
This approach enables us
to maintain our established
timeseries of core emissions
data published in the Annual
Report and Sustainability
Data Performance Report,
whilst we transition to
the SBTi methodology.
Biodiversity
This year we have updated our
Biodiversity Policy to clearly
set out our approach and
commitment to protecting,
enhancing and sustainably
managing biodiversity
across our assets, thereby
contributing to the protection
of ecosystems and promoting
environmental stewardship.
Although we do not own
land or undertake new build
development projects, our direct
influence extends to rooftops,
grass verges and other small
outdoor spaces. Our focus is
therefore on raising awareness
amongst stakeholders,
integrating biodiversity
considerations into decision
making, and supporting
local restoration initiatives.
Healthy ecosystems enhance
asset resilience and contribute
to the wellbeing of our
occupiers. Working closely
with our property managers,
we seek to minimise any
negative impact associated
with our buildings.
We also partner with
Youngwilders, a community
interest company dedicated to
biodiversity and nature recovery.
We provide financial support
and business advice to help
them accelerate their impact.
Climate change
We recognise the importance
of addressing climate change
and are committed to
incorporating sustainability
and resilience into our
investment, operational and
management strategies.
This year we published our
Climate Change Policy which
focuses on achieving net zero
emissions, enhancing climate
resilience, and driving long-term
value for all our stakeholders.
Key objectives in our Climate
Change Policy include:
– Annual measuring
and reporting of our
carbon footprint
– Achieving net zero carbon
by 2045
– 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 (TCFD)
– Regularly assessing and
disclosing climate risk and
opportunities in line with
best practice
2035
Near-term target
2045
Net zero target
Our Climate Change Policy
focuses on achieving net zero
emissions, enhancing climate
resilience and driving long-term
value for all our stakeholders.
Michael Morris
Chief Executive
Scan or click
here to read our
Net zero
strategy
Scan or click
here to read our
Biodiversity
Policy
Scan or click
here to read our
Climate Change
Policy
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Sustainable Thinking continued
Climate resilience
We are committed to ensuring
that our portfolio is resilient
to the impacts of climate
change from both physical
and transition risks. We
incorporate sustainability and
resilience into our investment,
refurbishment and asset
management strategies.
We report annually in line with
TCFD. Our TCFD Statement,
which sets out our approach
to identifying and managing
climate-related risk, can be
found on pages 64 to 72.
Data and certifications
We have redefined our
portfolio’s baseline carbon
footprint using 2024 to map
the emissions reductions
required to meet our new
SBTi-aligned near-term and
net zero targets. In the Annual
Report we disclose Scope 1
and 2 emissions in full. Under
Scope 3 we report business
travel, landlord water and
treatment, landlord waste
and any occupier electricity
and fuel consumption data
that we are able to collect
prior to publication.
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.
Our environmental performance
information is independently
assured in accordance with
the International Standard
on Assurance Engagements
3000, Revised (ISAE 3000).
We publish our Sustainability
Data Performance Report
post assurance in June 2026,
which captures any later
collected occupier consumption
data under Scope 3.
From this year, we will provide an
additional update on progress
against our SBTi-aligned targets,
which will capture all categories
required under Scope 3.
Greenhouse gas
emissions
We have continued to make
meaningful progress in
decarbonising the portfolio
by phasing out fossil fuel-
based systems. In 2025, we
achieved a 21% reduction in
Scope 1 emissions intensity and
an 8% like-for-like reduction
compared with 2024.
Our Scope 2 emissions intensity
fell by 26% year-on-year, with
a like-for-like reduction of 15%.
We continue to purchase 100%
of our electricity from REGO-
backed renewable sources.
Our focus for the next phase
will be on reducing the energy
demand of our buildings in
line with our SBTi targets.
Head office emissions,
which fall under Scope 1 and
2, decreased by 51% on an
absolute and intensity basis in
2025 compared with 2024.
The majority of our Scope
3 emissions arise from
occupier electricity and fuel
consumption. To date we have
collected 35% of our Scope 3
occupier data, which compares
to 55% in last year’s Annual
Report. A further update will be
provided in our Sustainability
Data Performance Report
in June, by which time we
expect to have achieved a
higher data collection rate.
2025 2024 2023
GHG emissions
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
907 0.017 1,154 0.021 1,161 0.019
Electricity, heat,
steam and cooling
purchased for
own use
2
1,239 0.014 1,619 0.019 1,748 0.019
Head office
premises
1 & 2
3 0.013 7 0.025 7 0.026
Total Scope 1
and 2 2,150 0.023 2,780 0.030 2,916 0.029
Business travel
3
7 N/A 5 N/A 9 N/A
Occupier data
(electricity and
fuel consumption)
3
3,387
1
0.026 9,404 0.030 9,309 0.031
Landlord water
and treatment
3
13 0.0002 11 0.0001 18 0.0002
Landlord waste
3
2 0.0000 2 0.0000 10 0.0002
Total Scope 3 3,409 0.026 9,423 0.030 9,346 0.024
Total all Scopes 5,559 0.027 12,203 0.030 12,263 0.032
1. Data not complete.
21%
Scope 1 emissions
intensity reduction
8%
Like-for-like reduction
in Scope 1 emissions
Sustainable Thinking continued
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Annual change in emissions
Change in
absolute
GHG
emissions
(tCO
2
e)
Change in
like-for-like
GHG
emissions
(tCO
2
e)
Change in
GHG
intensity
(tCO
2
e/m
2
)
Scope 1
Combustion of fuel and operation of facilities -21% -8% -21%
Scope 2
Electricity, heat, steam and cooling purchased for
own use -23% -15% -26%
Scope 1 and 2
Head office premises -51% -51% -51%
Total Scope 1 and 2 -23% N/A -23%
Scope 3
Business travel 23% N/A N/A
Occupier data (electricity and fuel consumption) TBC TBC TBC
Landlord water and treatment 17% 37% 17%
Landlord waste -18% -18% -18%
Total Scope 3
1
TBC TBC TBC
Total
TBC TBC TBC
1. Scope 3 occupier data collection figures are still incomplete at time of publication. This will be reported in
the Sustainability Data Performance Report in June.
Scan or click
here to read our
Waste
Statement
Water consumption
Water is a small part of our
total footprint. There was a
17% increase in landlord water
emissions over the year, which
was reportedly due to both
a general increase in office
use and a number of factors
at specific buildings, ranging
from power washing façades
and other refurbishment
works to issues relating to
meters and water tanks.
Waste
This year we published our
Waste Statement, setting out
our commitment to responsible
waste management at
both a corporate level and
across our properties.
We aim to minimise the
environmental impact of
waste generated through
the refurbishment, operation
and management of our
buildings while ensuring full
compliance with applicable
laws and regulations.
We continue to use building
refurbishments and our
sustainability action plans
to improve water efficiency
across the portfolio.
Waste management is
incorporated into our net
zero strategy. Our approach
follows the waste hierarchy
of reduce, reuse and recycle.
We actively promote recycling
initiatives and target zero
waste to landfill in landlord-
controlled areas. Wherever
possible, we incorporate
waste-related clauses into
our standard lease form to
encourage occupiers to avoid
sending waste to landfill.
We have again successfully
diverted 100% of waste
from landfill across property
management activities,
using either recycling
or heat recovery.
Of the waste collected in
the year, 77% was recycled
and 23% recovered.
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Sustainable Thinking continued
Methodology
We collect all our landlord-
controlled energy data via
automatic meter readings and
we report energy consumption
for 100% of our floor area.
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 use 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. 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
GHG Conversion Factors for
Company Reporting 2025.
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.
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 2025.
Year-on-year, we will continue
to update previously reported
figures if applicable to remove
estimates and ensure actual
data is captured and reported.
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.
Green lease clauses
Our standard green lease
clauses remain aligned
with the Better Buildings
Partnership’s guidance.
Over the year, we
completed 76 lettings, lease
renewals and regears.
Of these, 92% by rental value
included our green lease
clauses. Of the remainder,
5% related to car parking,
open storage land or
inclusive leases and 3% to
protected lease renewals.
Minimum Energy
Efficiency Standards
(MEES)
We continue to improve the
EPC profile of the portfolio;
on an ERV basis, 86% is now
rated EPC A–C, compared to
83% last year. Over the year 46
EPCs were reassessed, with an
average score improvement
equivalent to moving from
a C rating to a B rating.
Although timings are yet to be
confirmed, minimum standards
are expected to be raised to
enable the UK Government
to meet its 2050 net zero
emissions target. Currently 46%
of our portfolio is rated A–B.
Asset type Green building certification 2026
1
Office 41%
Industrial, Business Parks 22%
Industrial, Distribution Warehouse 29%
Hotel 0%
Leisure 0%
Retail High Street 0%
Retail Warehouse 0%
% of total portfolio 23%
1. By floor area.
Sustainable Thinking continued
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Social event for occupiers held at Farringdon Road, London
In 2025, we formalised our
Social Impact Policy which
sets out our approach to our
stakeholders, recognising
the importance of our
occupiers, employees and
the wider community, and
in tandem work with our
suppliers. This approach and
our governance framework
ensures we remain focused
on stakeholder engagement.
Occupiers
Occupier engagement
Occupier engagement is at
the centre of our business
model and is integrated into
our responsible approach
to asset management.
We support occupiers
by providing high quality
buildings and amenities and
being responsive to property
management issues. This
supports occupier retention
and our ability to add value
through asset management.
Our Picton Promise sets out our
five key commitments to our
occupiers: Action, Community,
Technology, Sustainability and
Support. These sit at the core
of our occupier engagement
strategy as we look to build
longstanding relationships.
This year we have continued
with the roll-out of our occupier
app which has been a positive
way for our office occupiers to
meet, providing a forum for
Social impact
Ongoing occupier, employee,
community and supplier
engagement programmes
Connected UN SDGs:
sharing ideas and promoting
their businesses within the
community. Additionally in
the year, we hosted a wide
variety of events and we
worked with our occupiers to
identify areas of collaboration
such as upgrading communal
areas and energy efficiency.
Next year we will continue
to enhance the occupier
app capability, including
sustainability-led data, as well
as introducing digital screens
in most of our multi-let offices
in order to further sustainability
awareness and engagement.
Occupier survey
The results of our annual
occupier survey showed
an increase in the number
of occupiers who would
recommend Picton as a landlord
to 93% (2025: 88%), supported by
increases in satisfaction across
communication, responsiveness
and service levels.
We continue to obtain valuable
feedback from these surveys
and actions are followed
up by our Head of Occupier
Services in partnership with
our property managers.
The fact that you
put on events for
occupiers is brilliant
and unexpected. You
get the local businesses
involved as well so
everybody wins!
Occupier
Farringdon Road, London
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Sustainable Thinking continued
Health and safety
Health and safety is central
to our business activities. We
are committed to making
our buildings a healthy, safe
and secure environment
for our occupiers and their
visitors, our employees,
contractors, and the public.
We aim to achieve high
standards through our
governance framework,
training and awareness and
risk mitigation. Our Health
and Safety Committee meets
every other month and reports
directly to the Executive
Committee, who deliver a
quarterly update to the Board.
During the year, we continued
our awareness and training
programme, including
asbestos training, and a review
of how new legislation, such
as Martyn’s Law, might apply
to some of the portfolio.
There were zero reportable
accidents, near misses or other
health and safety incidents.
99%
Compliant in all critical
and secondary health
and safety documentation
Employees
Our employees are at the
centre of delivering our
strategy with a nimble, and
experienced team. We have
a strong and open company
culture with shared values
co-created by our employees
which is aligned and focused
on all our stakeholders
and strategic pillars.
We continue to be committed
to building an inclusive
workplace where everyone
is treated with fairness and
respect. Our Diversity and
Inclusion Policy can be
found on our website.
This year, Helen Beck, one of
our Non-Executive Directors
designated as Director for
employee engagement, held
one-to-ones with employees.
This replaced the annual
employee engagement survey
and sought to provide a more
personal approach, recognising
the size of the team and in
light of the Strategic Review.
Our policies are set out in our
Employee Handbook which
includes a Whistleblowing
Policy, as well as details
on how we support and
engage with our employees
through the following:
– Wellbeing: we have a low
absentee rate and promote
wellbeing through policies
including flexible working
arrangements, family-friendly,
health and safety and special
leave policies. Comprehensive
private medical cover,
health assessments and
homeworking assessments
are also provided
–
Progression, training and
development: we hold annual
and mid-year reviews through
a web-based portal with all
employees. Training and
development is provided
through a mix of internal and
external resources and
logged. In addition, we
encourage committee
membership and have a study
leave policy and support
professional memberships to
bodies such as the RICS,
ICAEW, and the IPF
– Reward and recognition:
remuneration is aligned to
individual and corporate
performance, with all
employees eligible for
employee share schemes
– Recruitment and retention:
we have a low level of
turnover with an average
length of service of six years.
There are length of service
awards every five years,
granting employees an
additional five days of leave
after each five years of service
Jay Cable
Jay had been living with
cancer since 2023 and sadly
passed away on 28 March. He
dealt with his diagnosis with
unbelievable and inspirational
stoicism, as only he could.
Jay was truly a great individual.
He brought positivity, energy,
warmth and enthusiasm to
any situation. He was at ease
and respected universally from
the boardroom downwards.
He was a key team member
from the outset. He had been
with Picton since its IPO and
was instrumental in creating
the reputation we have today.
Sustainable Thinking continued
40%
Of our team
are women
1.1%
Absentee
rate
480
Training
hours
100%
Of staff
eligible for
employee
share
scheme
6
yrs
Average
length of
service
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+£20k
Fundraised for The Royal
Marsden Cancer Charity
13
Charities supported
>200
Suppliers engaged in the year
Community
Community engagement
We are committed to
maximising the social value
we deliver to our stakeholders,
communities, and wider
society. 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.
Engagement programme
Building
coverage
(assets)
Office 100%
Retail, High Street 100%
Retail, Warehouse 100%
Industrial, Business
Parks 100%
Industrial,
Distribution
Warehouse 100%
Hotel 100%
Charitable giving
Our charitable giving
policy aims to invest in our
communities at grassroots
level, to make a positive
difference to the local areas
in which we own property.
We support charitable
giving through our varied
charity partnerships and
matched giving initiatives.
– Charity partnerships: this
year we continued our
charity partnerships with
The Funding Network,
Future Youth Zone and
Youngwilders, providing
regular funding, volunteers
and event spaces where
required. We also continue
to support LandAid’s
Christmas appeal
– Employee matched giving:
as part of our 20-year
celebrations, the team
took on a special challenge;
a 30km Thames Path walk
from Maidenhead to Henley,
to raise funds for The Royal
Marsden Cancer Charity.
We raised over £10,000
and Picton matched a
further £10,000
In addition, our Chief Financial
Officer Saira Johnston ran the
Royal Parks Half Marathon
where Picton matched a
further £250, with a total
of £2,500 being raised.
– 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, we make a donation
to our charity partners,
Coram, for every response
received from our annual
occupier survey
Suppliers
We collaborate with our
supply chain and ensure that
our suppliers also operate
in an ethical way and share
our business principles
in observing relevant
laws and regulations.
Our Supplier Code of Conduct
sets out the principles and
standards that we expect
so we can work together to
achieve a responsible way of
sourcing labour, goods and
services. This year we have
carried out our annual Modern
Slavery review which includes
a review of our Supplier Code
of Conduct with key suppliers.
In addition, annual training has
been completed by employees.
It was only right that our
fundraising efforts this year were
to support The Royal Marsden
Cancer Charity. It marked a
particularly special time and event
whilst Jay Cable, much loved team
member, was undergoing treatment
under their care.
Michael Morris
Chief Executive
Scan or click here to read our
Modern Slavery Statement
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Governance
Further developing how ESG is integrated
within our governance structure and
embedding our ESG Governance Policy
Connected UN SDGs:
We set out a new ESG
Governance Policy in 2025
to ensure our governance
structure supports the
integration of ESG into all
elements of our business,
with the Board retaining
ultimate responsibility for
ESG strategy. We have
continued to embed this
during the year and focused
on practical implementation
across our portfolio
through our Responsibility
Committee and the Climate
Action Working Group.
We remain committed to
understanding industry
best practice, stakeholder
expectations and adopting
a targeted approach to
ESG workstreams. We
seek input from external
advisers, as appropriate, and
stakeholder engagement
with our shareholders,
occupiers, employees and
local communities to identify
and respond to ESG issues.
Our ESG approach ensures
clear and transparent
reporting through:
Our commitment
to the following:
Better Buildings Partnership
We continue to be a
signatory to the BBP
Climate Commitment and
adopt the BBP’s definition
of climate resilience. We
report our portfolio’s energy
data in the BBP Real Estate
Environmental Benchmark
and follow their guidance on
green lease clauses which
supports our data collection.
EPRA
This is the seventh year we
have been awarded EPRA Gold
in line with Sustainability Best
Practices Recommendations.
GRESB
We have been reporting
to GRESB since 2017. Our
score for 2025 improved to
82 and remained at three
green stars. We scored ahead
of the GRESB average in
each of the Environmental,
Social and Governance
categories, and overall.
Scan or click here to read our
ESG Governance Policy
92%
New leases containing
green clauses
EPRA gold
GRESB rating
Sustainable Thinking continued
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Our practices around
the following:
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.
We report this data in our
Sustainability Data Performance
Report and appoint a third
party adviser to independently
verify the data collection.
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.
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. A copy
of our Anti-Bribery Policy is
available on our website.
In addition, our Employee
Handbook sets out the
principles and processes
to support compliance
with the Bribery Act 2010
and ethical conduct as
well as steps to follow in
case of whistleblowing.
Our Employee Handbook
is available to all staff and is
included as part of the new
joiner induction process.
Scan or click here to read our
Anti-Bribery Policy
Scan or click here to read our
Sustainability Data
Performance Report
A commitment to
professional conduct
and ethical behaviour
underpins all that we
do, shaping the way we
act in the best interests
of our stakeholders.
Michael Morris
Chief Executive
For more information:
Managing Risks and Principal
Risks on pages 42 to 49
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Sustainable Thinking continued
Governance
Strategy
Risk management
Metrics and 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 outline our
overarching risk management
approach and disclosed
climate-related risks and
opportunities for the business,
which we have identified
in accordance with the
TCFD recommendations
and which comply 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
65 Governance
66 Strategy
70 Risk management
72 Metrics and targets
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Additional
Information
Financial
StatementsGovernance
Strategic
Report
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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 42
Board Committees
on page 88
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.
1.2 Management’s
role in assessing and
managing climate-
related risks and
opportunities
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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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 term (2030–2039) and long-term (>2040)
as well as assess their implications and the necessary actions to manage them. As it is now five years since this assessment was carried out we have considered
conducting a reassessment. However, given the timing of the Strategic Review it was decided to revisit this later in the year.
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 the 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.
This year we have committed to a new SBTi-aligned
net zero carbon target of 2045 for all emission Scopes
covered under the SBTi buildings criteria and other
Scope 3, 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.
TCFD Statement continued
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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.
– Potential effect on our ability to secure financial
capital, acquisition activities and asset values
Strategy continued
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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
TCFD Statement continued
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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 page 50
Net zero progress on
pages 54 to 58
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. We have created a comprehensive framework of policies and strategies that guide our
approach. 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 2045 aligns with the SBTi’s target-setting methodology, the BBP’s Net Zero Carbon Pathway Framework and the
UKGBC’s 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 sustainable 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.
Strategy continued
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TCFD Statement continued
Risk management
Recommendation Commentary
3.1 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. We have formalised an ESG Governance Policy, which sets out responsibilities for all elements of ESG including climate risk.
Climate change risk is recognised as a principal risk for our business. As a UK property owner, we consider flooding to be the most material climate-related
threat to our operations. This year we strengthened our assessment by conducting unit-level desktop flood analysis across the portfolio, giving us a more
detailed understanding of our exposure to this risk.
We found that on an ERV basis, 91% of the portfolio currently has a low or very low likelihood of surface water flooding, and 97% has a low or very low likelihood
of flooding from rivers or the sea on an annual basis. Where the data highlighted areas of elevated risk, we carried out further investigation and implemented
mitigation measures where feasible.
Looking ahead to longer term climate scenarios (between 2040 and 2060), 80% of the portfolio is projected to remain at low or very low risk from surface
water flooding, and 90% is at low or very low risk from river and coastal flooding.
The findings of this exercise will be incorporated into this year’s asset-level business plans.
TCFD Statement continued
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Recommendation Commentary
3.2 The
organisation’s
processes for
managing climate-
related risks
For more information
Net zero progress on
pages 54 to 58
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 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.
3.3 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 the 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.
Risk management continued
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TCFD Statement continued
Metrics and targets
Recommendation Commentary
4.1 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)
4.2 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 calculate and report our emissions in line with the GHG Protocol Corporate Accounting and Reporting Standard.
4.3 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 2045.
This year we set new SBTi-aligned whole-building in-use operational targets and targets for other scope 3 categories as defined by the SBTi.
We commit to reduce Scope 1, 2 and 3 in-use operational GHG emissions of owned and leased buildings by 96% per m
2
by 2045 from a 2024 baseline year.
Our near-term target is to reduce in-use operational GHG emissions of owned and leased buildings emissions by 73% per m
2
by 2035 from a 2024 baseline.
We commit to achieving net zero across all other Scope 3 categories by 2045. This requires an absolute reduction of 90% by 2045 from a 2024 baseline.
Our near-term target is to reduce these Scope 3 emissions by 63% by 2035 from a 2024 baseline.
To increase our accountability and culturally embed climate risk management throughout the organisation, there are remuneration-linked annual objectives
applicable to Executive Directors’ bonus opportunities for sustainability progress.
TCFD Statement continued
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Inside this section
74 Chair’s Introduction
76 Governance at a Glance
78 Board of Directors
80 Our Team
82 Leadership and Purpose
86 Section 172 Statement
88 Division of Responsibilities
89 Responsibilities of the Directors
90 Composition, Succession
and Evaluation
91 Nomination Committee
94 Audit, Risk and Internal Control
94 Audit and Risk Committee
98 Property Valuation Committee
100 Remuneration Report
116 Directors’ Report
Governance
Driving accountability, transparency
and responsible decision making
to support long-term value.
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Financial
StatementsGovernance
Strategic
Report
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Chair’s Introduction
Dear Shareholder – On behalf of the Board,
I am delighted to introduce our 2026
Corporate Governance Report.
The Board continues to operate with an
established and robust governance framework,
supporting promotion of the long-term
sustainable success of the business.
The year in review
Our focus this year has been to unlock value
for shareholders and we started the year with a
continuation of our share buyback programme,
followed by a further £34.5 million of an
office disposal.
We had considered recycling capital into higher
yielding new asset acquisitions, however we
concluded it was more appropriate to extend
the share buyback programme in Autumn 2025.
We have also continued to invest into our assets,
to future-proof them, reduce obsolescence, and
attract and retain occupiers. This in turn will
drive rental and value growth on new lettings
and other lease events and is evident in the
portfolio valuation metrics over the year.
With a number of key portfolio lease events and
macroeconomic headwinds it has been harder
to grow earnings this year and as such the Board
believes it is appropriate to maintain the current
dividend level until we deliver an improvement
in occupancy.
We have revised our net zero strategy in light of
our decarbonisation progress, and aim to reduce
our Scope 1 and 2 emissions to net zero by 2035,
whilst allowing more time to achieve an overall
net zero target by 2045, recognising some of the
challenges with occupier led emissions.
Set against a backdrop of continued consolidation
within the REIT sector, a focus on scale and
liquidity and embedded material discounts
to net asset value widespread across the sector,
in January of this year, we announced the launch
of a Strategic Review. Through this process we
aim to further unlock value for shareholders.
On 12 May 2026, a non-binding indicative
all-share offer (‘Proposed Offer’) from
LondonMetric Property Plc and Schroder Real
Estate Investment Trust Limited was announced.
This is subject to further due diligence and any
Formal Offer is subject to shareholder approval.
Further details will be communicated in
due course.
Throughout this process there has been
continued engagement with our shareholders
through either direct or online meetings and
webinars hosted through Investor Meet
Company. I would particularly like to thank
shareholders for their continued engagement
and constructive feedback received over the year.
Board composition and diversity
There have been no new appointments or
changes to the Board’s composition during the
year. However, in light of the Strategic Review
announced in January, the Board approved a
one-year extension to Mark Batten’s
appointment as a Non-Executive Director, with
effect from 1 October 2026, ensuring continuity
is maintained during this process.
The Board remains mindful of the FCA’s listing
requirements on gender and diversity and whilst
currently only two of the three requirements
are met, the Board will consider this for its
next appointment, which is expected to be
as Mark Batten steps down from the Board.
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Our stakeholders
The Board recognises that understanding the
views of our stakeholders is fundamental to our
long-term success and details of how we
engage are set out on pages 86 to 87.
During the year, I have continued to engage
with shareholders, alongside our Chief
Executive, Michael Morris, and our Chief
Financial Officer, Saira Johnston. We appreciate
the feedback from our shareholders, particularly
in respect of our approach to capital allocation
and commencing the Strategic Review.
We recognise we have a diverse range of
shareholders and have sought to get their input
to facilitate discussion at Board meetings and
ensure all views are taken into consideration.
Our occupier focused approach is embedded
within our purpose, values and business model
and in line with previous years, we carried
out occupier surveys for our multi-let offices
and selected industrial and retail buildings, at
the end of 2025. The Board has reviewed the
overall results, which were very pleasing, with
93% recommending Picton as a landlord. The
valuable feedback received will be used to
help shape next year’s engagement strategy.
Our employees are key stakeholders and
although we have a small team, I have been
impressed by all that has been achieved in
difficult circumstances.
Jay Cable
The Board and I would like to pay tribute to
Jay Cable, who sadly lost his battle with cancer
in March this year. Jay was involved with
the Company since its IPO and we would like
to acknowledge his significant contribution
to the success of the business.
Board performance review
Our Board performance review was carried out
internally this year and the Board has considered
the findings and recommendations for
improvement. The Board has concluded that
overall it was satisfied with its own performance
and that of the Board Committees which
continue to operate effectively.
Further details are provided in the Nomination
Committee Report
Annual General Meeting
Our Annual General Meeting was held in
July 2025 and I am pleased to report that
all resolutions were approved, with at least 93%
of votes in favour. I would like to thank our
shareholders for their continuing support.
Our forthcoming AGM will be held in
September 2026.
UK Corporate Governance Code
Picton is for the first time, subject to the 2024
UK Corporate Governance (the ‘Code’) for the
year ended 31 March 2026 and our Statement of
Compliance with the Code is set out within the
Directors’ Report on page 116. 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.
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 take this opportunity to thank my
fellow Board colleagues for their support over
what has been a busy year, and to the entire
Picton team for their hard work, commitment
and dedication over the year.
Francis Salway
Chair
11 June 2026
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Chair’s Introduction continued
Francis Salway
Mark Batten
0 1 2 3 4 5 6 7
9
8
Helen Beck
Richard Jones
50% 33%
Governance at a Glance
Focus areas for
2025/2026
– Shareholder value
– Capital allocation
– Continued earnings growth
– Board succession
Key priorities for
2026/2027
– Maximise shareholder value
– Strategic Review
– Earnings growth
– Board succession
Board tenure
Non-Executive Director average
tenure as at 31 March 2026
4.2
yrs
Board composition and experience
Tenure by Director
Demonstrating our skills
The skills matrix shows the level of expertise of our Board across a range of disciplines.
For more information about the
Board and its activities:
Board of Directors pages 78 to 79
Leadership and Purpose
pages 82 to 87
Board independence
as at 31 March 2026
Board gender balance
as at 31 March 2026
Independent 3
Non-independent 2
Chair 1
Male 4
Female 2
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 and Committee attendance
as at 31 March 2026
100%
AGM votes in favour of
all resolutions July 2025
93%
Total dividend for 2026
3.8p
Director changes
There were no Director changes during the year.
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Information
Financial
StatementsGovernance
Strategic
Report
Picton Property Income Limited
Annual Report 202676
Compliance with the UK Corporate
Governance Code 2024 (the ‘ Code’)
The Company complied with the relevant provisions
set out in the 2024 version of the Code, which applied
throughout the financial year ended 31 March 2026.
Board leadership and Company purpose
Effective and entrepreneurial Board
promoting long-term sustainable
success of the Company
74 to 75
Alignment of our purpose, values
and strategy with our culture
82
Governance framework and
decision making
88
Effective stakeholder engagement 86 to 87
Alignment of workforce policies and
practices with our values
82
Division of responsibilities
Leadership of an effective Board 88
Division of responsibilities and
Directors’ independence
89
External appointments and conflicts 83, 91
Effective and efficient functioning
Board and Board resources
83 to 85
Composition, succession and evaluation
Board appointment process
and succession planning
91 to 93
Directors’ skills, experience
and knowledge
78 to 79
Annual Board performance review 92 to 93
Audit, risk and internal control
External and internal audit
effectiveness and integrity
of financial reporting
94 to 97
Fair, balanced and
understandable assessment
of the Company’s position
94 to 97
Effectiveness of risk management
and internal control framework
94, 96
Remuneration
Remuneration policies and practices
aligned to purpose and values,
supporting our long-term strategy
100 to 106
Remuneration Policy 105 to 106
Exercise of independent judgement
in respect of 2025/2026
performance outcomes
107 to 115
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.
Areas for enhancement
Progress made during 2025
Provision or Principle Enhancements during 2025
Composition, succession and evaluation
17. Ensure plans are in place
for orderly succession
for both the Board
and senior management
positions
The Board considered succession focusing on
both Board positions extending Mark Batten’s
appointment as well as senior management
Audit, risk and internal control
28. Robust assessment
of the Company’s
emerging and
principal risks
The Board has added cyber as a principal risk
and identified Artificial Intelligence as an
emerging risk
Focus areas for 2026
Provision or Principle Enhancements during 2026
Composition, succession and evaluation
K. The Board and its
committees should
have a combination
of skills, experience
and knowledge
The Board will review the skills and
experience requirements as part
of succession planning for the next
Non-Executive Director appointment
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Financial
StatementsGovernance
Strategic
Report
Picton Property Income Limited
Annual Report 202677
Governance at a Glance continued
Board of Directors
Committee key
A
Audit and Risk Committee
N
Nomination Committee
P
Property Valuation Committee
R
Remuneration Committee
Committee Chair
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.
We have the relevant
skills and experience
for future growth.
Non-Executive Chair
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
– Non-Executive Director of Cadogan
Group Limited
Principal external commitments
– Non-Executive Director of Watkin Jones plc
Non-Executive Senior
Independent Director
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
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 and
Non-Executive Director and Chair of Audit
Committee, 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
Non-Executive Director
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 Services
Remuneration Practice
– Partner at Kepler Associates Limited
– 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 St James’s Place
– Non-Executive Director, Senior Independent
Director and Chair of the Remuneration
Committee of Funding Circle plc
– Non-Executive Director of Hampshire
Trust Bank
– Independent member of the British Olympic
Association’s Remuneration Committee
Francis Salway
N
P
R
Mark Batten
A
N
P
R
Helen Beck
A
N
P
R
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Financial
Statements
Additional
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Non-Executive Director
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 Secure
Income Property Unit Trust
– Investment Committee, Henley Secure
Income Property Unit Trust II
– Special Advisor, Clearbell UK Strategic Trust
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
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
– Governor, University of Bedfordshire
For more information about the
Board and its activities:
Leadership and Purpose page 82
Richard Jones
A
N
P
R
Michael Morris Saira Johnston
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Board of Directors continued
Committee key
A
Audit and Risk Committee
N
Nomination Committee
P
Property Valuation Committee
R
Remuneration Committee
Committee Chair
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.
Saira Johnston
Chief Financial Officer
Lucinda Christopherson
Executive Assistant to Chief
Executive and Office Manager
James Forman
Director of Accounting
Mark Alder
Head of Occupier Services
Michael Morris
Chief Executive
Saira is a Chartered Accountant with over
20 years of experience working in the real
estate sector in a range of financial and
operational roles. Saira is responsible for the
financial strategy and reporting for the Group
and is Chair of the Responsibility Committee
and a member of the Transaction and
Finance Committee.
Lucinda is the Executive Assistant to the
Chief Executive, Michael Morris, and also
has responsibility for the day-to-day
management of the office and oversees
the administrative aspects of the Company.
Lucinda is a member of the Health and
Safety Committee.
James is a Certified Accountant 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.
Mark 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 Deputy Chair of the Health
and Safety Committee and is a member of
the Responsibility Committee.
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.
Tim Hamlin
Head of Asset Management
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. Tim is a member of the
Transaction and Finance Committee, the
Responsibility Committee and is Chair of the
Health and Safety Committee.
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StatementsGovernance
Strategic
Report
Picton Property Income Limited
Annual Report 202680
Louisa McAleenan
Senior Analyst – Research,
Strategy and Sustainability
Kathy Thompson
Company Secretary
Andy Lynch
Head of Building Surveying
Lucy Stearman
Assistant Accountant
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. Louisa is a member of the
Responsibility Committee and the Climate
Action Working Group.
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.
Andy is a Chartered Surveyor with
over 15 years of experience within the
commercial real estate sector. Andy 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.
Lucy has over ten years of experience within
financial services and assists with the
accounting and financial reporting for
the Group.
Tom Harrison
Asset Manager
Tom is a Chartered Surveyor with over
five years of post-qualification experience.
Tom is responsible for the comprehensive
asset management of our portfolio, including
lease transactions and overseeing capital
expenditure projects.
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StatementsGovernance
Strategic
Report
Picton Property Income Limited
Annual Report 202681
Our team continued
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 values
Our values were co-created by the team and
are behaviours that 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.
For more information about the
Board and its activities:
Board of Directors pages 78 to 79
Division of Responsibilities page 88
How the Board
manages, monitors
and embeds culture
The Board recognises its role
in shaping the Company’s
culture, leading by example
through its own behaviour
and considering this as part
of its annual performance
review process.
The Board acknowledges
the importance of its
people to the long-term
success of the business
and regularly reviews how
culture remains embedded
within the business through
a variety of ways. During the
year, this has included:
Management reporting –
the Board receives regular
updates on employee-related
matters including compliance
training, response to internal
audit review findings,
compliance with core policies
and responsiveness to new
operational initiatives.
Picton has a small team
of 11 employees, with
minimal staff turnover
rates and sickness levels.
Performance and reward –
the Board receives feedback
from management on the
interim and end-of-year
performance reviews carried
out for individual team
members. In addition to base
salary, employees are rewarded
through participation in the
employee share plans, which
supports alignment between
the Company’s performance
and that of employees.
Direct engagement – the
Directors regularly meet with
the whole team through
informal lunchtime sessions
as part of the quarterly Board
meeting programme. This
has allowed the Directors to
provide updates on Company
strategy and to respond to
related questions from the
team. This regular contact
supports the strong and
open culture and shared
values across the Company.
Employee engagement
In place of our annual
employee engagement
survey, this year, Helen Beck,
our designated Director for
employee engagement,
held individual meetings
with members of the team
to address any questions or
concerns personally. This
approach was considered
more appropriate, recognising
the team’s size and in light
of the Strategic Review.
The Board has considered
a summary of the feedback
provided by Helen.
More detail is provided in
the Sustainable Thinking
section on page 60.
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 schedule of reserved
matters was reviewed by
the Board during the year
and updated to ensure
it continued to remain
appropriate to the business.
The Board collectively has 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 78 and 79
and illustrated in the skills
matrix on page 76.
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StatementsGovernance
Strategic
Report
Picton Property Income Limited
Annual Report 202682
Board meetings
The Board has streamlined its
regular meetings schedule,
with four quarterly meetings
and additional meetings
to cover approval of annual
policies, the Annual Report
and half-year results.
Board education sessions
are included in the meeting
schedule, which comprise a
mix of internal and externally
led sessions with Board
members providing input
on areas to be covered.
The Chair also met with the
Non-Executive Directors
without the Executive
Directors present during
the year.
Strategy day
This year’s strategy day was
held off-site and included
discussion of progress
against our 2026 objectives,
shareholder feedback
and areas of focus for the
Company’s strategy in light
of the Strategic Review. The
day was structured with input
from external advisers.
Attendance at Board and Committee meetings
The scheduled Board and Committee meetings for the year are listed below. Papers are circulated on a timely basis
to ensure that Directors have sufficient time to review and consider the matters proposed for discussion.
Board members
Date appointed
Board
Audit and Risk
Remuneration
Property Valuation
Nomination
Francis Salway 01.02.2025 7/7 – 5/5 4/4 2/2
Mark Batten 01.10.2017 7/7 3/3 5/5 4/4 2/2
Helen Beck 01.08.2024 7/7 3/3 5/5 4/4 2/2
Saira Johnston 01.04.2024 7/7 – – – –
Richard Jones 01.09.2020 7/7 3/3 5/5 4/4 2/2
Michael Morris 01.10.2015 7/7 – – – –
Total number of meetings 7 3 5 4 2
There was 100% attendance by all Board Directors throughout the year.
Ad hoc Board and Committee meetings
Additional meetings were convened as necessary to deal with other matters including the Strategic Review.
Board Committees
The Board has established
four Committees. These are
the Audit and Risk, Property
Valuation, Nomination and
Remuneration Committees
and their membership is
comprised solely of Non-
Executive Directors. Each
Committee operates
within clearly defined
terms of reference which
are reviewed annually and
these are available on the
Company’s website.
Conflicts of interest
Directors are required to notify
the Company of any potential
conflicts of interest and any
conflicts are reviewed by
the Board at each meeting.
During the year, one potential
conflict of interest was
identified and an appropriate
safeguarding measure put in
place; however, the conflict
did not ultimately materialise.
The process for obtaining
Board approval for
external appointments is
included in the Nomination
Committee Report.
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Leadership and Purpose continued
Leadership and Purpose continued
Board Activities
Strategic
Activity
– Strategic initiatives seeking opportunities for scale and
maximising value for shareholders
– Review of progress against objectives
– Portfolio strategy and activity including output of
business plans and sector mix, in addition to planning
applications and asset disposals
– Capital allocation and priorities
– Equity capital markets landscape
Outcomes
– Annual strategy review
– Approved disposal of key office asset,
Stanford Building
– Approved extensions of share buyback programme
in April and May 2025; and commencement of new
programme in September 2025
– Commencement of the Strategic Review
Impacted stakeholders
Financial reporting
and performance
Activity
– Portfolio and financial updates and forecasts
– Macroeconomic updates from external advisers
– Quarterly management accounts
– Annual operating budget
– Dividend recommendations
– Annual Report and half-year results
– Going Concern and Viability Statement
– Annual debt review
Outcomes
– Approved operating budget for the financial year
– Approved quarterly dividends and related Stock
Exchange announcements
– Approved the Annual Report and half-year results
and related Stock Exchange announcements
Impacted stakeholders
Operational
Activity
– Property valuations and reports from external valuer
– Operational performance
– Operational matters including updates on HR and IT
– Health and safety matters, fire safety and
physical security
Outcomes
– Acceptance of quarterly independent valuations
– Approved annual Health and Safety Policy Statement
Impacted stakeholders
Risk management
and internal controls
Activity
– Risk Management Policy, including a review of the risk
matrix and appetite
– Risk trends for principal and emerging risks
– Internal audit review of findings and progress
– Review of property manager’s internal controls report
– Evaluation of external auditor
– Review of requirements under the new Corporate
Governance Code
Outcomes
– Approved risk matrix, appetite and principal and
emerging risks
– Agreed deferral of internal audit plan in view of
Strategic Review
– Recommended to shareholders the reappointment
of the external auditor
Impacted stakeholders
A wide range of
matters were
considered by the
Board and key
Board activities and
approvals over the
year are set out here.
Our stakeholders
Our employees
Our shareholders
Local communities and charities
Our suppliers
Our occupiers
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Stakeholder
engagement
Activity
– Shareholder register analysis
– Shareholder feedback following annual and
half-year results
– Launch of Strategic Review
– Market update from Company’s brokers
– AGM planning
– Results of the occupier engagement survey
Outcomes
– Approved AGM Notice
– Approved commencement of Strategic Review
Impacted stakeholders
Governance
Activity
– Board Committee Chair Reports to the Board
– Company Secretary Report and governance updates
– Internal Board and Committee performance
recommendations
– Review of NED tenure and reappointment
– Schedule of reserved matters for the Board
– Board Committees’ terms of reference
– Modern Slavery Statement
– Annual review of policies
Outcomes
– Approved extension of NED appointment by one
year, post nine-year tenure
– Approved updated schedule of reserved matters for
the Board
– Approved Board Committees’ terms of reference,
including incorporating the FRC’s External Audit:
Minimum Standard
– Approved Modern Slavery Statement
Impacted stakeholders
Employees, culture
and values
Activity
– Directors’ Remuneration Report
– Executive Directors’ fixed and variable remuneration
– Employees’ fixed and variable remuneration
– Employee engagement – outcomes and actions
– Board and senior management succession planning
– Diversity and Inclusion policy
Outcomes
– Recommended to shareholders the Directors’
Remuneration Report
– Approved fixed and variable remuneration for
Executive Directors and other employees
– Annual approval of the Diversity and Inclusion Policy
Impacted stakeholders
Sustainability
Activity
– ESG strategy and policy framework
– Sustainability priorities
– Net zero strategy and target-setting aligned to SBTi
near-term and net zero targets
– Capital expenditure to support continuing
decarbonisation of assets
– Portfolio EPC trends
Outcomes
– Published net zero strategy
– Approved capital projects at four assets: Bristol,
Colchester, Manchester and Rushden
Impacted stakeholders
Consideration of
stakeholder engagement
is on pages 10 to 11 and
Section 172 Statement is
on pages 86 to 87
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Leadership and Purpose continued
Board Activities continued
Leadership and Purpose continued
Section 172 Statement
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 here.
93%
2025: 88%
Of occupiers
would
recommend
us as a
landlord
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,
the details of which are
reported back to the Board.
In addition, our advisers
obtain feedback and insights
following shareholder
meetings. There are also
online investor presentations
arranged following our Annual
General Meeting and after the
release of our results, which
provide an opportunity for
investors to raise questions.
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.
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
Executive Committee which,
with the team, is close to the
ongoing communication with
occupiers. This input supports
proposals to the Board on
material lease transactions,
such as refurbishment projects.
Our employees
Helen Beck, one of our
Non-Executive Directors, has
responsibility for employee
engagement.
The Board decided that in
view of the Strategic Review
and the size of the team, it
was preferable to engage
directly with team members
through individual meetings,
instead of conducting an
employee engagement survey.
The Board has also engaged
with the team informally over
lunch when the quarterly
Board meetings were held at
Stanford Building.
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
Responsibility Committee,
which is chaired by the Chief
Financial Officer, oversees
sustainability initiatives.
The Board reviews progress on
our key sustainability priorities
as part of the quarterly
reporting cycle. In addition, the
Board reviewed our net zero
carbon pathway commitment
and target setting in more
depth at this year’s Board
strategy day.
Suppliers
The Board has approved an
ESG framework which includes
a Supplier Code of Conduct.
This sets out principles and
standards that we expect so
we can work together with
our supply chain to achieve a
responsible way of sourcing
labour, goods and services.
The Board delegates day-
to-day implementation to
the Executive Committee
and reviews the Modern
Slavery Statement annually.
Considering
stakeholders in key
Board decision making
The table overleaf 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.
As the Company is registered in
Guernsey, the UK Companies Act
2006 does not apply. However, in
accordance with the UK Corporate
Governance Code 2024 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.
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Strategic focus areas Actions and outcomes
Portfolio Performance
Sale of Stanford Building
The Board approved the sale of Stanford Building, our largest office asset by value, in line with our strategy of reducing exposure to the office sector and
recycling capital from lower yielding assets. The sale completed in September 2025, and the proceeds were deployed into our share buyback programme
and investment opportunities, as the Board continues seeking to maximise value for shareholders.
Investment into the portfolio
The Board is responsible for approving capital expenditure above £0.75 million and, during the year, there has been significant investment into our portfolio.
The Board approved refurbishing and upgrading works at Tower Wharf, Bristol and Metro, Manchester properties, achieving full decarbonisation as a result,
in addition to refurbishing Colchester Business Park and Rushden. These investments are aimed at enhancing space to retain and attract occupiers, improve
sustainability credentials and grow income for existing shareholders.
Operational Excellence
Continuation of share
buyback programme
The Board continued to review its capital priorities and the optimal use of surplus disposal proceeds. In assessing the options, the Board considered
shareholder feedback and risk-adjusted returns. Accordingly, the Board authorised extensions to the programme in April and May, with increases of
£2.5 million and £5.0 million, respectively, pursuant to shareholder approval at the July 2024 AGM. Additionally, in September, the Board approved a separate
programme for £12.5 million under the authority granted at the July 2025 AGM; this programme was suspended on 13 January 2026 following the
announcement of the Strategic Review.
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 May 2025, the Board approved
a 2.7% increase in the dividend to 0.95 pence per share, which has been maintained throughout the year.
Acting Responsibly
Shareholder value
The Board reviews its principal risks throughout the year, including the share price discount and ability to attract capital. On 13 January 2026, the Board
approved the commencement of a Strategic Review. This will enable the Company to explore more options available to maximise value for shareholders.
Net zero strategy and targets
The Board received an update on progress against sustainability priorities and noted the recent work on target-setting, an updated net zero strategy and net
zero action plan. These steps are key components of our Acting Responsibly strategic priority and delivering on our net zero carbon pathway commitment.
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Leadership and Purpose continued
Section 172 Statement continued
Division of Responsibilities
Board Committees
Nomination:
Chair: Francis Salway
Comprises:
4 Non-Executive Directors
Read more on
pages 91 to 93
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
Audit and Risk:
Chair: Mark Batten
Comprises:
3 Non-Executive Directors
Read more on
pages 94 to 97
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 system
of internal controls
– Agreeing the internal audit plan and reviewing internal
audit reports
– Reviewing the relationship with the external auditor and
evaluating their performance
– Ensuring compliance with the UK Corporate
Governance Code
Property Valuation:
Chair: Richard Jones
Comprises:
4 Non-Executive Directors
Read more on
pages 98 to 99
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
Remuneration:
Chair: Helen Beck
Comprises:
4 Non-Executive Directors
Read more on
pages 100 to 115
Responsibilities:
– Determining the 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
Management Committees
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 the risk
management framework and system of
internal controls
– Determining employee remuneration and
overseeing career development
– Overseeing the work of the Health and
Safety Committee
Transaction and
Finance Committee:
Chair: Michael Morris
Comprises:
2 Executive Directors and
senior management
Responsibilities:
– Reviewing and
recommending relevant
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 ESG strategy
– Overseeing the work of our
sustainability advisers
– Overseeing the Climate Action
Working Group and receiving
updates on environmental
matters
– Monitoring stakeholder
engagement
– 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
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 the 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
Read more on page 89
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Financial
StatementsGovernance
Strategic
Report
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Annual Report 202688
Responsibilities of the Directors
The roles and principal
responsibilities of each of
the Directors are set out here.
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.
Chair
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 the
Board is informed of their views
– Fosters productive relationships between the
Non-Executive and the Executive Directors
– Responsible for governance
Chief Executive
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
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
Non-Executive Directors
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 controls and risk
management framework and the integrity
of financial information
– Determine the Remuneration Policy for the
Group and approve performance targets in line
with strategy
Senior Independent Director
Mark Batten
– Provides a sounding board for the Chair and is 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
Executive Director
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 controls and risk
management framework to the Audit and Risk
Committee and the Board
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Composition, Succession and Evaluation
These charts set out the
Board’s composition, tenure
and diversity characteristics
as at 31 March 2026.
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 2026 the Board comprised 50%
independent Non-Executive Directors,
excluding the Chair.
The biographies of the Directors can be
found on pages 78 to 79, which set out their
skills and experience, and their membership
of each of the Committees
Board composition and diversity
Function AgeGender 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 1
1
50%
Mixed British Asian 1 17% 1 1 50%
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 1
1
50%
Women 2 33% 1 1 50%
1. Jay Cable, Senior Director and Head of Asset Management was a member of the Executive Committee until he passed away on 28 March 2026.
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The Committee is responsible for reviewing
the composition of the Board to ensure it
maintains an appropriate balance of skills,
knowledge, experience and diversity, to fulfil
its duties and provide effective leadership.
It oversees the selection and nomination
of new Board members, ensuring that
appointments are made through a formal,
rigorous, and transparent process, and that
robust succession plans are in place for both
the Board and senior management. The
Committee also considers the outcomes of
the Board’s annual performance review, with
particular attention to feedback relating to
Board composition and succession planning.
The Committee also makes recommendations
to the Board regarding the membership of the
Audit and Risk, Nomination, Property Valuation
and Remuneration Committees, after
considering each Director’s time commitments
and relevant experience.
Terms of reference
The Committee’s responsibilities are set out in
its terms of reference and include the following:
– Reviewing and making recommendations
on Board composition and size;
–
Considering and advising on succession
planning for the Board and senior management;
– Identifying and nominating suitable
candidates to fill Board vacancies as they arise;
–
Reviewing the results of the Board performance
review on composition and succession;
– Reviewing time commitments and
independence criteria for Directors; and
– Recommending appointments for
membership to Board Committees.
Activity
The Committee met three times during the year
ended 31 March 2026, which included the two
scheduled meetings and one ad hoc meeting.
The Committee focused on routine matters as
there were no new appointments or changes
to the Board’s composition.
This included reviewing the performance
and constitution of the Committee and its
terms of reference. A short questionnaire was
completed by Committee members on its
performance throughout the year, with the
Committee concluding that it continued to
operate effectively.
The Committee has reviewed both existing and
new external appointments held by current
Directors to ensure that the time commitments
associated with these roles did not impact
their continued ability to discharge their duties
effectively; and to confirm that no Director
is overboarded or falls short of the required
independence requirements. The Committee
concluded that the Non-Executive Directors
continued to have sufficient time availability,
as demonstrated by their attendance at
the significant number of additional Board
meetings arranged during the year to
consider the Company’s strategy. The Non-
Executive Directors also continued to meet the
independence criteria set out in the Code.
The Committee also considered the Board
and senior management succession planning
arrangements as part of its remit to oversee
the development of a diverse and sustainable
pipeline for succession. In doing so, it considered
the skills and expertise needed for the Board
in the future. As part of its annual review of
longer term succession plans, the Committee
reviewed the Board skills matrix (see page 76)
to assess how the Board’s capabilities are
Focus areas for 2025/2026
– Succession planning
– Annual Board
performance review
– Directors’ skills,
experience and
knowledge
Members Attendance
Francis Salway (Chair) 2/2
Mark Batten 2/2
Helen Beck 2/2
Richard Jones 2/2
Nomination Committee
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Composition, Succession and Evaluation continued
Composition, Succession and Evaluation continued
evolving and to identify any areas where further
developments or recruitment may be needed.
The Committee discussed succession planning
for Mark Batten, whose tenure is due to
conclude at the end of September 2026, as
noted in last year’s Annual Report. In light of
the Strategic Review announced in January
2026, the Committee agreed that continuity
on the Board would be beneficial during this
period. Accordingly, the Committee agreed
to invite Mark Batten to remain on the Board
and approved a one-year extension to his
appointment as a Non-Executive Director,
Chair of the Audit and Risk Committee
and as the Senior Independent Director,
with effect from 1 October 2026.
The Committee also oversaw the actions taken
in response to the recommendations from the
internal Board performance review carried out
at the end of 2024 and agreed the actions to be
taken forward in response to the 2026 internal
performance review. See pages 92 to 93 for
further detail.
Senior management succession
In 2025 and early 2026, the Board considered
succession for the wider team, and in particular
for the Asset Management team. In early 2025,
a new asset manager was appointed to provide
additional resource to the team, whilst Jay Cable
underwent cancer treatment. In addition to
the guidance and training provided by Jay to
our Director of Asset Management over many
years, more formal professional and personal
development training has been provided,
leading to Tim Hamlin’s promotion to Head of
Asset Management with effect from May 2026.
Induction
A comprehensive induction programme
is provided for all new Directors, which
is tailored to reflect their individual
background and experience. The process
is overseen by the Chair and supported
by the Company Secretary running
throughout the first year of appointment,
with regular progress reviews. I completed
my induction programme during 2025.
Diversity and inclusion
All Directors remain committed to having a
Board which is diverse in every respect.
Since my appointment on 1 February 2025, the
Board no longer meets all three of the FCA’s
gender and diversity listing requirements. The
Board remains mindful of these requirements
and will take them into account when
considering the next appointment, which is
expected to arise as Mark Batten steps down.
By way of background, prior to my appointment,
the last three Board appointments were female.
The Company recognises that a diverse team is
essential for our long-term business success. We
value the unique contribution made by each
individual and remain committed to treating all
employees fairly and with respect.
Although we are a small team, equity, diversity
and inclusion remain key considerations in
our recruitment processes. We work closely
with our recruitment partners to ensure these
principles are embedded in their candidate
recommendations, whilst each candidate is then
assessed on merit having regard to the right
balance of skills, experience and knowledge.
The Committee
considered succession
and the Board’s skills,
knowledge and
experience.
Francis Salway
Chair of the Nomination
Committee
Board performance review
In accordance with the requirements of
the Corporate Governance Code, the Board
conducts an annual review of its own
performance and effectiveness and that
of its Committees.
At the end of 2024 an internal review was
undertaken through a detailed questionnaire,
prepared by the Company Secretary in
conjunction with the Chair.
The table overleaf sets out actions identified
following the review together with the progress
during the year.
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Progress against actions identified in the
2024/2025 performance review
Action Progress during 2025/2026
1. To revert to a quarterly
reporting cycle to streamline
processes and facilitate
debate and decision making
The Board adopted a quarterly reporting cycle.
In addition, specific, shorter Board meetings
were held to approve the half-year and Annual
Results, and a strategy day was scheduled in
March to cover strategy and objectives. This
has supported a streamline of our Board
reporting processes.
2. To refine our Board
reporting templates
A new quarterly reporting pack has been
developed to improve efficiency and the quality
of information provided to the Board.
3. To introduce a thematic
deep dive session at
Board meetings
The Board has received presentations on a
range of topics during the year including:
– The impact of tariffs (internal)
– A deep dive on asset business plans and
environmental initiatives (internal)
– Office sector review (internal)
– The impact of AI on the real estate
(and office) sector (external)
– Key Takeover Code provisions briefing
(external)
– Macroeconomic and property market
backdrop (external)
4. To include discussion of
investor feedback and
reflect on share price
discount at the Board
strategy meeting
The Board has considered investor feedback
and reviewed share price performance at each
of its quarterly meetings during the year.
2025/2026 performance review
For this financial year, the Committee made a
decision to conduct an internal rather than an
external review. The Committee felt that this
approach was more appropriate given Board
changes in the prior year and the Strategic
Review announcement. To facilitate the internal
review, Board members engaged in a workshop
session during the March Board strategy
meeting, where consideration was given to a
number of structured questions along with a
discussion on themes for improvement.
The results of the workshop were discussed and
the Board agreed to take forward the following
actions in 2026/2027.
– To coordinate at least one Board meeting
per year to be based at or near one of the
Company’s property assets, to facilitate site
visits by the Board
– To streamline governance reporting
including more focus on forward-looking
discussion papers to support long-term
scenario planning
– To review the adviser panel and ensure
the current advisers are appropriate for the
size of the Picton team, and the advice and
support provided
For each of the Board Committees, a short
questionnaire was completed and the results
were discussed at the workshop. There were
some minor improvement areas and it was
agreed these would be considered and
addressed as appropriate over the course
of the year.
Overall, the internal review concluded that
the Board, its Committees and the individual
Directors continue to operate very effectively.
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 ten years.
As mentioned earlier, whilst Mark Batten’s
nine-year tenure on the Board will end on
30 September 2026, the Committee
recommended a one-year extension to his
appointment to 30 September 2027, which was
approved by the Board. This will ensure there is
continuity on the Board whilst the Company
undertakes its Strategic Review.
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 at the Annual General
Meeting in September 2026.
Francis Salway
Chair of the Nomination Committee
11 June 2026
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Composition, Succession and Evaluation continued
Focus areas for 2025/2026
– Annual and Interim
Report
– Implementation of the
2024 UK Corporate
Governance Code and
Minimum Audit
Standard
– Internal audit review
and findings
– Risk Management
Policy, and principal and
emerging risks review
– External auditor
evaluation
Members Attendance
Mark Batten (Chair) 3/3
Helen Beck 3/3
Richard Jones 3/3
Meetings of the Audit and Risk Committee are
attended by the Chair, Chief Executive and
Chief Financial Officer, and external auditor
and internal auditor. The external auditor is given
the opportunity to discuss matters without
management present.
Terms of reference
The Committee’s terms of reference set out
its responsibilities which include consideration
of the following:
– 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;
– Ensuring compliance with the FRC’s
Minimum Audit Standard;
– The Group’s relationship with the
external auditor, including effectiveness
and independence;
– Internal audit and assurance services,
including review of reports and assessment
of control weaknesses; and
– Reporting responsibilities.
Audit and Risk Committee
Audit, Risk and Internal Control
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.
Audit and Risk Committee
The Audit and Risk Committee Report
describes the Committee’s activities in
discharging its responsibilities during
the year.
Further details are provided in the Audit
and Risk Committee Report
Property Valuation Committee
The Property Valuation Committee has
oversight of the independent valuer and
valuation process and recommends the
quarterly valuations to the Board following
its review of the external valuer’s
methodology and assumptions.
Further details are provided in the Property
Valuation Committee Report on page 98
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.
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Activity
The Audit and Risk Committee met three times
during the year ended 31 March 2026 and
considered the following routine matters:
– Draft Annual and Interim Reports for the year
ending 31 March 2026 for 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 external 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 Audit Limited;
– Internal audit reports, findings and
recommendations;
– The effectiveness of internal controls and
risk management;
– Stock Exchange announcements for the
annual and half-year results and quarterly
dividends;
– Corporate Governance Code and Minimum
Audit Standard compliance;
– Economic Crime and Corporate
Transparency Act 2023 and failure to prevent
fraud compliance;
– Impact of Strategic Review on financial
reporting; and
– Committee effectiveness.
Financial reporting and
significant reporting matters
The Committee reviews all financial information
published in the annual and half-year financial
statements including the accounting policies
adopted by the Group, the presentation and
disclosure of the financial information and the
key judgements applied 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 2026 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. Following its review, the
Committee was satisfied that these
requirements had been met.
Key areas of judgement
Valuation of investment properties
The principal area of judgement by the
Committee in reviewing the financial
statements is the valuation of the Group’s
investment properties.
The valuations are performed quarterly by
the external valuer and are overseen by the
Property Valuation Committee. These are a key
component of both the annual and half-year
financial statements and are inherently
subjective, requiring significant judgement.
Members of the Property Valuation Committee,
together with members of the Picton team,
meet with the external valuer each quarter
to review the valuations and underlying
assumptions, including those applied in the
year-end valuation process.
The Chair of the Property Valuation Committee
reported to the Audit and Risk Committee at its
meeting on 27 April 2026 and confirmed that
the following matters had been considered in
discussions with the external valuer:
– Current property market conditions and
prevailing trends;
– Quarter-on-quarter changes focusing
on movements greater than 5%;
– Impact of break notices and capital
expenditure on the valuation;
– Property portfolio yields;
– Letting activity and vacancies;
– 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
underpinning the valuation. The Committee
assessed the appropriateness of these
assumptions in light of current market trends
and conditions and examined valuation
movements compared with previous quarters.
Following its review, the Committee concluded
that the valuation was appropriate for inclusion
in the financial statements.
The external auditor presented its findings to
the Committee and reported that there were
no areas of concern or difficulties in performing
its audit procedures. In particular, no issues
were identified regarding management’s
assumptions or judgements in preparing
the financial statements, including in relation
to the key judgement area, valuation of
investment properties.
The Committee
is satisfied that the
2026 Annual Report
is fair, balanced and
understandable.
Mark Batten
Chair of the Audit and
Risk Committee
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Audit, Risk and Internal Control continued
Strategic Review
On 12 May 2026, a non-binding indicative all-share
offer (‘Proposed Offer’) from LondonMetric
Property Plc and Schroder Real Estate
Investment Trust Limited was announced.
An emphasis of matter referencing the non-binding
offer has been included in the auditor’s report. Their
opinion is not modified in respect of this matter.
There were no other key areas of judgement
which the Audit and Risk Committee identified
in conjunction with the external auditor.
Other key areas of judgement
Climate change is not considered a key audit
matter by our external auditor. Please refer to
our climate related disclosures on pages 64 to 72
for further information on climate change.
Fair, balanced and understandable
The Committee is satisfied that the 2026 Annual
Report is fair, balanced and understandable and
includes the necessary information as set out
here, and it has confirmed this to the Board.
Risk management
The Board has ultimate responsibility for risk
management and internal controls within the
Company and adopts a structured approach to
consider these. The Board reviews the Risk
Management Policy at least annually to ensure
it aligns with the Company’s strategic priorities.
The Committee is responsible for overseeing the
development and implementation of the Risk
Management Policy including a review of the
principal and emerging risks alongside risk scoring,
control effectiveness and risk appetite. The
Committee reports to the Board on these matters.
During the year, the Committee reviewed its
Risk Management Policy and confirmed that
there were no changes required.
The Risk Management Policy is intended to:
– Identify principal risks that may significantly
affect strategic goals and objectives;
– Define risk appetite and parameters for risks;
– Embed a risk culture which underpins the
evaluation and identification of risks and
protects shareholder value; and
– Meet legal and regulatory requirements.
The Committee also reviewed the updated risk
matrix which identifies the risks within each
business area and related activities. The scoring
of the risks and control effectiveness were
considered and helped define the principal risks.
The Committee noted some changes in risk trends
which were in line with expectations and the
operating environment. Whilst the principal risks
remained unchanged, additional emerging risks
were identified and cyber risk was determined to
be worthy of separate consideration having been
previously included as an operational risk. Further
detail is provided on pages 43 to 49.
In relation to emerging risks, the Committee
specifically considered the Company’s exposure
to cyber risk, both within its own operations and
through those of its largest outsourced supplier,
CBRE. The Committee noted the controls
currently in place to mitigate these risks as far
as practical.
The Committee is satisfied that the risk
management processes in place, on behalf of the
Board, remain robust and appropriate for the year.
Internal controls
The Committee is responsible for reviewing the
adequacy and effectiveness of internal controls
on behalf of the Board.
The Committee reviews the system of internal
controls through its risk management process,
oversight and challenge of management reporting
and reviewing findings from the internal assurance
services. This review has been in place throughout
the full financial year, and up to the date of the
approval of the financial statements. The Board is
satisfied that the system of internal controls and
risk management framework remain effective.
BDO provides internal audit and assurance
services to the Group. The Committee agrees to
a programme of reviews with the most recent
scope areas covering capital expenditure,
IT controls and a review of previous findings
completed last year. This year the Committee
has been focused on progressing previous
findings and the smooth implementation of a
new accounting system rather than new scope
areas. Given the new finance system introduced
during the year and the Strategic Review, the
Committee agreed to defer a decision on future
scope until late 2026.
The Committee has also considered key service
providers and, in this context, has received and
reviewed a copy of CBRE Limited’s Real Estate
Accounting Services Control Report as at
31 December 2025. This report was prepared
in accordance with International Standard on
Assurance Engagements 3402 and provides
comfort on the suitability of the design and
operating effectiveness of controls of the property
management accounting services. There were no
issues or areas of concern 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 2026.
Finally, the Audit and Risk Committee has
held discussions with the external auditor
to ensure there are no issues of concern in
relation to the audit of the financial statements.
Representatives of senior management were
not present for these discussions.
Audit, Risk and Internal Control continued
For more information:
Climate-related disclosures
page 64
Risk management page 42
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2024 UK Corporate
Governance Code
The Committee reviewed its compliance with
the new 2024 UK Corporate Governance Code
and considered the requirements set out in the
FRC’s Audit Committees and the External Audit:
Minimum Standard. Throughout the year, both
management and KPMG provided regular
updates to the Committee.
The requirements under Provision 29 of the
Code will apply for the 2026/2027 financial year.
Management, supported by BDO, has been
developing the Company’s approach to achieve
compliance with Provision 29, to ensure that the
Board is positioned to meet these requirements
next year.
External auditor
Independence and objectivity
The Committee is responsible for monitoring the
external auditor’s independence and objectivity.
The Group operates a policy that non-audit work
is not awarded to the external auditor where
there is any risk that its independence could
be compromised. The Committee monitors
the level of fees incurred for non-audit services
to ensure they remain immaterial, and seeks
confirmation, where appropriate, that separate
personnel are involved in any non-audit services
provided to the Group. The Committee must
approve in advance all non-audit assignments
to be carried out by the external auditor.
The external auditor has not been engaged to
perform non-audit work during the financial
year ending 31 March 2026 (2025: £nil).
The fees payable to the Group’s auditor and its
member firms are as follows:
2026
£000
2025
£000
Audit fees 227 218
Interim review fees
1
– 38
Non-audit fees – –
227 256
1. For the half-year results for 30 September 2025, the
Committee decided to no longer engage KPMG to perform
an independent review.
KPMG has provided written confirmation of
its independence to the Committee and the
Committee has concluded that KPMG has
remained independent and objective
throughout the year.
Oversight of external auditor
and audit process
The Committee is responsible for overseeing
and assessing the effectiveness and quality of
the external auditor and the external audit
process throughout the year, taking into
consideration relevant UK professional and
regulatory requirements. The Committee Chair
and the Finance team meet with the audit
partner and audit team members outside of the
regular Committee meetings, to discuss audit
matters raised during the year.
In 2025, an assessment of the external auditor
and the audit process was carried out by way of
a questionnaire and completed by Committee
members, the remaining Board Directors and
members of the finance team.
As part of this assessment, the Committee
considered:
– The external auditor’s qualifications,
expertise and resources;
– The external auditor’s independence
and objectivity;
– The extent to which the external auditor
demonstrated professional scepticism and
challenged management’s assumptions
during the audit, particularly in relation to the
quarterly portfolio valuations;
– The overall performance of the audit team
in terms of audit quality and delivery of
service; and
– The level of remuneration.
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 the year-end
report and accounts.
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 with the overall quality of
the audit process.
KPMG Audit Limited has been external auditor
to the Group since 2009 and following a tender
process carried out in February 2020 was
reappointed for a further ten-year term. The current
audit engagement partner, Steve Stormonth,
has completed four years as audit partner.
The Committee recommends that KPMG Audit
Limited is recommended for reappointment at
the next Annual General Meeting.
Mark Batten
Chair of the Audit and Risk Committee
11 June 2026
During the year,
the Committee
reviewed its
compliance with
the new 2024
UK Corporate
Governance Code.
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Audit, Risk and Internal Control continued
Audit, Risk and Internal Control continued
Terms of reference
The Committee’s terms of reference set out its
responsibilities, and are reviewed annually.
These include reviewing the quarterly valuation
reports prepared by the external valuer, in
accordance with the Royal Institution of
Chartered Surveyors Red Book valuation
standards, before they are submitted to the
Board, focusing on:
– Significant adjustments from prior quarters;
– Assessment of individual property valuations;
– Management commentary;
– Identification of significant asset-specific
issues for management’s attention;
– Material or unexplained movements in the
Company’s net asset value;
– Compliance with applicable standards
and guidelines;
– Review of the valuer’s findings or
recommendations; and
– Consideration of the appointment,
remuneration and removal of the Company’s
valuer, with recommendations provided to the
Board as appropriate.
Activity
The Committee met four times during the
financial year ending 31 March 2026, overseeing
the transition from CBRE Limited (‘CBRE’) to
Knight Frank LLP (‘Knight Frank’). Additionally,
members of the Property Valuation Committee,
together with management, met quarterly with
Knight Frank to review the valuations and assess
the underlying assumptions incorporated into
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:
– Current property market conditions and
prevailing trends;
– Quarter-on-quarter changes focusing on
movements greater than 5%;
– Impact of break notices and capital
expenditure on the valuation;
– Property portfolio yields;
– Letting activity and vacancies;
– Covenant strength and lease lengths;
– Estimated rental values; and
– Comparable market evidence.
Focus areas for 2025/2026
– Transition to new valuer
– Review of quarterly
valuations
Members Attendance
Richard Jones (Chair) 4/4
Mark Batten 4/4
Helen Beck 4/4
Francis Salway 4/4
Property Valuation Committee
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In April 2025, the Committee considered
market trends confirming these had been fully
reflected in the quarterly valuation reports. The
Committee was also satisfied with the valuation
process carried out by CBRE throughout the
previous financial year and noted Knight Frank’s
appointment as new external valuer for the
Group, in line with the new RICS requirement for
the mandatory periodic review of UK valuers.
At the July 2025 meeting, the Committee
reviewed Knight Frank’s delivery of its first
portfolio valuation following appointment,
noting the smoothness of the transition from
CBRE to Knight Frank and that the valuation
process for the June 2025 quarter had been
conducted efficiently and without issue.
In October 2025, the Knight Frank team
updated the Committee on current real estate
market conditions and the future outlook and
highlighted emerging trends.
In January 2026, the Committee reviewed
its constitution, performance and terms of
reference as part of the broader internal Board
and Committee evaluation process. The
Committee concluded that it continued to
operate effectively and was satisfied with the
outcome of the review.
In March 2026, Knight Frank advised that it
would include a market conditions statement
with the 31 March 2026 quarterly valuation
noting that the valuation was prepared during
a period of geopolitical tension arising from the
Iran conflict commencing on 28 February 2026.
Knight Frank drew attention to the resulting
increase in global risk premiums, disrupted
supply chain conditions, and heightened
volatility in energy markets; and highlighted
that such instability could affect financing
conditions, inflation, and investor sentiment,
with behaviour capable of changing rapidly
during periods of heightened volatility. Knight
Frank therefore recommended that the
valuation was closely monitored as it continued
to track how market participants respond to
these evolving market conditions.
External valuer
Knight Frank was appointed as external valuer
for the Group effective June 2025. Knight Frank
is 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
quarterly net asset statements. The valuations
are carried out in accordance with the Royal
Institution of Chartered Surveyors Red Book
valuation standards.
As this is Knight Frank’s first year of
appointment the Committee agreed to defer
its annual assessment of the external valuer’s
performance until April 2026. The Committee
confirmed at the April meeting, that it was
satisfied with Knight Frank’s performance
during the year, having considered the breadth
of experience of the team, their objectivity,
independence, and consistency of approach.
Richard Jones
Chair of the Property Valuation Committee
11 June 2026
We appointed
Knight Frank as our
new external valuer,
effective June 2025.
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Audit, Risk and Internal Control continued
Remuneration Report
Terms of reference
The principal responsibilities 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 £34,250 (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
On behalf of the Board, I am pleased to
introduce the Remuneration Committee
Report for the year ended 31 March 2026.
This report comprises three sections:
– This annual statement;
– Summary of the Remuneration Policy; and
– The Annual Report on Remuneration for
the year ended 31 March 2026.
The Committee had five scheduled
meetings during the year and
attendance is set out on page 83.
I would like to thank shareholders for their
support at the 2025 AGM and approval
of the Remuneration Report, which
received over 99% of the votes in favour.
The key areas of focus during the year
included consideration and approval of annual
salary increases and the level of incentive
opportunity for the Executive Directors
in the context of the Strategic Review.
The Committee also assessed performance
against the variable remuneration targets
for the year ended 31 March 2026, approved
the grant of awards under the Company’s
share schemes and reviewed the employees’
remuneration to ensure this remained aligned
with that of the Executive Directors.
Focus areas for 2025/2026
– Executive Director
remuneration
– Employee remuneration
– Impact of Strategic
Review
Members Attendance
Helen Beck (Chair) 5/5
Mark Batten 5/5
Richard Jones 5/5
Francis Salway 5/5
Other attendees at Committee meetings during
the year were Michael Morris and Saira Johnston.
Neither participated in discussions relating to their
own remuneration.
Remuneration Committee
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Group performance and alignment
We have set out on pages 19 to 22, 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 below.
In assessing Company performance, the
Committee has considered the three strategic
pillars and notes the following highlights:
Portfolio Performance
– Total property return: 5.9% ahead of MSCI
Index of 5.4%
– Property income return: 5.2% ahead of MSCI
Index 4.8%
Operational Excellence
– EPRA EPS: 4.0 pence
– Total return: 6.1%
– EPRA NTA increase of 2% to 102 pence per share
Acting Responsibly
– Total shareholder return: 12.6%
– EPC ratings (A–C) increased from 83% to 86%
Remuneration for the year ending
31 March 2026
Directors’ remuneration will be paid in
line with the Policy, which was approved
by the shareholders at the 2024 AGM.
Annual bonus
As disclosed in last year’s Remuneration
Report, the annual bonus for the year ended
31 March 2026 for the Executive Directors had
a maximum opportunity of 145% of salary
and was based 60% on two equally weighted
financial metrics and 40% on corporate
metrics linked to objectives across the
Company’s three strategic priorities. Based
on performance during the year, outturn
against these metrics is 92% of salary which
represents 63% of the maximum. 60% of this
bonus will be deferred in shares for two years.
The Board has for some time been carefully
considering strategic options to maximise
value for shareholders and determined that it
would be in the best interests of shareholders
as a whole to formalise this into the Strategic
Review launched in January 2026. This process
has involved significant levels of additional
work on the part of the Executive Directors
given the limited resources available within
Picton to support such a review. To recognise
this, the Committee determined that it would
be appropriate for them to have an additional
bonus opportunity of up to 30% of salary
based on an assessment of supplementary
tasks and goals related to the Strategic Review
that were not envisaged at the start of the
financial year. The Committee’s assessment
of performance resulted in a payment of
23% of salary which represents 77% of the
maximum. This additional bonus will be
100% deferred in shares for two years.
Overall annual bonus for the year was
therefore 115% of salary (out of a maximum
total opportunity of 175% of salary which
remains within the Remuneration Policy
limit). Further details on the outcomes can
be found on pages 108 to 109, and further
details on the Company’s KPI performance
can be found on pages 19 to 22.
Variable remuneration metrics for year ending 31 March 2026
Measure Comparator
Annual bonus
1 year
LTIP
3 year
Financial metrics
Total return (TR) Absolute target range
Total property return (TPR) Relative to MSCI UK Quarterly
Property Index
Total shareholder return (TSR) Relative to EPRA Nareit UK Index
EPRA EPS Absolute target range
Corporate objectives
Strategic Review related activities
Our remuneration
approach supports
strong alignment
between Company
performance and
the team.
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Remuneration Report continued
When approving, the Committee considered
whether the formulaic outcome of the
bonus represented a fair reflection of the
underlying performance in the period, and
concluded no adjustment was appropriate.
Long-term Incentive Plan awards
(performance period to 31 March 2026)
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
2023, vesting is calculated based on three equally
weighted performance conditions, measured
over a three-year period to 31 March 2026.
Based on the TSR, TPR and EPS metrics, the
2023 LTIP will vest at 44% of the awards granted.
Further details can be found on pages 110 to 111.
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 2027
During the year, the Committee reviewed the
competitiveness of the Executive Directors’
remuneration arrangements relative to market.
In light of the significant gap identified between
our Executive Directors and their peers,
the Committee determined that incentive
opportunities for the year ending 31 March 2027
should be set at 175% and 150% of salary for
the annual bonus and LTIP respectively. Both
of these opportunity levels remain within the
limits of the existing Remuneration Policy.
Total pay opportunity of our Executive Directors
remains relatively modest compared to peers
and also heavily dependent upon performance.
More details on remuneration for the year
ending 31 March 2027 are set out below.
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% for the Executive Directors to
take effect from 1 April 2026. This compares
to an increase of 3% across all employees.
Annual bonus measures
The Executive Directors will have an annual
bonus opportunity of 175% of salary. The
current expectation is that the bonus will
be determined 40% by corporate objectives
and 60% by financial metrics (total return
and relative total property return – equally
weighted). However, the Committee will
keep this structure under review and will
update it as necessary dependent upon
the conclusion of the Strategic Review.
2026 LTIP awards
It is anticipated that an LTIP award will be
granted to both Executive Directors in 2026
in shares worth 150% of salary. Due to the
ongoing Strategic Review, performance
measures and targets are yet to be confirmed
by the Committee. Full details will be disclosed
on RNS when finalised and agreed.
Employee remuneration
and engagement
The Committee has reviewed employee
remuneration and sought feedback from our
advisers Deloitte. The Committee determined
that there should be a standard increase of 3%
in base salaries with effect from 1 April 2026.
In addition, the total annual employee bonus,
excluding Executive Directors, is expected to
be circa 50% of salaries reflecting the more
challenging market conditions during the year.
During the year, I have met the team
and discussed the results of last year’s
employee engagement survey. I also
met with them subsequent to the
announcement of the Strategic Review.
Remuneration Report continued
100%
of employees participate
in employee share schemes
100%
of employees subject
to bonus deferrals linked
to share price
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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% in base fees
in line with the Executive Directors.
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 2026 AGM and
would be pleased to answer any questions
you may have on this report.
Helen Beck
Chair of the Remuneration Committee
11 June 2026
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Remuneration Report continued
33% 33%
33%
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11%
11%
11%
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58
448
187
457635
390
9
37
282
246
283282
100%
49% 36% 15%
27% 39% 34%
23% 34% 29% 14%
£469
K
£966K
£1,762K
£2,060K
100%
48% 36% 16%
26% 40% 34%
22% 34% 29% 15%
£289K
£602K
£1,104K
£1,293K
The components of remuneration
for the year ending 31 March 2026
Fixed pay
The single figure of remuneration for the Directors
for the year ending 31 March 2026 (in £000s)
Benefits
Pension
Base salary
Other than where stated, the charts do not incorporate share price growth or dividend equivalent awards.
Variable pay
Annual bonus metrics
Total return
Total property
return
Portfolio
Performance
Operational
Excellence
Acting
Responsibly
Strategic Review
Total shareholder
return
Total property
return
EPRA EPS
LTIP metrics
The following charts show the composition
of the Executive Directors’ remuneration at
three performance levels:
Fixed pay – base salary from 1 April 2026,
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 (175% of base salary) and
the LTIP 150% of base salary
Maximum with share price growth – maximum
scenario incorporating assumption of 50% share
price growth during LTIP vesting period
Chief Executive Chief Financial Officer Non-Executive Directors
Total fixed
Total variable
Salary
Benefits
Pension
Annual bonus
Long-term
incentive pay (LTIP)
The potential remuneration of the Executive Directors
for the year ending 31 March 2027
1,092 565 308
Chief Financial Officer
Chief Executive
Total fixed Annual bonus
Long-term incentive pay (LTIP) Share growth
Three year
One year
Remuneration Report continued
Remuneration at a Glance
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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. A full version of the Policy can be found on pages 116–119
of the 2024 Annual Report.
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 a 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.
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.
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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.
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Directors’ Remuneration Policy continued
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Annual Report
on Remuneration
Breakdown of Directors’ total remuneration in the year ending 31 March 2026
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 2026 390 9 58 457 143 305 187 635 1,092
2025 380 6 57 443 169 206 179 554 997
Saira Johnston 2026 246 – 37 283 90 192 – 282 565
2025 240 – 36 276 106 130 – 236 512
Non-Executive
Francis Salway 2026 128 – – 128 – – – – 128
2025 31 – – 31 – – – – 31
Mark Batten 2026 66 – – 66 – – – – 66
2025 61 – – 61 – – – – 61
Richard Jones 2026 57 – – 57 – – – – 57
2025 56 – – 56 – – – – 56
Helen Beck 2026 57 – – 57 – – – – 57
2025 37 – – 37 – – – – 37
Lena Wilson 2025 93 5 – 98 – – – – 98
Maria Bentley 2025 19 – – 19 – – – – 19
Total (audited) 2026 944 9 95 1,048 233 497 187 917 1,965
2025 917 11 93 1,021 275 336 179 790 1,811
Lena Wilson stepped down as a Director on 31 January 2025 and her successor, Francis Salway, was appointed to the Board as Chair on 1 February 2025. Maria Bentley stepped down from
the Board on 30 July 2024 and her successor, Helen Beck, was appointed to the Board on 1 August 2024.
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.
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The figures for 2025 Executive Directors’ LTIP have been restated to reflect the actual share price at vesting (80.05 pence) rather than the average for the quarter ended 31 March 2025
(65.26 pence). The restatement represents an increase in the value of the 2022 LTIP awards of £29,000 for Michael Morris.
The value of LTIP awards for 2026 is based on the number of shares to be awarded to the Executive Directors in respect of the June 2023 LTIP awards and the average share price over the
quarter ended 31 March 2026 of 82.11 pence, and the estimated value of dividend equivalents.
Payments to past Directors or payments for loss of office
As disclosed in the 2024 Remuneration Report, the 2022 LTIP award held by the former CFO, Andrew Dewhirst, vested during the year on a time pro-rated basis following a performance
assessment (details of which are on page 126 of the 2025 Annual Report). In addition, 2023 Deferred Bonus Plan awards held by Andrew also vested during the year.
Malus and clawback
Annual bonus and LTIP awards are subject to malus and clawback provisions as set out in the Remuneration Policy. The potential time periods within which these provisions can be
applied have been set by the Remuneration Committee so as to be consistent with the risk profile of the business and in line with UK market practice. There has been no application of
malus and clawback provisions in respect of the Executive Directors during the year.
Executive Directors’ remuneration for the year ending 31 March 2026
Annual bonus
As disclosed in last year’s Remuneration Report, the annual bonus for the year ended 31 March 2026 for the Executive Directors had a maximum opportunity of 145% of salary and was
based 60% on two equally weighted financial metrics and 40% on corporate objectives. Additionally, as discussed in the Committee Chair’s letter, the Committee agreed that the Directors
should have an additional opportunity of up to 30% of salary linked specifically to supplementary tasks and goals related to the Strategic Review that were not envisaged at the start of the
financial year. The maximum bonus opportunity of 175% remains within the Remuneration Policy limit.
Annual bonus – financial metric outcomes
Performance condition Basis of calculation Range Actual
Awarded
(% of maximum)
Awarded
(% of salary)
Total return
Bonus weighting: 30%
Less than 6% – 0%
Equal to 6% – 50%
Between 6% and 14% – straight-line basis between 50% and 100%
N/A 6.1% 51% 22%
Total property return
versus MSCI Index
Bonus weighting: 30%
Less than median – 0%
Equal to median – 50%
Equal to upper quartile – 100%
Median 5.6%
Upper quartile 7.1%
5.9% 60% 26%
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Annual bonus – corporate objective outcomes
Performance condition Assessment
Awarded
(% of maximum)
Awarded
(% of salary)
Portfolio Performance
Bonus weighting: 13.3%
– Completed disposal of highest value London office asset at 1% ahead of valuation
– Total return of 6.1%
– Outperformed the MSCI benchmark 50bps
– Portfolio activity increase of 27%
59% 12%
Operational Excellence
Bonus weighting: 13.3%
– Proactive capital recycling and share buyback programme extended
– NAV growth of 2% to 102 pence per share
– Maintained gearing at 24%
– New finance systems implemented
78% 15%
Acting Responsibly
Bonus weighting: 13.3%
– Total shareholder return of 12.6% and broadened the shareholder register
– Improved scores on occupier engagement
– Embedding ESG strategy and net zero target-setting
88% 17%
Subtotal outturn
from financial and
corporate objectives
(max 145% of salary)
63% 92%
Annual bonus – Strategic Review
Assessment
Awarded
(% of maximum)
Awarded
(% of salary)
Max 30% of salary – Working with advisers and interested parties to evaluate potential options including information provision and
stakeholder engagement
77% 23%
The overall annual bonus outcome for the Executive Directors is set out in the table below:
Maximum
bonus
opportunity
Financial
metrics
(% of salary)
Corporate
objectives
(% of salary)
Strategic
Review
(% of salary)
Total bonus
(% of salary)
Total bonus
£000
Michael Morris 175% 48% 44% 23% 115% 448
Saira Johnston 175% 48% 44% 23% 115% 282
The Committee was satisfied that the above performance was achieved within an acceptable risk profile. As discussed in the Committee Chair’s statement on page 100, the Committee
considered the formulaic bonus outcome in the context of the Group’s overall performance over the year and concluded that it was satisfied the formulaic outcome was a fair reflection of
overall Group performance.
In line with the Policy, the Committee has determined that 60% of this year’s bonus award related to financial metrics and corporate objectives will be deferred and 100% related to the
Strategic Review will be deferred. The deferred element is paid in shares, usually vesting after two years, with a cash amount equivalent to the dividends accrued since the award date.
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Long-term Incentive Plan
The LTIP awards granted on 14 June 2023 were subject to performance conditions for the three years ended 31 March 2026. Based on the performance over the period, the LTIP will vest at
44% of the awards granted.
2023 LTIP award performance conditions
Performance condition Basis of calculation Range Actual
Weighting
(% of award)
Awarded
(% of maximum)
Total shareholder return versus
comparator group
1
(and
absolute TSR underpin)
Less than median – 0%
Equal to median – 25%
Equal to upper quartile – 100%
Median – 19.7%
Upper quartile – 40.3%
29.6%
(between median
and upper quartile)
33.3% 62.4%
Total property return versus
MSCI Index
Less than median – 0%
Equal to median – 25%
Equal to upper quartile – 100%
Median – 4.1%
Upper quartile – 5.5%
4.9% 33.3% 69.4%
Growth in EPRA EPS For the year ended 31 March 2026
Less than 4.2pps: 0%
Equal to 4.2pps: 25%
Between 4.2pps and 4.55pps: straight-line basis between 25% and 100%
N/A 4.0p 33.3% Nil
1. Comparator group comprised abrdn Property Income Trust Limited, AEW UK REIT plc, Balanced Commercial Property Trust Limited, Custodian Property Income REIT plc, Ediston Property Investment Company PLC, NewRiver REIT PLC,
Regional REIT Limited, Schroder Real Estate Investment Trust Limited, Supermarket Income REIT PLC, UK Commercial Property REIT Limited, Urban Logistics REIT plc, Warehouse REIT plc, Workspace Group PLC. CT Property Trust Limited
was excluded from the group following its delisting within the first six months of the performance period.
The Committee was satisfied that the above performance was achieved within an acceptable risk profile. As discussed in the Committee Chair’s statement on page 100, the Committee
considered the formulaic LTIP outcome in the context of the Group’s overall performance during 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 82.11 pence for the quarter ended 31 March 2026 are shown below.
The shares awarded are subject to a further two-year post-performance holding period.
2023 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 456,408 200,576 255,832 186,907
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 £22,214 (Michael Morris).
2. The average share price for the quarter ended 31 March 2026 is higher than the share price at grant, so £8,000 of the estimated value of the awards relates to share price growth.
LTIP awards to Executive Directors during 2025
The CFO was not granted an LTIP award in June 2024, instead granted a larger than standard award of shares worth 150% of salary in June 2025, with shares worth 40% of salary subject to
performance conditions applicable to all other employees’ June 2024 LTIP grant and the remainder of the award (shares worth 110% of salary) subject to the same performance conditions
applicable to all other LTIP awards granted in June 2025. The Committee agreed this performance structure to ensure that the CFO was appropriately incentivised relative to her period of
employment 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.
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2025 LTIP awards to Executive Directors
The following awards in the Long-term Incentive Plan were granted to the Executive Directors on 30 June 2025:
Number of shares
Basis
(% of salary)
Face value per share
(£)
Award face value
(£) Performance period Threshold vesting
Michael Morris 604,953 125% 0.8053 487,188 1 April 2025 to 31 March 2028 25%
Saira Johnston 122,185 40% 0.8053 98,400 1 April 2024 to 31 March 2027 25%
336,011 110% 0.8053 270,600 1 April 2025 to 31 March 2028 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 subject to the achievement of three equally weighted performance conditions (relative total shareholder return (TSR) and absolute TSR underpin, relative total property
return and EPRA EPS).
Performance period
1 April 2024 to 31 March 2027
Performance period
1 April 2025 to 31 March 2028
Relative TSR Comparator group of peers (listed on page 126 of 2025 Annual Report)
Less than median: 0%
Equal to median: 25%
Equal to upper quartile: 100%
Comparator of EPRA Nareit UK Index
Less than Index: 0%
Equal to Index: 25%
Equal to Index + 4% per annum: 100%
Relative total property return versus MSCI Index Less than median: 0%
Equal to median: 25%
Equal to upper quartile: 100%
Less than median: 0%
Equal to median: 25%
Equal to upper quartile: 100%
Growth in EPRA EPS For the year ended 31 March 2027
Less than 4.2p: 0%
Equal to 4.2p: 25%
Equal to 4.6p: 100%
For the year ended 31 March 2028
Less than 4.46p: 0%
Equal to 4.46p: 25%
Equal to 4.84p: 100%
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 2025 Granted in year
Exercised
in year Lapsed in year
As at
31 March 2026
Michael Morris
2022 LTIP 17 June 2022 1 April 2022 to 31 March 2025 94.47p 437,473 – (197,279) (240,194) –
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
2025 LTIP 30 June 2025 1 April 2025 to 31 March 2028 80.53p – 604,953 – – 604,953
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Date of grant Performance period
Market value on
date of grant At 1 April 2025 Granted in year
Exercised
in year Lapsed in year
As at
31 March 2026
Michael Morris
2023 DBP 14 June 2023 N/A 78.10p 301,997 – (301,997) – –
2024 DBP 6 June 2024 N/A 67.47p 241,129 – – – 241,129
2025 DBP 30 June 2025 N/A 80.53p – 254,740 – – 254,740
1,965,323 859,693 (499,276) (240,194) 2,085,546
Saira Johnston
2024 LTIP 30 June 2025 1 April 2024 to 31 March 2027 80.53p – 122,185 – – 122,185
2025 LTIP 30 June 2025 1 April 2025 to 31 March 2028 80.53p – 336,011 – – 336,011
2024 DBP 6 June 2024 N/A 67.47p 355,713 – – – 355,713
2025 DBP 30 June 2025 N/A 80.53p – 160,834 – – 160,834
355,713 619,030 – – 974,743
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
2026
Beneficial holding
2025
Holding as a
% of salary
1
Outstanding
LTIP awards
Outstanding
DBP awards
Michael Morris 1,378,931 1,114,789 272% 1,589,677 495,869
Saira Johnston 35,434 35,434 11% 458,196 516,547
Francis Salway 275,000 – – – –
Mark Batten 38,000 38,000 – – –
Helen Beck 20,371 – – – –
Richard Jones 53,845 53,845 – – –
1. The holding as a percentage of salary does not include the outstanding LTIP and DBP awards.
The percentage holding for the Executive Directors is based on base salaries as at 31 March 2026 and a share price of £0.769 as at 31 March 2026.
There have been no changes in these shareholdings between the year-end and the date of this report.
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Outstanding number of awards under LTIP and Deferred Bonus Plan continued
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Historical total shareholder return performance
The graph below shows the Company’s total shareholder return (TSR) since 31 March 2016
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
2023
Mar
2024
Mar
2025
Mar
2016
Mar
2017
Mar
2018
Mar
2019
Mar
2020
Mar
2021
Mar
2022
Mar
2026
Chief Executive pay
The table below shows the remuneration of the Chief Executive for the past eight 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 these years.
Total
remuneration
(£000)
Annual bonus
(% of maximum)
LTIP vesting
(% of maximum
award)
2026 1,092 66%
1
44%
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%
1. 2026: the maximum bonus award was increased from 145% to 175% in light of the Strategic Review.
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 2026
£000
31 March 2025
£000 % change
Employee costs 4,554 4,444 2%
Dividends 19,738 20,159 3%
1
EPRA earnings 20,888 22,840 (4%)
1
1. Calculated on a pence per share basis.
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Implementation of Remuneration Policy for the year ending 31 March 2026
Change from prior year
Executive Directors
Base salaries Michael Morris (Chief Executive) – £397,750
Saira Johnston (Chief Financial Officer) – £251,000
2% 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 175% of salary with at least 50% of any bonus deferred in shares for two years.
The current expectation is that 60% of bonus will 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. However,
the Committee will keep this structure under review and will update it as necessary dependent upon the conclusion of
the Strategic Review.
As outlined in the Committee Chair’s letter, the
annual bonus opportunity is set at 175% of salary.
LTIP
1
It is anticipated that an LTIP award will be granted to both Executive Directors in 2026 over shares worth 150% of salary.
Due to the ongoing Strategic Review, performance measures and targets are yet to be confirmed by the Committee.
Full details will be disclosed when finalised and agreed.
As outlined in the Committee Chair’s letter, the
LTIP opportunity is set at 150% of salary for both
Executive Directors (prior year Chief Executive:
125%, CFO: 150%).
Non-Executive Directors
Fees Chair – £130,250
Director – £50,180
Supplementary fee for Committee Chairs and for the Senior Independent Director – £8,200
The base fees payable from 1 April 2026 have
increased by 2%. There has been no change to
supplementary fees.
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.
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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 31/3/25 to 31/3/26
1
Change from 31/3/24 to 31/3/25 Change from 31/3/23 to 31/3/24
Salary/fees Benefits Bonus
2
Salary/fees Benefits Bonus Salary/fees Benefits Bonus
Michael Morris 2.5% 7.1% (4.2)% – 3.4% 26.6% 15.0% 15.0% (24.8)%
Saira Johnston 2.5% 2.5% (4.2)% – – – – – –
Andrew Dewhirst – – – (100.0)% (100.0)% (100.0)% 15.0% 15.0% (24.8)%
Lena Wilson (100.0)% – – (23.5)% – – 4.5% – –
Francis Salway 310.3% – – – – – – – –
Mark Batten 7.0% – – 11.5% – – 4.8% – –
Maria Bentley (100.0)% – – (66.1)% – – 4.8% – –
Helen Beck 53.7% – – – – – – – –
Richard Jones 2.5% – – 1.8% – – 4.8% – –
Average of all other employees 0.4% (2.2)% (6.1)% 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
Salary/fees Benefits Bonus Salary/fees Benefits Bonus
Michael Morris 15.0% 16.0% 30.4% 15.0% 15.8% 9.4%
Andrew Dewhirst 15.0% 16.4% 30.4% 15.0% 16.1% 9.4%
Lena Wilson 0.0% – – 11.2% – –
Mark Batten 0.0% – – 10.5% – –
Maria Bentley 0.0% – – 16.7% – –
Richard Jones 0.0% – – 16.7% – –
Average of all other employees 8.8% 21.2% (5.9)% 6.4% 15.0% 13.2%
1. The percentage increases shown for Francis Salway and Helen Beck are artificially high as they joined the Board during the 2025 financial year and so their fees for that year were not in respect of a full year. The large percentage reductions for
Andrew Dewhirst, Lena Wilson and Maria Bentley reflect their stepping down as Directors.
2. The percentage change in bonus includes business as usual bonus amounts.
Statement of voting at the last Annual General Meeting
The following table sets out the voting for the Remuneration Report, which was approved by shareholders at the Annual General Meeting held on 30 July 2025, representing 57.67% of the
issued share capital of the Company; and also for the Remuneration Policy, which was approved by shareholders at the Annual General Meeting held on 30 July 2024, representing 59.47%
of the issued share capital of the Company.
Remuneration Report Remuneration Policy
Votes cast % Votes cast %
For 301,961,707 99.29 325,633,104 98.61
Against 2,144,734 0.71 4,591,492 1.39
Votes cast 304,106,441 100.0 330,224,596 100.0
Withheld 15,445 15,668
Helen Beck
Chair of the Remuneration Committee
11 June 2026
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The Directors of Picton Property Income Limited present the Annual Report and audited
financial statements for the year ended 31 March 2026.
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 0.95 pence per share, making a total dividend for the year
ended 31 March 2026 of 3.8 pence per share (2025: 3.7 pence). All four interim dividends
were paid as PIDs.
Directors
The Directors of the Company who served throughout the year are:
– Francis Salway
– Mark Batten
– Helen Beck
– Saira Johnston
– Richard Jones
– Michael Morris
There have been no new appointments to the Board during the year and therefore all of the
Directors will offer themselves for re-election at the Annual General Meeting.
The Directors’ interests in the shares of the Company as at 31 March 2026 are set out in the
Remuneration Report.
2024 UK Corporate Governance Code Compliance Statement
The Board confirms that for the year ended 31 March 2026 the principles of good
corporate governance contained in the 2024 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 2026 was 513,827,021 (2025:
536,400,000) ordinary shares of no par value, including 3,119,446 ordinary shares which are
held by the Trustee of the Company’s Employee Benefit Trust (2025: 2,942,959 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. The
share buyback programme, announced on 30 January 2025, was extended on 4 April and
22 May by £2.5 million and £5.0 million respectively with 24,016,391 ordinary shares being
purchased under the shareholder authority granted in 2024. A new buyback programme,
totalling £12.5 million, was announced on 11 September 2025 under the shareholder
authority granted at the 2025 AGM. Under this shareholder programme 9,762,184 ordinary
shares were purchased up until 12 January 2026 when the programme was suspended
following the Company’s announcement of a Strategic Review process. A total of 22,572,979
shares were purchased by the Company during the year, which represents 4.208% of the
share capital issued as at 31 March 2025.
At the 2025 Annual General Meeting, shareholders gave the Directors authority to issue up
to 53,063,920 shares (being 10% of the Company’s issued share capital as at 21 May 2025)
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 September, 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
3,119,446 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.
Directors’ Report
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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 2026. 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.
The Directors have also considered the non-binding indicative all-share offer by
LondonMetric Property Plc and Schroder Real Estate Investment Property Trust Limited
made on 12 May 2026. The offer is subject to further negotiations and ongoing due
diligence however the Directors’ understanding is that should the offer proceed, based on
the indicative terms, this will not impact upon the going concern status of the Company.
Based on the above and their knowledge of the portfolio and market, the Directors have
therefore continued to adopt the going concern basis in preparing the financial statements.
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.
As outlined in the Statement of going concern above, on 12 May 2026, the Board received
a non-binding indicative all-share offer by LondonMetric Property Plc and Schroder Real
Estate Investment Property Trust Limited. The offer is subject to further negotiations and
ongoing due diligence. The Board has therefore prepared this viability statement on a
continuing basis.
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 2031 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 2031.
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 31 May 2026.
% of issued
share capital
Columbia Threadneedle Investments 15.8
Rathbones Group plc 6.7
The Vanguard Group Inc. 5.0
BlackRock Inc. 4.8
Premier Miton Investors (UK) 4.2
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Directors’ Report continued
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
On 1 October 2025 KPMG Channel Islands Limited (the ‘Auditor’) changed its name to
KPMG Audit Limited. KPMG Audit Limited served as independent auditor throughout the
year and 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.
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
Saira Johnston
11 June 2026
Directors’ Report continued
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Inside this section
Financial Statements
120 Independent Auditor’s Report
124 Consolidated Statement of
Comprehensive Income
124 Consolidated Statement of Changes
in Equity
125 Consolidated Balance Sheet
125 Consolidated Statement of Cash Flows
126 Notes to the Consolidated Financial
Statements
Additional Information
144 EPRA BPR and
Supplementary Disclosures
148 Property Portfolio
149 Five-Year Financial Summary
150 Glossary
152 Financial Calendar and
Shareholder Information
Financial
Statements
Our financial statements provide a clear
and transparent view of our performance,
reflecting the strength of our business
and our disciplined approach to delivering
sustainable returns.
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Additional
Information
Financial
StatementsGovernance
Strategic
Report
Picton Property Income Limited
Annual Report 2026119
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 2026, 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 2026, and of the
Group’s financial performance and cash flows for the year then ended;
–
are prepared in accordance with International Financial Reporting Standards; and
–
comply with the Companies (Guernsey) Law, 2008.
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
£682 million (2025: £701 million)
Refer to page 95 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 91% (2025: 92%)
of the Group’s total assets as at 31 March 2026. The fair value of
investment properties at 31 March 2026 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.
We performed the procedures below rather than seeking to rely on the controls as the nature of the balance is such that
we would expect to obtain audit evidence primarily through the detailed procedures described.
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.
Emphasis of matter
We draw attention to Note 2 to the consolidated financial statements, which describes that the
Company has received an indicative, non-binding all-share offer for the entire issued and to be
issued share capital of the Company from potential acquirers. This was announced by the Directors
on 12 May 2026. As this offer is non-binding, its terms have not been finalised and the potential
transaction may not occur.
Our opinion is not modified in respect of this matter.
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 2025):
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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 £7.6 million,
determined with reference to a benchmark of group total assets of £751.7 million, of which it
represents approximately 1.0% (2025: 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% (2025: 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;
– The ability of the Group and the Company to comply with debt covenants; and
–
The outcome of the ongoing Strategic Review and the non-binding, indicative all-share offer.
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.
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Independent Auditor’s Report to the
Members of Picton Property Income Limited continued
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 117) 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;
– the Directors’ explanation in the Viability assessment and statement (page 117) 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.
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We are also required to review the Viability assessment and statement, set out on page 117
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 system of internal controls.
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 118, 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 Audit Limited
Chartered Accountants and Recognised Auditors
Guernsey
11 June 2026
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Independent Auditor’s Report to the
Members of Picton Property Income Limited continued
Consolidated Statement of Comprehensive Income
for the year ended 31 March 2026
Consolidated Statement of Changes in Equity
for the year ended 31 March 2026
| 2026 | 2025 | ||
| Notes | £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 | ||
Profit on disposal of property, plant & equipment | 14 | ||
Investment property valuation movements | 13 | ||
(Loss)/profit on disposal of investment property | 13 | ( | |
Total profit on investments | |||
Operating profit | |||
| Financing | |||
Interest income | 8 | ||
Interest expense | 8 | ( | ( |
Total finance costs | ( | ( | |
Profit before tax | |||
Tax | 9 | ||
Profit after tax | |||
Total comprehensive income 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 28 form part of these consolidated financial statements.
| Retained | Other | ||||
| Share capital | earnings | reserves | Total | ||
| Notes | £000 | £000 | £000 | £000 | |
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 | 21 | ( | ( | ||
Balance as at 31 March 2025 | ( | ||||
Profit for the year | |||||
Dividends paid | 10 | ( | ( | ||
Share-based awards | |||||
Purchase of shares held in trust | 7 | ( | ( | ||
Purchase and cancellation of own shares | 21 | ( | ( | ||
Balance as at 31 March 2026 | ( |
Notes 1 to 28 form part of these consolidated financial statements.
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Consolidated Balance Sheet
as at 31 March 2026
Consolidated Statement of Cash Flows
for the year ended 31 March 2026
| 2026 | 2025 | ||
| Notes | £000 | £000 | |
| Non-current assets | |||
Investment properties | 13 | ||
Property, plant and equipment | 14 | ||
Lease receivable | 15 | ||
Total non-current assets | |||
| Current assets | |||
Accounts receivable | 16 | ||
Cash and cash equivalents | 17 | ||
Total current assets | |||
Total assets | |||
| Current liabilities | |||
Accounts payable and accruals | 18 | ( | ( |
Loans and borrowings | 19 | ( | ( |
Obligations under leases | 23 | ( | ( |
Total current liabilities | ( | ( | |
| Non-current liabilities | |||
Loans and borrowings | 19 | ( | ( |
Obligations under leases | 23 | ( | ( |
Total non-current liabilities | ( | ( | |
Total liabilities | ( | ( | |
Net assets | |||
| Equity | |||
Share capital | 21 | ||
Retained earnings | |||
Other reserves | ( | ( | |
Total equity | |||
Net asset value per share | 24 |
Notes 1 to 28 form part of these consolidated financial statements.
| 2026 | 2025 | ||
| Notes | £000 | £000 | |
| Operating activities | |||
Operating profit | |||
Adjustments for non-cash items | 22 | ( | ( |
Interest received | |||
Interest paid | ( | ( | |
Decrease in accounts receivable | |||
Decrease 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 | ( | ( |
Disposal of property, plant and equipment | 14 | ||
Lease premium received | 15 | ||
Cash inflows from investing activities | |||
| Financing activities | |||
Borrowings repaid | 19 | ( | ( |
Refinancing costs paid | 19 | ( | |
Purchase of shares held in trust | 7 | ( | ( |
Purchase and cancellation of own shares | 21 | ( | ( |
Dividends paid | 10 | ( | ( |
Lease payments | ( | ||
Cash outflows from financing activities | ( | ( | |
Net increase in cash and cash equivalents | |||
Cash and cash equivalents at beginning of year | |||
Cash and cash equivalents at end of year | 17 |
Notes 1 to 28 form part of these consolidated financial statements.
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Notes to the Consolidated Financial Statements
for the year ended 31 March 2026
1. General information
‘Group’) was established in Guernsey on 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 2026 with comparatives for the year ended 31 March 2025.
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2. Material accounting policies continued
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Notes to the Consolidated Financial Statements continued
2. Material accounting policies continued
Notes to the Consolidated Financial Statements continued
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2. Material accounting policies continued
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Notes to the Consolidated Financial Statements continued
| 2026 | 2025 | |
| £000 | £000 | |
Rents receivable (adjusted for lease incentives) | 41,190 | 43,531 |
Surrender premiums | 1,621 | 7 |
Dilapidation receipts | 411 | 368 |
Other income | 91 | 286 |
43,313 | 44,192 | |
Service charge income | 7,756 | 9,827 |
51,069 | 54,019 |
4. Property expenses
| 2026 | 2025 | |
| £000 | £000 | |
Property operating costs | 3,369 | 2,629 |
Property void costs | 4,132 | 3,887 |
7,501 | 6,516 | |
Recoverable service charge costs | 7,756 | 9,827 |
15,257 | 16,343 |
Property operating costs include £0.9 million for lease incentives (2025: £0.4 million).
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 46 commercial properties, which are in the industrial, office, retail and
leisure sectors.
| 2026 | 2025 | |
| £000 | £000 | |
Director and staff costs | 4,554 | 4,444 |
Auditor’s remuneration | 227 | 256 |
Other administrative expenses | 2,356 | 2,400 |
7,137 | 7,100 | |
Strategic Review costs | 636 | – |
7,773 | 7,100 |
| 2026 | 2025 | |
| Auditor’s remuneration comprises: | £000 | £000 |
| Audit fees: | ||
Audit of Group financial statements | 144 | 138 |
Audit of subsidiaries’ financial statements | 83 | 80 |
| Audit-related fees: | ||
Review of interim financial statements | – | 38 |
227 | 256 |
Notes to the Consolidated Financial Statements continued
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7. Director and staff costs
| 2026 | 2025 | |
| £000 | £000 | |
Wages and salaries | 2,419 | 2,436 |
Non-Executive Directors’ fees | 308 | 298 |
Social security costs | 605 | 526 |
Other pension costs | 58 | 51 |
Share-based payments – cash settled | 357 | 311 |
Share-based payments – equity settled | 807 | 822 |
4,554 | 4,444 | |
Strategic Review related costs | 316 | – |
4,870 | 4,444 |
| Units at | Units | Units | Units | Units at | Units | Units | Units | Units at | |
| 31 March | granted in | cancelled | redeemed | 31 March | granted | cancelled | redeemed | 31 March | |
| Vesting date | 2024 | the year | in the year | in the year 2025 | in the year | in the year | in the year 2026 | ||
22 June 2023 | 139,956 | – | – | (139,956) | – | – | – | – | – |
17 June 2024 | 498,788 | – | – | (498,788) | – | – | – | – | – |
14 June 2025 | 832,580 | – | – | – | 832,580 | – | – | (832,580) | – |
6 June 2026 | – | 1,063,607 | – | – | 1,063,607 | – | – | – | 1,063,607 |
30 June 2027 | – | – | – | – | – | 661,027 | – | – | 661,027 |
1,471,324 | 1,063,607 | – | (638,744) | 1,896,187 | 661,027 | – | (832,580) | 1,724,634 | |
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Notes to the Consolidated Financial Statements continued
7. Director and staff costs continued
| Assumptions | ||
Grant date | 30 June 2025 | 6 June 2024 |
Share price at date of grant | 80.4p | 67.4p |
Exercise price | Nil | Nil |
Expected term | 3 years | 3 years |
Risk-free rate – TSR condition | 3.7% | 4.3% |
Share price volatility – TSR condition | 24.3% | 26.7% |
Median volatility of comparator group – TSR condition | 21.4% | 29.2% |
Correlation – TSR condition | 67.8% | 50.2% |
TSR performance at grant date – TSR condition | 18.3% | 7.0% |
| Median TSR performance of comparator group at grant | ||
date – TSR condition | 11.2% | 4.4% |
Fair value – TSR condition (Monte Carlo method) | 44.0p | 29.0p |
Fair value – TPR condition (Black-Scholes model) | 80.4p | 67.4p |
Fair value – EPS condition (Black-Scholes model) | 80.4p | 67.4p |
| 2026 | 2025 | |
| Interest paid | £000 | £000 |
Interest payable on loans | 7,983 | 8,081 |
Interest on obligations under finance leases | 172 | 173 |
Interest expense under leasing arrangements | 39 | – |
Non-utilisation fees | 328 | 295 |
8,522 | 8,549 |
9. Tax
The charge for the year is:
| 2026 | 2025 | |
| £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:
| 2026 | 2025 | |
| £000 | £000 | |
Profit before taxation | 25,854 | 37,323 |
Expected tax charge on ordinary activities at the standard rate of taxation of 25% (2025: 25%) | 6,464 | 9,331 |
| Less: | ||
UK REIT exemption on net income | (5,063) | (5,710) |
Revaluation movement not taxable | (1,401) | (3,621) |
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.
Notes to the Consolidated Financial Statements continued
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10. Dividends
| 2026 | 2025 | |
| £000 | £000 | |
| Declared and paid: | ||
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 |
Interim dividend for the period ended 31 March 2025: 0.95 pence | 5,019 | – |
Interim dividend for the period ended 30 June 2025: 0.95 pence | 4,956 | – |
Interim dividend for the period ended 30 September 2025: 0.95 pence | 4,911 | – |
Interim dividend for the period ended 31 December 2025: 0.95 pence | 4,852 | – |
19,738 | 20,159 |
The interim dividend of 0.95 pence per ordinary share in respect of the period ended
31 March 2026 has not been recognised as a liability as it was declared after the year end.
This dividend of £4,852,000 was paid on 29 May 2026.
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:
2026 | 2025 | |
| Net profit attributable to ordinary shareholders of the | ||
Company from continuing operations (£000) | 25,854 | 37,323 |
| Weighted average number of ordinary shares for basic | ||
earnings per share | 519,279,302 | 544,037,179 |
| Weighted average number of ordinary shares for diluted | ||
earnings per share | 521,208,792 | 545,502,180 |
| Place of | Ownership | |
| Name | incorporation | 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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Notes to the Consolidated Financial Statements continued
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.
| 2026 | 2025 | |
| £000 | £000 | |
Fair value at start of year | 700,694 | 724,043 |
Capital expenditure on investment properties | 8,792 | 11,794 |
Acquisitions | – | 533 |
Disposals | (29,513) | (50,031) |
(Loss)/profit on disposal of investment properties | (999) | 1,496 |
Reclassification of investment property (see Note 15) | (3,445) | – |
Unrealised movement on investment properties | 6,561 | 12,859 |
Fair value at the end of the year | 682,090 | 700,694 |
Historic cost at the end of the year | 628,834 | 647,863 |
The fair value of investment properties reconciles to the appraised value as follows:
| 2026 | 2025 | |
| £000 | £000 | |
Appraised value | 700,795 | 723,145 |
Carlisle asset classified as finance lease (see Note 15) | (1,083) | – |
Valuation of assets held under head leases | 2,028 | 2,074 |
Owner-occupied property | – | (3,438) |
Lease incentives held as debtors | (19,650) | (21,087) |
Fair value at the end of the year | 682,090 | 700,694 |
In Carlisle, the hotel occupier entered into a new 99-year lease with a premium of £2.35 million
being received as part of extending the lease term and a rent reduction. As the present value
of lease payments amount to at least substantially all of the fair value of the underlying asset
the lease has been treated as a finance lease in the financial statements. The present value of
the remaining lease payments receivable under the lease are classified in Note 15.
The sale of Stanford Building, London WC2 completed in the period with net disposal
proceeds of £32.9 million, of which £29.5 million has been treated as a disposal of
investment property and £3.4 million has been treated as a disposal of owner-occupied
property (see Note 14). A realised loss on disposal of investment property of £1.0 million has
been realised in the statement of comprehensive income.
The investment properties were valued by independent valuers, Knight Frank LLP as
at 31 March 2026 and CBRE Limited as at 31 March 2025, 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 Knight Frank LLP and 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 Knight Frank LLP.
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; and
– 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.
The March 2026 valuation has been prepared during a period of geopolitical tension arising
from the Middle East conflict which commenced on 28 February 2026. This has resulted in
an increase to global risk premiums, disrupted supply chain conditions, and heightened
volatility in energy markets. Such instability can affect financing conditions, inflation, and
investor sentiment, with behaviour capable of changing rapidly during periods of
heightened volatility. The external valuer, Knight Frank LLP, has therefore confirmed that
the opinions used in their valuation are only valid as at the valuation date and that market
conditions should be closely monitored to see how they evolve.
Notes to the Consolidated Financial Statements continued
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13. Investment properties continued
As at 31 March 2026 and 31 March 2025, all of the Group’s properties 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:
2026 | 2025 | |||||
| Retail and | Retail and | |||||
Office | Industrial | Leisure | Office | Industrial | Leisure | |
Appraised value (£000) | 146,300 | 468,725 | 84,687 | 175,305 | 463,220 | 84,620 |
Area (sq ft, 000s) | 686 | 3,255 | 699 | 706 | 3,227 | 692 |
Range of unobservable inputs: | ||||||
| Gross ERV | ||||||
| (sq ft per annum) | £12.45 to | £3.14 to | £4.09 to | £12.45 to | £3.92 to | £3.35 to |
| – range | £66.97 | £31.27 | £32.05 | £93.46 | £29.96 | £28.12 |
– weighted average | £33.31 | £14.29 | £12.08 | £43.74 | £13.69 | £12.42 |
| Net initial yield | 2.29% to | 0.00% to | 0.00% to | 3.51% to | 2.89% to | 0.00% to |
| – range | 10.53% | 8.08% | 13.82% | 12.10% | 8.21% | 24.58% |
– weighted average | 5.98% | 4.20% | 5.93% | 6.96% | 4.53% | 6.15% |
| Reversionary yield | 6.87% to | 1.15% to | 6.54% to | 5.12% to | 4.76% to | 6.97% to |
| – range | 14.48% | 8.64% | 16.86% | 15.39% | 9.17% | 17.13% |
– weighted average | 10.34% | 6.12% | 7.95% | 9.37% | 5.83% | 8.16% |
| True equivalent yield | 6.02% to | 5.00% to | 6.45% to | 5.14% to | 4.78% to | 6.50% to |
| – range | 12.92% | 9.86% | 11.51% | 11.30% | 8.39% | 12.75% |
– weighted average | 9.12% | 5.85% | 7.86% | 8.20% | 5.63% | 7.91% |
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 | 2026 | Impact on valuation | 2025 | Impact on valuation |
Industrial | Increase of 50 basis points | Decrease of £39.4m | Decrease of £39.3m | ||
Decrease of 50 basis points | Increase of £48.0m | Increase of £47.3m | |||
Office | Increase of 50 basis points | Decrease of £9.6m | Decrease of £11.8m | ||
Decrease of 50 basis points | Increase of £10.7m | Increase of £13.5m | |||
Retail and Leisure | Increase of 50 basis points | Decrease of £5.4m | Decrease of £5.0m | ||
Decrease of 50 basis points | Increase of £6.1m | Increase of £5.7m |
| Owner- | ||||
| Right of | occupied | Plant and | ||
| use asset | property | equipment | Total | |
| £000 | £000 | £000 | £000 | |
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 |
Additions | 1,201 | – | 3 | 1,204 |
Depreciation | (125) | (40) | (55) | (220) |
Disposals | – | (3,438) | – | (3,438) |
Profit on disposal | – | 40 | – | 40 |
At 31 March 2026 | 1,076 | – | 14 | 1,090 |
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Notes to the Consolidated Financial Statements continued
15. Lease receivable
The Group owns a portfolio of investment properties and enters into lease arrangements
with commercial occupiers. During the year, the Group entered into a new 99-year lease
with an occupier of a hotel in Carlisle.
At commencement of the lease, the present value of lease payments receivable amounted
to substantially all of the fair value of the underlying asset. As a result, the Group has
classified the arrangement as a finance lease and derecognised the hotel as an investment
property, recognising instead a lease receivable on the balance sheet.
The fair value of the hotel at lease commencement, and therefore the initial lease receivable
amount recognised, was £3.4 million.
A lease premium of £2.4 million was received from the occupier at lease commencement.
At the reporting date, the Group’s future income based on the unexpired lease length,
together with the unearned finance income, was as follows:
| 2026 | 2025 | |
| £000 | £000 | |
Within one year | 75 | – |
One to two years | 75 | – |
Two to three years | 75 | – |
Three to four years | 75 | – |
Four to five years | 77 | – |
After five years | 8,550 | – |
Total undiscounted lease payments receivable | 8,927 | – |
Unearned finance income | (7,829) | – |
Lease receivable | 1,098 | – |
Profit and loss information
| 2026 | 2025 | |
| £000 | £000 | |
Gain on derecognition of property | 981 | – |
Finance income on the lease receivable | 72 | – |
Income relating to variable lease payments not included in the measurement of the net investment in the lease | – | – |
At commencement of the finance lease, a gain of £981,000 was recognised in the
Consolidated Statement of Comprehensive Income under Investment property valuation
movements. This represented the difference between the investment property fair value
at March 2025 and the initial lease receivable amount at commencement of the lease of
£3.4 million. Amounts are considered for impairment using the lifetime expected credit loss
method. The impairment on this balance was assessed as not significant as at 31 March 2026.
16. Accounts receivable
| 2026 | 2025 | |
| £000 | £000 | |
Tenant debtors (net of provisions for bad debts) | 2,837 | 3,034 |
Lease incentives | 19,650 | 21,087 |
Other debtors | 1,629 | 1,001 |
24,116 | 25,122 |
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 2026, tenant debtors of £45,000
(2025: £105,000) were considered impaired and provided for.
17. Cash and cash equivalents
| 2026 | 2025 | |
| £000 | £000 | |
Cash at bank | 17,287 | 20,771 |
Short-term deposits | 25,972 | 14,549 |
43,259 | 35,320 |
Cash at bank 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.
| 2026 | 2025 | |
| £000 | £000 | |
Accruals | 7,883 | 5,622 |
Deferred rental income | 3,950 | 5,822 |
VAT liability | 560 | 2,715 |
Trade creditors | 398 | 658 |
Other creditors | 6,511 | 5,231 |
19,302 | 20,048 |
Notes to the Consolidated Financial Statements continued
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| 2026 | 2025 | ||
| Maturity | £000 | £000 | |
| Current | |||
Aviva facility | – | 1,633 | 1,564 |
Loan arrangement costs | – | (285) | (176) |
1,348 | 1,388 | ||
| Non-current | |||
Canada Life facility | 24 July 2031 | 129,045 | 129,045 |
Aviva facility | 24 July 2032 | 77,394 | 79,027 |
Loan arrangement costs | – | (1,174) | (919) |
205,265 | 207,153 | ||
206,613 | 208,541 |
| 2026 | 2025 | |
| £000 | £000 | |
Balance at start of year | 208,541 | 226,134 |
| Changes from financing cash flows | ||
Proceeds from loans and borrowings | – | – |
Repayment of loans and borrowings | (1,564) | (17,897) |
Loan arrangement costs paid | (512) | – |
| Other changes | (2,076) | (17,897) |
Amortisation of financing costs | 298 | 304 |
Accrued financing costs | (150) | – |
148 | 304 | |
Balance as at 31 March | 206,613 | 208,541 |
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Notes to the Consolidated Financial Statements continued
| 2026 | 2025 | |
| £000 | £000 | |
| Authorised: | ||
Unlimited number of ordinary shares of no par value | – | – |
| Issued and fully paid: | ||
513,827,021 ordinary shares of no par value (31 March 2025: 536,400,000) | – | – |
Share premium | 164,400 | 164,400 |
| 2026 | 2025 | |
| Number of shares | Number of shares | |
Ordinary share in issue – opening balance | 536,400,000 | 547,605,596 |
Shares cancelled in the year | (22,572,979) | (11,205,596) |
Ordinary shares in issue – closing balance | 513,827,021 | 536,400,000 |
Number of shares held in Employee Benefit Trust | (3,119,446) | (2,942,959) |
510,707,575 | 533,457,041 |
22. Adjustment for non-cash movements in the cash flow statement
| 2026 | 2025 | |
| £000 | £000 | |
Movement in investment property valuation | (6,561) | (12,859) |
Loss/(profit) on disposal of investment property | 999 | (1,496) |
Revaluation of owner-occupied property | – | (128) |
Profit on disposal of property, plant & equipment | (40) | – |
Share-based provisions | 744 | 751 |
Depreciation of tangible assets | 95 | 135 |
Depreciation of right of use asset | 125 | – |
(4,638) | (13,597) |
23. Obligations under leases
Lease liabilities are presented in the Consolidated Balance Sheet as follows:
| 2026 | 2025 | |
| £000 | £000 | |
| Current | ||
Occupational lease liability | 160 | – |
Head lease liability | 116 | 115 |
276 | 115 | |
| Non-current | ||
Occupational lease liability | 935 | – |
Head lease liability | 2,544 | 2,558 |
3,479 | 2,558 | |
3,755 | 2,673 |
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.
In September 2025 a new occupational lease was entered into in respect of the Group’s
head office. The lease is for a ten-year term, with the option to break at the end of five years.
Notes to the Consolidated Financial Statements continued
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23. Obligations under leases continued
Lease liabilities in respect of rents payable on the occupational lease and head leases are
as follows:
2026 | 2025 | |||
| Occupational | Occupational | |||
| Head lease | lease | Head lease | lease | |
| £000 | £000 | £000 | £000 | |
| Future minimum payments due: | ||||
Within one year | 185 | 228 | 185 | – |
In the second to fifth years inclusive | 740 | 1,041 | 740 | – |
After five years | 8,342 | – | 8,527 | – |
| Less: finance charges allocated to future | 9,267 | 1,269 | 9,452 | – |
periods | (6,607) | (174) | (6,779) | – |
| Present value of minimum lease | ||||
payments | 2,660 | 1,095 | 2,673 | – |
For interest expense in relation to lease liabilities, refer to Note 8.
| 2026 | 2025 | |
| £000 | £000 | |
Within one year | 39,774 | 44,938 |
One to two years | 37,417 | 38,906 |
Two to three years | 34,439 | 35,263 |
Three to four years | 31,086 | 31,903 |
Four to five years | 27,210 | 28,594 |
After five years | 138,282 | 135,958 |
308,208 | 315,562 |
24. 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 21.
| Held at fair | ||||
| value through | Amortised | |||
| profit or loss | cost | Total | ||
31 March 2026 | Notes | £000 | £000 | £000 |
| Financial assets | ||||
Debtors | 16 | – | 4,466 | 4,466 |
Cash and cash equivalents | 17 | – | 43,259 | 43,259 |
– | 47,725 | 47,725 | ||
| Financial liabilities | ||||
Loans and borrowings | 19 | – | 206,613 | 206,613 |
Creditors and accruals | 18 | – | 14,792 | 14,792 |
– | 221,405 | 221,405 |
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Notes to the Consolidated Financial Statements continued
25. Financial instruments cont inued
| Held at fair | ||||
| value through | Amortised | |||
| profit or loss | cost | Total | ||
31 March 2025 | Notes | £000 | £000 | £000 |
| Financial assets | ||||
Debtors | 16 | – | 4,035 | 4,035 |
Cash and cash equivalents | 17 | – | 35,320 | 35,320 |
– | 39,355 | 39,355 | ||
| Financial liabilities | ||||
Loans and borrowings | 19 | – | 208,541 | 208,541 |
Creditors and accruals | 18 | – | 11,511 | 11,511 |
– | 220,052 | 220,052 |
26. Risk management
The Group invests in commercial properties in the United Kingdom. The following describes
the risks involved and the risk management framework applied by the Group. Senior
management reports regularly both verbally and formally in writing to the Board, and its
relevant Committees, to allow them to monitor and review all the risks noted below.
| 2026 | 2025 | |
| £000 | £000 | |
Total borrowings | 208,072 | 209,636 |
Gross assets | 751,653 | 764,640 |
Gearing ratio (must not exceed 65%) | 27.7% | 27.4% |
| 2026 | 2025 | |
| £000 | £000 | |
Total liabilities | 229,670 | 231,262 |
Less: cash and cash equivalents | (43,259) | (35,320) |
Net debt | 186,411 | 195,942 |
Total equity | 521,983 | 533,378 |
Net debt to equity ratio at end of year | 0.36 | 0.37 |
Notes to the Consolidated Financial Statements continued
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26. Risk management continued
| Held at fair | Financial assets | |||
| value through | and liabilities at | |||
| profit or loss | amortised cost | Total | ||
31 March 2026 | Notes | £000 | £000 | £000 |
| Financial assets | ||||
Tenant debtors | 16 | – | 2,837 | 2,837 |
Lease receivable | 15 | – | 8,927 | 8,927 |
Cash and cash equivalents | 17 | – | 43,259 | 43,259 |
– | 55,023 | 55,023 |
| Held at fair | Financial assets | |||
| value through | and liabilities at | |||
| profit or loss | amortised cost | Total | ||
31 March 2025 | Notes | £000 | £000 | £000 |
| Financial assets | ||||
Tenant debtors | 16 | – | 3,034 | 3,034 |
Cash and cash equivalents | 17 | – | 35,320 | 35,320 |
– | 38,354 | 38,354 |
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Notes to the Consolidated Financial Statements continued
26. Risk management continued
| Less than | More than | |||
| 1 year | 1 to 5 years | 5 years | Total | |
| 31 March 2026 | £000 | £000 | £000 | £000 |
Cash and cash equivalents | 43,986 | – | – | 43,986 |
Debtors | 4,466 | – | – | 4,466 |
Lease receivable | 75 | 302 | 8,550 | 8,927 |
Obligations under leases | (413) | (1,781) | (8,342) | (10,536) |
Fixed interest rate loans | (9,262) | (37,049) | (205,842) | (252,153) |
Creditors and accruals | (14,792) | – | – | (14,792) |
24,060 | (38,528) | (205,634) | (220,102) |
| 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 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) |
Notes to the Consolidated Financial Statements continued
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26. Risk management continued
| Less than | More than | |||
| 1 year | 1 to 5 years | 5 years | Total | |
| 31 March 2026 | £000 | £000 | £000 | £000 |
| Floating | ||||
Cash and cash equivalents | 43,259 | – | – | 43,259 |
| Fixed | ||||
Secured loan facilities | (1,633) | (7,294) | (199,145) | (208,072) |
Obligations under leases | (276) | (1,353) | (2,126) | (3,755) |
41,350 | (8,647) | (201,271) | (168,568) |
| 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) |
28. Events after the balance sheet date
A dividend of £4,852,000 (0.95 pence per share) was approved by the Board on 27 April 2026
and paid on 29 May 2026.
The revolving credit facility held with National Westminster Bank Plc has been extended
by a further 12 months to April 2029. The facility remains undrawn.
On 12 May 2026, a non-binding indicative all-share offer (‘Proposed Offer’) from
LondonMetric Property Plc and Schroder Real Estate Investment Trust Limited
was announced. The Company is engaging with all stakeholders, with negotiations
and due diligence ongoing.
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Notes to the Consolidated Financial Statements continued
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 2026 2025
EPRA earnings Earnings from core operational activities. £20.9m £22.8m
EPRA earnings
per share
EPRA earnings per weighted number of
ordinary shares. 4.0p 4.2p
EPRA net
reinstatement value
(NRV)
Assumes assets are never sold and aims to
represent the value required to rebuild the
entity. 111p 109p
EPRA net tangible
assets (NTA)
Assumes entities buy and sell assets, thereby
crystallising certain levels of deferred tax
liability. 102p 100p
EPRA net disposal
value (NDV)
Represents the shareholders’ value under a
disposal scenario. 107p 105p
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. 4.4% 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). 5.3% 6.2%
EPRA vacancy rate Estimated Market Rental Value (ERV) of
vacant space divided by ERV of the whole
portfolio. 15.7% 6.2%
EPRA cost ratio Administrative and operating costs (including
costs of direct vacancy) divided by gross
rental income. 35.2% 30.9%
Administrative and operating costs (excluding
costs of direct vacancy) divided by gross
rental income. 25.1% 21.9%
EPRA LT V Debt divided by market value of the property. 23.9% 24.5%
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.
2026
£000
2025
£000
2024
£000
Profit/(loss) for the year after taxation 25,854 37,323 (4,789)
Exclude:
Investment property valuation movement (6,561) (12,859) 26,757
Loss/(profit) on disposal of investment properties 999 (1,496) –
Revaluation of owner-occupied property – (128) (223)
Profit on disposal of property, plant & equipment (40) – –
Strategic Review costs 636 – –
EPRA earnings 20,888 22,840 21,745
Weighted average number of shares in issue (000s) 519,279 544,037 545,437
EPRA earnings per share 4.0p 4.2p 4.0p
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.
2026
£000
2025
£000
2024
£000
Balance sheet net assets 521,983 533,378 524,475
Purchasers’ costs 46,737 48,840 50,287
Fair value of debt – – –
Deferred tax – – –
EPRA NRV 568,720 582,218 574,762
Shares in issue (000s) 510,708 533,457 545,963
EPRA NRV per share 111p 109p 105p
EPRA BPR and Supplementary Disclosures (unaudited)
for the year ended 31 March 2026
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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.
2026
£000
2025
£000
2024
£000
Balance sheet net assets 521,983 533,378 524,475
Fair value of financial instruments – – –
Deferred tax – – –
EPRA NTA 521,983 533,378 524,475
Shares in issue (000s) 510,708 533,457 545,963
EPRA NTA per share 102p 100p 96p
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.
2026
£000
2025
£000
2024
£000
Balance sheet net assets 521,983 533,378 524,475
Fair value of debt 21,905 26,113 24,714
EPRA NDV 543,888 559,491 549,189
Shares in issue (000s) 510,708 533,457 545,963
EPRA NDV per share 107p 105p 101p
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.
2026
£000
2025
£000
2024
£000
Investment property valuation 700,795 723,145 744,640
Allowance for estimated purchasers’ costs 46,737 48,840 50,284
Gross up property portfolio valuation 747,532 771,985 794,924
Annualised cash passing rental income 36,995 42,339 44,745
Property outgoings (3,829) (443) (1,669)
Annualised net rents 33,166 41,896 43,076
EPRA net initial yield 4.4% 5.4% 5.4%
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).
2026
£000
2025
£000
2024
£000
EPRA NIY annualised net rents 33,166 41,896 43,076
Annualised cash rent that will apply at expiry of lease
incentives 6,113 5,857 3,947
Topped-up annualised net rents 39,279 47,753 47,02 3
EPRA ‘topped-up’ NIY 5.3% 6.2% 5.9%
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EPRA BPR and Supplementary Disclosures (unaudited)
continued
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.
2026
£000
2025
£000
2024
£000
Annualised potential rental value of vacant premises 8,832 3,426 5,276
Annualised potential rental value for the complete
property portfolio 56,355 55,650 57,578
EPRA vacancy rate 15.7% 6.2% 9.2%
EPRA cost ratio
The EPRA cost ratio reflects the overheads and operating costs as a percentage of the gross
rental income.
2026
£000
2025
£000
2024
£000
Property operating costs 3,369 2,629 3,075
Property void costs 4,132 3,887 4,122
Administrative expenses 7,137 7,100 7,219
Less:
Ground rent costs (207) (230) (257)
EPRA costs (including direct vacancy costs) 14,431 13,386 14,159
Property void costs (4,132) (3,887) (4,122)
EPRA costs (excluding direct vacancy costs) 10,299 9,499 10,037
Gross rental income 41,190 43,531 43,910
Less ground rent costs (207) (230) (257)
Gross rental income 40,983 43,301 43,653
EPRA cost ratio (including direct vacancy costs) 35.2% 30.9% 32.4%
EPRA cost ratio (excluding direct vacancy costs) 25.1% 21.9% 23.0%
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.
2026 2025
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 8,792 – 8,792 11,794 – 11,794
Tenant incentives 71 – 71 1,595 – 1,595
Other material non-allocated
types of expenditure – – – – – –
Total capital expenditure 8,863 – 8,863 13,922 – 13,922
Conversion from accrual to
cash basis (267) – (267) (1,266) – (1,266)
Total capital expenditure on
cash basis 8,596 – 8,596 12,656 – 12,656
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
2026
£000
Rental income from
like-for-like portfolio
2025
£000
Like-for-like
rental growth
£000
Like-for-like
rental growth
%
Industrial 23,951 23,875 76 0.3
Office 10,892 11,837 (945) (8.0)
Retail and Leisure 5,647 6,214 (567) (9.1)
Total 40,490 41,926 (1,436) (3.4)
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 £700.8 million (2025: £689.2 million).
EPRA BPR and Supplementary Disclosures (unaudited)
continued
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EPR A LTV
EPRA loan to value’s aim is to assess the gearing of the shareholder equity within a real
estate company.
2026
£000
2025
£000
2024
£000
Loans and borrowings 206,613 208,541 226,134
Less:
Cash and cash equivalents (43,259) (35,320) (19,773)
Net debt 163,354 173,221 206,361
Investment properties
(excluding head lease right of use asset) 680,062 698,620 721,997
Property, plant and equipment
(excluding right of use asset) 14 3,504 3,499
Net receivable
1
4,814 5,074 5,979
Total property value 684,890 707,198 731,475
EPRA LTV 23.9% 24.5% 28.2%
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.
2026
£000
2025
£000
2024
£000
Total borrowings 208,072 209,636 227, 533
Less:
Cash and cash equivalents (43,259) (35,320) (19,773)
Total net borrowings 164,813 174,316 207,760
Investment property valuation 700,795 723,145 744,640
Loan to value 23.5% 24.1% 27.9%
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.
2026
£000
2025
£000
2024
£000
Administrative expenses 7,773 7,100 7,219
Less:
Strategic Review costs (636) – –
Internalisation of company secretarial function – – (296)
Abortive corporate activity – – (194)
CFO transition costs (102) (234) (89)
Chair change – (87) –
Total 7,035 6,779 6,640
Average net asset value over the year 526,037 529,744 531,921
Cost ratio 1.3% 1.3% 1.2%
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EPRA BPR and Supplementary Disclosures (unaudited)
continued
Properties valued in excess of
£100 million
– Parkbury Industrial Estate, Radlett, Herts.
Properties valued between
£50 million and £80 million
– River Way Industrial Estate, River Way,
Harlow, Essex
Properties valued between
£30 million and £50 million
– Express Business Park, Shipton Way,
Rushden, Northants.
– Datapoint, Cody Road, London E16
Properties valued between
£20 million and £30 million
– Lyon Business Park, Barking, Essex
– Sundon Business Park, Dencora Way,
Luton, Beds.
– 50 Farringdon Road, London EC1
– Tower Wharf, Cheese Lane, Bristol
– Grantham Book Services, Trent Road,
Grantham, Lincs.
– The Business Centre, Molly Millars Lane,
Wokingham, Berks.
Properties valued between
£5 million and £10 million
– 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
Properties valued between
£10 million and £20 million
– 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
– Units 1 & 2, Western Industrial Estate,
Downmill Road, Bracknell, Berks.
– 401 Grafton Gate, Milton Keynes, Bucks.
Property Portfolio
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2026
2025 2024 2023 2022
Income statements
Net property income 35.8 37.7 37.9 36.3 35.4
Administrative expenses (7.8) (7.1) (7.2) (6.0) (5.7)
28.0 30.6 30.7 30.3 29.7
Net finance costs (7.8) (7.7) (8.9) (9.0) (8.5)
Income profit before tax 20.2 22.9 21.8 21.3 21.2
Tax – – – – –
Income profit 20.2 22.9 21.8 21.3 21.2
Property gains and losses 5.6 14.3 (26.8) (110.4) 129.8
Revaluation of owner-occupied property – 0.1 0.2 (0.8) 0.4
Debt prepayment fee – – – – (4.0)
Profit/(loss) after tax 25.8 37. 3 (4.8) (89.9) 147.4
Dividends paid 19.7 20.2 19.1 19.1 18.4
2026 2025 2024 2023 2022
Balance sheets
Investment properties 682.1 700.7 724.0 746. 3 830.0
Borrowings (206.6) (208.5) (226.1) (222.8) (216.8)
Other assets and liabilities 46.5 41.2 26.6 24.1 43.9
Net assets 522.0 533.4 524.5 547.6 657.1
Net asset value per share (pence) 102 100 96 100 120
EPRA net tangible asset per share (pence) 102 100 96 100 120
Earnings per share (pence) 5.0 6.9 (0.9) (16.5) 27.0
EPRA earnings per share (pence) 4.0 4.2 4.0 3.9 3.9
Dividends per share (pence) 3.8 3.7 3.5 3.5 3.4
Dividend cover (%) 103 113 114 112 115
Share price (pence) 76.9 71.7 65.2 69.3 98.3
All figures are in £ million unless otherwise stated.
Five-Year Financial Summary
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Glossary
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.
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.
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.
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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.
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.
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.
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).
SBTi (Science Based Targets Initiative)
A corporate climate action organisation that
enables companies and financial institutions
worldwide to play their part in combating the
climate crisis.
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.
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.
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.
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Glossary continued
Annual results announced 12 June 2026
Annual results posted to shareholders June 2026
June 2026 NAV announcement July 2026
Annual General Meeting September 2026
2026 half-year results to be announced November 2026
December 2026 NAV announcement January 2027
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
Independent auditor
KPMG Audit 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
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
Panmure Liberum Limited
Ropemaker Place, Level 12
25 Ropemaker Street
London
EC2Y 9LY
Stifel Nicolaus Europe Limited
150 Cheapside
London
EC2V 6ET
Property valuer
Knight Frank
55 Baker Street
London
W1U 8AN
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
Financial Calendar and Shareholder Information
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Picton Property Income Limited
Stanford Building
27A Floral Street
London
WC2E 9EZ
020 7628 4800
www.picton.co.uk