17 September
2019
PICTON PROPERTY INCOME LIMITED
(“Picton”, the “Company” or the “Group”)
LEI: 213800RYE59K9CKR4497
PORTFOLIO
UPDATE
Picton (LSE: PCTN), is pleased to provide an update on the
portfolio following a period of significant activity since its June
NAV update.
Progress has been made across all sectors with the completion of
20 asset management initiatives including lettings, lease renewals,
regears and rent reviews. These have a combined annual rent of £2.4
million per annum and were agreed on average 4% ahead of the
June 2019 estimated rental values
(ERVs).
In addition, the Company has started to deploy the capital
raised in June, having completed two refurbishment projects, where
occupiers have been identified and terms agreed in principle.
Projects have commenced at a further seven assets, all of which are
aimed at enhancing occupancy and rental income.
A further update will be provided in the Company’s interim
results to 30 September 2019 which
are expected to be released in November.
Michael
Morris, Chief Executive of Picton, commented:
“We have been encouraged by the level of portfolio
activity over the traditionally quieter summer period, especially
given the current political backdrop. Since raising capital
to invest in the portfolio in June, we have made significant
progress on the identified projects and have already both attracted
and retained new and existing occupiers, improving the income
profile. We are continuing to invest in our portfolio and
unlock future opportunities to improve occupancy and rental
income.”
The principal activity across sectors is as follows: -
Industrial
At Parkbury in Radlett, two rent reviews were settled securing a
60% uplift to £0.4 million per annum, 11% ahead of the June ERV.
Following completion of its refurbishment, terms have been agreed
in principle to lease the final unit at the scheme.
At River Way in Harlow, a historic rent review was settled
securing an 11% uplift to £0.5 million per annum, which is in line
with the June ERV. A unit came back in July and terms have been
agreed in principle to up-size an existing occupier, who will
relocate from their current unit. Concurrently, this unit is
under offer to another occupier who is also up-sizing and taking an
additional unit.
At Nonsuch Industrial Estate in Epsom, an agreement to lease has
been signed with Topps Tiles to take a unit at a rent of £0.1
million per annum. This was achieved by surrendering a lease to
create a double unit. The letting was in line with the June ERV and
the lease will complete following refurbishment works.
At Swiftbox in Rugby, a 100,000 sq ft distribution unit came
back in July and works are on site for a comprehensive
refurbishment, which is due to complete before the end of the year.
The ERV is £0.6 million per annum.
Office
At Waterside House in Leeds, an agreement to lease the whole
building to a Government department was completed. They are
increasing their floor space by 50%, taking a new 10-year lease at
a rent of £0.3 million per annum, which is in line with the June
ERV. The lease will complete following refurbishment works, which
are progressing.
In a back-to-back transaction at Citylink in Croydon, a lease
over the entire west block that was due to expire in November 2019 was surrendered, with Picton
receiving £0.4 million. The building was simultaneously let to the
sub tenant (without requiring refurbishment) on a four-year lease,
subject to a mutual break, at a rent of £0.6 million per annum, 2%
ahead of the June ERV. The terms of the new lease, which has no
rent incentive, create an opportunity for Picton, without incurring
compensation costs, to facilitate a future redevelopment, taking
advantage of the site’s proximity to East Croydon
station.
At Trident House, St. Albans, in another back-to-back
transaction, a lease expiring in February
2022 on a small suite of offices was surrendered for a
premium of £0.1 million. It was then subsequently re-let (without
requiring refurbishment) at a rent of £0.1 million per annum, 8%
ahead of the June ERV.
At Atlas House in Marlow, following completion of the office
suite and common area refurbishment, terms have been agreed in
principle to lease the final office suite.
Ahead of future letting, projects are progressing at Chatham,
Manchester and Milton Keynes, all aimed at creating best-in-class
office and common area space.
Retail and Leisure
At the Crown & Mitre Hotel, Carlisle, a rent review was
settled, securing a 42% uplift in rent to £0.2 million per annum,
8% ahead of the June ERV. The lease has a further 12 years until
expiry.
At Scots Corner in Birmingham, a lease of the office upper floor
was renewed to a Government department, securing a minimum of five
years, at a rent of £0.1 million per annum, 1% ahead of ERV on the
May 2019 expiry date and with no rent
incentive.
At Fishergate, Preston, following lettings to JD Sports and
Tessuti, Slaters Menswear has entered into an agreement to lease
the whole of the first floor at a rent of £0.1 million per annum,
which is in line with the June ERV. The lease will complete
following refurbishment works.
At Angouleme Retail Park in Bury, refurbishment works are
ongoing to improve the external appearance of the units and common
areas which are due to complete in November. We have renewed
Argos’s lease for a further 10 years at a rent of £0.2 million per
annum, 16% ahead of the June ERV.
At Parc Tawe North, Swansea, works are on site to modernise the
unit exteriors, replace signage and upgrade the common areas.
Following completion of Lidl’s new lease, their fitting out works
are progressing ahead of their relocation by the end of the
year.
At Stanford House in Covent Garden, following receipt of
planning permission, contractor tender returns are awaited, which
will enable the works to be instructed with a view to achieving
practical completion in Q1 2020.
ENDS
For further information:
Tavistock
Jeremy Carey/James Verstringhe, 020 7920 3150,
james.verstringhe@tavistock.co.uk
Picton
Michael Morris, 020 7011 9980,
michael.morris@picton.co.uk
Note to Editors
Picton is a UK REIT established in 2005. It owns and actively
manages a £688 million diversified UK commercial property
portfolio, invested across 49 assets and with around 350 occupiers
(as at 30 June 2019). Through an
occupier focused, opportunity led approach to asset management,
Picton aims to be one of the consistently best performing
diversified UK focused property companies listed on the main market
of the London Stock Exchange.
For more information please visit:
www.picton.co.uk