Picton Prop Inc Ltd Net Asset Value as at 31 December 2019
03 Febrero 2020 - 1:00AM
UK Regulatory
TIDMPCTN
3 February 2020
PICTON PROPERTY INCOME LIMITED
("Picton", the "Company" or the "Group")
LEI: 213800RYE59K9CKR4497
Net Asset Value as at 31 December 2019
Picton announces its Net Asset Value for the quarter ended 31 December 2019.
Highlights during the quarter included:
NAV growth and strengthened balance sheet through debt reduction
* Net assets increased to GBP519.1 million (30 September 2019: GBP510.7 million).
* NAV/EPRA NAV per share rose 1.7% to 95.2 pence (30 September 2019: 93.6
pence).
* Total return for the quarter of 2.6% (30 September 2019: 1.6%).
* LTV reduced to 22.4% (30 September 2019: 24.5%).
Dividend declared
* Dividend of 0.875 pence per share declared and to be paid on 28 February
2020 (30 September 2019: 0.875 pence per share).
* Annualised dividend equivalent to 3.5 pence per share, delivering a
dividend yield of 3.5%, based on 30 January 2020 share price.
* Dividend cover for the quarter of 114% (30 September 2019: 114%).
Further valuation uplift driven by asset management
* Like-for-like increase in property portfolio valuation for the quarter of
1.4% (30 September 2019: 0.7%) driven primarily by industrial and regional
office sector gains.
* GBP3.3 million invested in over 10 refurbishment and repositioning projects.
* Secured an average increase of 11% against the September ERV from nine
lease events (renewals, regears and one rent review), with a combined
annual rent of GBP3.0 million.
* Completed nine lettings on average 3% ahead of the September ERV, with a
combined annual rent of GBP0.5 million.
* Agreed to pre-lease Shipton Way, Rushden, to Whistl UK Limited at an annual
rent of GBP1.6 million who will become the Company's largest single occupier
from October 2020, when the existing occupier vacates.
* Completed the disposal of an office building in Croydon for GBP18.2 million.
* Stable occupancy of 88% (30 September 2019: 88%).
Nick Thompson, Chairman of Picton, commented:
"We have delivered another positive uplift in net assets, whilst at the same
time reducing borrowings and increasing the amount available under our
revolving credit facilities to capitalise on any emerging opportunities."
Michael Morris, Chief Executive of Picton, commented:
"The asset management activity over the quarter, driven by a number of key
leasing and regear transactions, has delivered further growth. Our primary
focus is our refurbishment programme and corresponding leasing activity to
drive both income and value."
This announcement contains inside information.
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, established in 2005, is a UK REIT. It owns and actively manages a GBP685
million diversified UK commercial property portfolio, invested across 48 assets
and with around 350 occupiers (as at 31 December 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
NET ASSET VALUE
The unaudited Net Asset Value ('NAV') of Picton, as at 31 December 2019, was GBP
519.1 million, reflecting 95.2 pence per share, an increase of 1.7% over the
quarter, or 2.6% on a total return basis.
The NAV attributable to the ordinary shares is calculated under IFRS and
incorporates the independent market valuation as at 31 December 2019, including
income for the quarter, but does not include a provision for the dividend this
quarter, which will be paid in February 2020.
31 Dec 2019 30 Sept 2019 30 Jun 2019 31 Mar 2019
GBPmillion GBPmillion GBPmillion GBPmillion
Investment properties* 675.3 683.2 679.0 676.1
Other assets 16.4 19.5 17.0 15.8
Cash 21.9 17.1 21.6 25.2
Other liabilities (19.2) (22.0) (21.8) (23.0)
Borrowings (175.3) (187.1) (187.4) (194.7)
Net Assets 519.1 510.7 508.4 499.4
Net Asset Value per share 95.2p 93.6p 93.0p 92.7p
*The investment property valuation is stated net of lease incentives.
The movement in Net Asset Value can be summarised as follows:
Total Movement Per share
GBPmillion % Pence
NAV at 30 September 2019 510.7 93.6
Movement in property values 7.7 1.5 1.4
Net income after tax for 5.5 1.1 1.0
the period
Dividends paid (4.8) (0.9) (0.8)
NAV at 31 December 2019 519.1 1.7 95.2
DIVID DECLARATION
A separate announcement has been released today declaring a dividend of 0.875
pence per share in respect of the period 1 October 2019 to 31 December 2019 (1
July 2019 to 30 September 2019: 0.875 pence).
Post-tax dividend cover over the quarter was 114% (30 September 2019: 114%).
DEBT
In the period the Company repaid GBP11.8 million of debt. Its total borrowings at
31 December 2019 were GBP175.3 million, 96% of which is fixed under long-term
facilities, with the remainder at variable rates. The net gearing ratio,
calculated as total debt less cash, as a proportion of gross property value, is
22.4% (30 September 2019: 24.5%).
The weighted average debt maturity profile of the Group is approximately 9.8
years and the weighted average interest rate is 4.2%.
The Company has GBP41.5 million available under its revolving credit facilities.
PORTFOLIO UPDATE
Like-for-like, the portfolio valuation increased by 1.4% or GBP9.6 million,
including GBP3.3 million of capital expenditure across the portfolio during the
period. The industrial and regional office sectors delivered the strongest
growth, on the back of active management and proven rental growth. The London
office sector saw a slight increase and the retail and leisure sector valuation
declined over the quarter, principally impacted by continued weak sentiment in
the regional retail and retail warehouse sectors.
The sector weightings at 31 December 2019 and valuation movements over the
quarter are shown below:
Sector Portfolio Like-for-like
Weightings Valuation change
Industrial 48.9% 3.2%
South East 34.4%
Rest of UK 14.5%
Offices 32.8% 1.4%
London City and West End 4.2%
Inner and Outer London 5.7%
South East 11.5%
Rest of UK 11.4%
Retail and Leisure 18.3% (3.0)%
Retail Warehouse 7.3%
High Street - Rest of UK 4.3%
High Street - South East 4.9%
Leisure 1.8%
Total 100% 1.4%
As at 31 December 2019, the portfolio had a net initial yield of 4.6% (allowing
for void holding costs) or 4.8% (based on contracted net income) and a net
reversionary yield of 6.3%. The weighted average unexpired lease term, based on
headline rent, was 5.4 years.
Occupancy was maintained at 88%.
The top ten assets, which represent 52% of the portfolio by capital value, are
detailed below.
Asset Sector Location
Parkbury Industrial Estate, Radlett Industrial South East
River Way Industrial Estate, Harlow Industrial South East
Angel Gate, City Road, EC1 Office London
Stanford Building, Long Acre, WC2 Retail London
50 Farringdon Road, EC1 Office London
Tower Wharf, Cheese Lane, Bristol Office South West
Shipton Way, Rushden, Northants Industrial East
Midlands
Lyon Business Park, Barking Industrial Outer
London
30 & 50 Pembroke Court, Chatham Office South East
Colchester Business Park, Colchester Office South East
Key highlights in the quarter included:
Industrial
At Shipton Way, Rushden, we agreed to pre-lease the entire building to Whistl,
the UK's leading delivery management company. They will take a new 10-year
lease, subject to a break in 2025, at an annual rent of GBP1.6 million. They will
become the Company's largest single occupier from October 2020, when the
existing occupier vacates.
At Parkbury, Radlett, we extended a lease with the largest occupier on the
estate which was due to expire in November 2020. This secures a new 10-year
reversionary lease, subject to a break in 2025, with stepped rental increases
to GBP1.0 million per annum.
At Trent Road, Grantham, we extended a lease that was due to expire in 2023
until 2029, subject to a break in 2026, at GBP1.2 million per annum.
We let units in Barking, Epsom and Wokingham, for a combined GBP0.2 million per
annum, in line with the September ERV.
A lease was surrendered at Datapoint, London E16, and is currently being
refurbished along with the adjoining unit that came back on a lease expiry
during the period. We expect to secure new lettings at rents significantly
ahead of the previous passing rent and already have good interest. As a result
of this transaction, Picton received GBP0.2 million of additional income.
The GBP2.3 million refurbishment of the distribution unit in Rugby, our second
largest void, is due to complete in Q1 2020 and we have good interest.
Office
At Tower Wharf, Bristol we moved a break option due in August 2020, securing at
least another three years term certain. The rent review was agreed at the same
time, securing a 29% uplift to GBP0.4 million per annum, 4% ahead of the
September ERV.
At Waterside House in Leeds, following refurbishment works, we completed a
lease of the whole building with a Government department, securing 10 years
term certain at a rent of GBP0.3 million per annum, in line with the September
ERV.
We let units in Colchester, Glasgow and Marlow, for a combined GBP0.2 million per
annum, 4% ahead of the September ERV.
The GBP0.6 million refurbishment of the common areas and 4th floor at Metro,
Manchester is now complete, and we have already identified an occupier for the
vacant floor, subject to contract.
The sale of Citylink, Croydon, completed for GBP18.2 million. The 48,000 sq ft
detached office building, constructed in 1986, is let to RBS and Fairfield
School of Business. The building was sold with 10% vacancy and the potential
for vacant possession in 2022. The sale price reflects a net initial yield of
4.8% and was 3% ahead of the September 2019 valuation. The property was
acquired in 2005 for GBP9.1 million.
Retail and Leisure
At Parc Tawe in Swansea, Lidl relocated to the refurbished former Homebase and
we entered into an Agreement for Lease in respect of their old unit with Farm
Foods on a 15-year lease at a rent of GBP0.1 million per annum, in line with the
September ERV. The GBP0.4 million common area refurbishment works will complete
in Q1 2020.
The GBP0.7 million refurbishment of Angouleme Retail Park in Bury is due to
complete in Q1 2020 and we have good interest in one of the two vacant units.
The refurbishment of the retail and office accommodation at the renamed
Stanford Building in Covent Garden, is progressing as planned with completion
due in April 2020.
MARKET BACKGROUND
According to the MSCI Monthly Index, the All Property total return was 0.3% for
the quarter to December 2019, compared to 0.7% for the previous quarter.
Capital growth was -1.0% (September 2019: -0.6%) and rental growth was -0.2%
for the quarter (September 2019: 0.2%). A more detailed breakdown of the MSCI
Monthly Digest is shown below:
MSCI rental growth
Number of MSCI segments
Quarterly growth Positive growth Negative growth
Industrial 0.7% 7 -
Office 0.5% 9 1
Retail -1.7% - 20
All Property -0.2% 16 21
MSCI capital value growth
Number of MSCI segments
Quarterly growth Positive growth Negative growth
Industrial 0.7% 5 2
Office 0.3% 6 4
Retail -4.4% 1 19
All Property -1.0% 12 25
ENDS
END
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