20 October 2014
PICTON PROPERTY INCOME LIMITED
("Picton" or the "Company" or the "Group")
Net Asset Value as at 30 September 2014 and Interim Dividend
Picton (LSE: PCTN) announces its Net Asset Value for the quarter ended
30 September 2014 and Interim Dividend.
The highlights during the quarter included:-
* Net Assets increased to £273.7 million (30 June 2014: £258.9 million).
* NAV/EPRA NAV per share rose 5.7% to 62.3 pence (30 June 2014: 58.9 pence).
* Like-for-like increase in property portfolio valuation of 3.8% (30 June
* Average debt maturity of 12.9 years, with a weighted average interest rate
maintained at 4.5% per annum.
* Net gearing of 43.2% (June 2014: 40.2%), reflecting deployment of cash
proceeds during the quarter.
* Dividend of 0.75 pence per share declared and to be paid on 28 November
2014 (30 June 2014: 0.75 pence per share).
* Post tax dividend cover over the quarter of 125% (30 June 2014: 101%).
* Dividend yield of 4.7%, based on share price of 64 pence as at 30 September
2014, and 4.9% based on a share price of 61.5 pence on 17 October 2014.
* Further improvement in occupancy to 94% (June 2014: 92%).
* Completed 18 lettings adding £1.0 million per annum to the rent roll (before
* Acquisition of prime retail block in Peterborough for £9.1 million,
reflecting a net initial yield of6.5%.
* Acquisition of a 312,000 sq ft modern distribution warehouse in Rushden,
Northamptonshire for £20 million, reflecting a net initial yield of 7.7%.
Post Quarter Portfolio Activity
* Secured a resolution to grant planning permission for a foodstore and 70
residential units in Swindon.
* Strong pipeline of leasing transactions with over £0.75 million per annum
currently under offer.
Commenting, Nick Thompson, Chairman of Picton said:
"Against a backdrop of both improving investor and occupier markets, we have
delivered another quarter of strong NAV growth. We have successfully deployed
funds raised in May and with attractive deal flow coming throughwe are
considering continuing our placing programme to take advantage of further
Michael Morris, Chief Executive of Picton Capital,added:
"Picton is making substantial progress on asset management initiatives in an
improving market place generating further NAV growth. A key highlight for us
this quarter is our continued improvement in occupancy within the portfolio,
which has had a positive impact on portfolio valuation and NAV growth."
For further information:
Jeremy Carey/James Verstringhe, 020 7920 3150, email@example.com
Picton Capital Limited
Michael Morris, 020 7011 9980, firstname.lastname@example.org
The Company Secretary
Northern Trust International Fund Administration Services (Guernsey) Limited
St Peter Port
David Sauvarin, 01481 745001, email@example.com
Note to Editors
Picton Property Income Limited (´Picton´) is an income focused, property
investment companylisted on the London Stock Exchange. Pictoncan invest both
directly and indirectly in commercial property across the United Kingdom.
With Net Assets of £273.7 million at 30 September 2014 and approximately 850
investors, the Company´s objective is to provide shareholders with an
attractive level of income, together with the potential for capital growth by
investing in the principal commercial property sectors.
NET ASSET VALUE
The unaudited Net Asset Value (`NAV´) of Picton,as at 30 September 2014,was
£273.7 million, reflecting 62.3 pence per share, anincrease of 5.7% over the
The NAV attributable to the ordinary shares is calculated under International
Financial Reporting Standards and incorporates the external portfolio valuation
as at 30 September 2014,including income for the quarter, but does not include
a provision for the quarterly dividend announced herein, which will be paid in
The next independent valuation of the property portfolio is scheduled
for December2014 and the NAV per share, as at 31 December 2014, will be issued
in January 2015.
A detailed breakdown of the NAV is included within the Appendix.
An interim dividend of 0.75 pence per share is declared in respect of the
period 1 July 2014 to 30 September 2014 (1 April 2014 to 30 June 2014: 0.75
The dividend will be paid on 28 November 2014 to shareholders on the register
on 14 November 2014. The ex-dividend date will be 13 November 2014.
Post-tax dividend cover during the quarter was 125%.
The Group´s debt has a weighted average interest rate of 4.5%, of which 99% is
fixed with a weighted average debt maturity profile of approximately 12.9 years.
As at 30 September 2014, net gearing, calculated as total debt, including ZDPs,
less cash, as a proportion of gross property value, was 43.2% (30 June 2014:
On 1 May 2014 the Company announced an Initial Offer, Offer for Subscription
and Placing Programme.
Following receipt of shareholder approval to this transaction, the Initial
Offer and Offer for Subscription were oversubscribed and the Company raised
gross proceeds of £35 million, at an issue price of 59 pence per share or a
4.7% premium to the March 2014 NAV. New shares were issued meaning that the
Company currently has 439,191,763 shares in issue as at 30 September 2014.
The proceeds raised have now been fully utilised. The Company has the ability,
through the Placing Programme, to continue to raise additionalproceeds up to £
65 million prior to May 2015. This is on the basis that any future fundraising
is undertaken on a non dilutive basis to existing shareholders.
Further details are contained within the Prospectus dated 1 May 2014 and
supplementary prospectuses dated 14 July 2014 and 4 August 2014.
According to the IPD Monthly Index, total returns in the quarter to
September 2014 were positive at 4.7% compared to 5.1% in June 2014. The income
return for the quarter to September 2014 was 1.5% and capital growth was 3.2%.
Across the principal IPD sectors, office values rose by 4.0% (June 2014: 4.7%),
industrial by 3.9% (June 2014: 4.1%) and retail by 2.4% (June 2014: 2.5%). For
the second consecutive quarter, all of the 37 IPD segments recorded positive
capital growth movements. In terms of rental growth,30 segments recorded
positive rental growth in the quarter to September 2014 compared to 23 in June.
The occupancy rate in the September IPD Monthly Index was 90.5% (June 2014: 90.1%).
Most noticeable progress over the quarter was the improvement in occupancy to
94%, from 92% in the preceding quarter. Positive valuation uplifts were seen
across all sectors (as further detailed in the Appendix).
As at 30 September 2014, the portfolio had a net initial yield of 6.3%
(allowing for void holding costs) or 6.4% (based on contractual net income) and
a net reversionary yield of 7.3%. The weighted average unexpired term (to first
termination) was 6.4 years.
Key highlights over the quarter were as follows:-
The Group acquired 312,000 sq ft of modern warehouse accommodation in Rushden,
Northamptonshire for £20 million. The property has good access to the UK road
network, located immediately adjacent to the A45, so providing access to the
M1, A14 and A1(M). The income is secured against Belkin Limited until 2020 and
currently produces an annual rent of £1.63 million, equivalent to £5.23 per sq
ft. The purchase price represents a net initial yield of 7.7% and a capital
value of £64 per sq ft.
In Radlett, a further two units have been let securing £212,600 per annum, 9.6%
above ERV. There is now only one vacant unit on the estate and terms have been
agreed, subject to contract, to let it to a national retailer.
Middleton Trade Park is now fully let, following two units being leased at
£25,500 per annum after incentives, 8.5% above ERV. In Epsom, a further unit was
let adding £35,000 per annum which was in line with ERV.
At Easter Court in Warrington, unit 5 was let on a five year lease at £41,000
per annum, 7% above ERV and we have agreed terms to relocate a occupier into a
larger unit, which will leave only one small unit on the estate vacant.
The two suites under offer last quarter at Boundary House, EC3 are now let at a
combined rent of £183,000 per annum, 13% above ERV, setting a new rental tone
for the property of £36.50 per sq ft. The property is now fully let.
The letting of 24 Angel Gate has completed at a rent of £216,200 per annum,
circa 50% above ERV prior to the building being refurbished and setting a new
rental tone of £36.00 per sq ft on the estate. Two further lettings for £74,000
per annum mean we are now fully let with the exception of 28 Angel Gate, which
is being refurbished in a similar style to 24, with the works due to complete
by the end of this year.
In Colchester, we re-geared an office lease at Colchester Business Park,
extending it to 2024 at a initial rent of £151,500 per annum with a minimum
increase at the rent review in 2019 to £202,000 per annum.
Following the quarter end, we obtained a resolution to grant planning permission
for a foodstore and outline planning for a 70 unit residential scheme at
Westlea Campus in Swindon. Once the process is completed, Aldi will purchase
the land for the foodstore for £1.65million under an agreement entered into in
March. The remaining 4.4 acre site will be marketed to specialist residential
In respect of Citylink, Croydon the refurbishment of the remaining space is
progressing well and is expected to be completed later this month, and
encouragingly there is good occupier demand.
At Waterside House in Leeds, where 8,400 sq ft was vacant following a tenant
insolvency earlier in the year, we have agreed terms to let the space with
completion expected during the current quarter.
Retail / Leisure
In September, the Group acquired a freehold city centre retail property in
Peterborough, Cambridgeshire for £9.075 million, reflecting a net initial yield
of 6.5%. The property, which totals 89,000 sq ft, comprises two prime high
street retail units, with significant frontage to pedestrianised Bridge Street,
let to TK Maxx and New Look until 2020 and 2021 respectively. It produces an
annual rent of £625,000 reflecting a low average overall rent of £7.00 per
sq ft, which is subject to review in 2015 and 2016.
Last quarter, we reported that we had received planning permission to combine
four vacant retail units into one in Carlisle. Following this we have now
completed a letting to toy shop chain The Entertainer for 12 years at £65,000
per annum. During the period, we also agreed the June 2013 rent review on the
Crown and Mitre Hotel, increasing the rent by 23% to £137,500 per annum.
In September Phones4u at Broadmead, Bristol went into administration and
vacated the unit, which is being marketed. Phones4u accounted for less than
0.5% of the total portfolio income.
In Stockport, a unit which became vacant in March this year, is now let to
British Heart Foundation on a five year lease at £75,000 per annum, slightly
below ERV. The entire property is now fully let.
NET ASSETS SUMMARY
The unaudited Net Asset Value is as follows:
30 Sep 2014 30 Jun 2014 31 Mar 2014
£million £million £million
Investment properties * 487.1 441.3 417.6
Other assets 16.0 14.3 14.2
Cash 21.0 54.7 32.4
Other liabilities (16.2) (17.2) (16.0)
Borrowings: Loan facilities (207.2) (207.4) (207.7)
Loan stock (1.8) (2.0) (2.0)
ZDP´s (25.2) (24.8) (24.4)
Net Assets 273.7 258.9 214.1
Net Asset Value per share 62.3p 58.9p 56.4p
* The underlying property valuation is stated net of lease incentives.
The movements in Net Asset Value can be summarised as follows;
Total Movement Per share
£million % Pence
NAV at 30 June 2014 258.9 58.9
Movement in property values 14.0 5.4 3.2
Net income after tax for the 4.1 1.6 0.9
Dividends paid (3.3) (1.3) (0.7)
NAV at 30 September 2014 273.7 5.7 62.3
The Group´s current portfolio is structured as follows:-
Sector Weighting Like for Like
30 September 2014 Valuation Change
Industrial 42.2% 4.1%
Office - Central/Greater London 18.3% 5.2%
Office - Rest of UK 13.2% 5.6%
Retail 17.6% 1.3%
Retail Warehouse 5.8% 1.2%
Leisure 2.9% 1.3%
Total 100.0% 3.8%
30 September 2014
South East 33.1%
Central & Greater London 28.6%
South West 2.5%
Northern Ireland 0.4%
TOP TEN ASSETS
The top ten assets, which represent 49.5% of the portfolio by capital value,
are detailed below.
Asset Sector Location
Parkbury Industrial Estate, Industrial South East
River Way Industrial Estate, Industrial South East
Stanford House, Long Acre, WC2 Retail London
Angel Gate Office Village, City Office London
50 Farringdon Road, EC1 Office London
Boundary House, Jewry Street, Office London
Shipton Way, Rushden, Industrial East Midlands
Phase II Parc Tawe, Swansea Retail Warehouse Wales
Colchester Business Park, Office South East
1 Chancery Lane, WC2 Office London