RNS Number : 2554L
Picton Property Income Limited
28 July 2011
 



Picton Property Income Limited

 

28 July 2011                                                 

 

PICTON PROPERTY INCOME LIMITED (PCTN) - Net Asset Value as at 30 June 2011 and Interim Dividend

 

Picton Property Income Limited, a closed-end commercial property investment company, formerly known as the ING UK Real Estate Income Trust Limited, today reports its Net Asset Value and Interim Dividend as at 30 June 2011.

 

The unaudited Net Asset Value ('NAV') as at 30 June 2011 was GBP 208.9 million, reflecting approximately 61 pence per share. 

 

The Company also announces an interim dividend of 1 pence per share in respect of the period 1 April 2011 to 30 June 2011. The dividend payment will be made on 26 August 2011 to shareholders on the register on 12 August 2011. The ex-dividend date will be 10 August 2011.

 

At an underlying property level there has been a GBP 2.2 million increase in the property portfolio valuation, representing a like for like increase of 0.5% over the period. Despite this increase in the property valuation, the NAV remains broadly unchanged. This is primarily a reflection of capital expenditure over the period as a result of investment in a number of asset management initiatives which are expected to enhance value over time.

 

The NAV attributable to the Ordinary Shares is calculated under International Financial Reporting Standards ('IFRS'), which includes the marked to market value of the interest rate swap contracts.

 

This NAV figure incorporates the external portfolio valuation as at 30 June 2011.  It includes income for the current quarter and is calculated after the deduction of dividends paid prior to 30 June 2011, but it does not include a provision for the next quarterly dividend which will be paid in August 2011.

 

The unaudited NAV is as follows:

                       

                       

30 Jun

2011

£m

31 Mar

2011

£m

31 Dec

2010

£m

30 Sept

2010

£m

Investment properties *

425.8

425.6

424.3

422.6

Other assets

43.1

41.9

42.4

49.1

Other liabilities     

(17.3)

(16.2)

(15.6)

(18.2)

Borrowings: Securitised loan

      

                   Liquidity facility

      

                   RBS loan

 

                   Loan stock

 

                   ZDP's

 

(171.6)

 

(10.7)

 

(20.1)

 

(2.3)

 

(28.5)

(171.6)

 

(10.7)

 

(20.1)

 

(2.3)

 

(28.0)

(171.6)

 

(10.7)

 

(20.4)

 

(2.6)

 

(27.6)

(171.6)

 

(10.7)

 

(20.4)

 

(2.6)

 

(31.0)

Market value of interest rate swaps

(9.5)

(9.4)

(11.3)

(13.8)

Net Asset Value

208.9

209.2

206.9

203.4

Net Asset Value per share

61p

61p

60p

59p

EPRA Net Asset Value

218.4

218.6

218.2

217.2

EPRA Net Asset Value per share

63p

63p

63p

63p

* The underlying property valuation is stated net of lease incentives

The European Public Real Estate Association (EPRA) NAV ignores marked to market swap liability or gains and was GBP 218.4 million at 30 June 2011 moving from GBP 218.6 million as at 31 March 2011.

 

 

The movements in the NAV can be summarised as follows;

 

 


Total

Per share

movement


£m

Pence

%

NAV at 31 March 2011

209.2

61






Gains in property values (realised and unrealised )

 

1.2

0.5

0.5

Movement in swap value

 

(0.1)

-

-

Net income for the period  (after distributions)

(1.4)

(0.5)

(0.5)





NAV at 30 June 2011

208.9

61

-

 

 

An external valuer will next value the property portfolio during September 2011 and the NAV per share as at 30 September 2011 will be issued in October 2011.

 

 

 

Investment Manager Commentary 

 

 

BACKGROUND

 

According to the IPD Monthly Index, capital growth continues to remain subdued recording gains of 0.4% over the preceding three months. This is the fourth consecutive quarter where capital growth remained below 1.0%. Growth was strongest in the Office sector at 0.9%, Retail recorded 0.3% and Industrial         -0.1%.

 

Rental value growth has moved marginally back into positive territory over the quarter. The strongest growth was seen in the Office sector, driven by the Central London market, which recorded an uplift of 0.4%. Both the Retail and Industrial sectors saw negative rental value growth of -0.1% and -0.2% respectively.

 

According to IPD, occupancy rates continued to remain stable at 90%.

 

 

PORTFOLIO COMPOSITION

 

The Company's current portfolio is structured as follows :-

 

 

Sector

Weighting

30 June 2011



Retail

19.7%

Offices - Central/Greater London

14.2%

Offices - Rest of UK

20.9%

Industrial

33.5%

Leisure

4.5%

Retail Warehouse

7.2%

Total

100%



GEOGRAPHICAL WEIGHTINGS

 

Geography

Weighting

30 June 2011



Central London

14.3%

Greater London

7.4%

South East

30.8%

South West

4.7%

East Midlands

12.0%

West Midlands

4.6%

Yorkshire & the Humber

4.6%

North West

10.7%

North East

2.4%

Scotland

2.5%

Wales

5.5%

Northern Ireland

0.5%

Total

100%

 

 

TOP TEN ASSETS

 

Asset

 

Weighting

30 June 2011

Unit 5320 Magna Park, Lutterworth

6.8%

River Way Industrial Estate, Harlow

6.5%

Stanford House, Long Acre, WC2

4.9%

Phase II Parc Tawe, Swansea

4.2%

Colchester Business Park, Colchester

3.5%

Boundary House, Jewry Street, EC3

3.0%

Angouleme Way, Bury

3.0%

50 Farringdon Road, EC1

3.0%

1-3 Chancery Lane, WC2

2.7%

Crown & Mitre Complex, Carlisle

2.5%

Total

40.1%

 

 

PORTFOLIO UPDATE

 

The underlying portfolio saw an increase in value of 0.5% over the quarter, in line with the wider market. Central London exposure in particular was the primary driver of capital growth across the portfolio, albeit an improvement in income in the industrial sector further supported performance.

 

The Company completed two asset disposals over the period and exchanged contracts for the sale of a further three assets in Poole, St Leonards on Sea and Basildon for GBP 1.7 million, in line with valuation.

 

Over the quarter the Company completed ten lettings, seven lease renewals and four active management initiatives. The lettings will generate additional income in excess of GBP 220,000 per annum, following expiry of rent free periods.

 

During the quarter, a tenant for the Company's third largest rental void was identified at the Harlow asset.  Whilst terms were agreed prior to the quarter end, which set an enhanced rental tone for the Estate, the letting only completed following the quarter end.  The rental income is GBP 190,000 per annum.

At 50 Farringdon Road, London, EC1, the Company's largest rental void, good interest has been shown in its newly refurbished office scheme and it hopes to provide a more detailed update in the coming quarter.

As at the 30 June 2011 the portfolio had a net initial yield of 6.9% and a net reversionary yield of 7.8%. The occupancy rate remains stable at 90% and the average lease length is 7.6 years.

 

 

DEBT

 

The two assets disposed of by the Company over the quarter were charged against the RBS loan and GBP 1.8 million was used to repay debt following the quarter end.

 

The Company continues to make progress on its refinancing strategy and has started discussions with both existing and prospective lenders, in respect of its refinancing options.  Whilst this is at an early stage, initial discussions have been encouraging. Further updates will be provided during the course of 2011.

 

 

INTERNALISATION UPDATE

 

The Company continues to make good progress in respect of internalisation which will be fully effective by 31 December 2011. To reflect the change from IRET to PCTN, the Company's new website is now www.pictonproperty.co.uk and further updates will be provided during the year.

 

Picton Capital Limited, the Company's UK Investment Management subsidiary, has received conditional approval from the FSA in respect of its application to become a regulated entity.  It is expected that the conditions will be satisfied during the quarter.

 

In addition Picton Capital Limited has been consulting with the existing Investment Manager and affected staff under Transfer of Undertakings (Protection of Employment) Regulations 2006 and a further update will be provided in respect of the internalised team over the quarter.

 

Commenting, Nick Thompson, Chairman of the Company, said:

 

"Our key focus over the quarter has continued to be on enhancing income from our portfolio which has been demonstrated through the transactions which have been successfully completed. Our other priorities, namely internalisation and refinancing are progressing well and we will update shareholders as soon as we are able."

 

 

For further information:

 

All Enquiries

 

David Sauvarin

The Company Secretary

Northern Trust International Fund Administration Services (Guernsey) Limited

Trafalgar Court

Les Banques

St Peter Port

Guernsey

GY1 3QL

 

Tel:      01481 745529

Fax:     01481 745085

 

ING Real Estate Investment Management (UK) Limited

Helen Stott, 020 7767 5648 helen.stott@ingrealestate.co.uk

 

Financial Dynamics

Dido Laurimore, 020 7831 3113, dido.laurimore@fd.com 

Laurence Jones, 020 7831 3113, laurence.jones@fd.com

 

Picton Capital Limited

Michael Morris, 020 7628 4800, michael.morris@pictoncapital.co.uk 

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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