Picton Property Income Ld Share Discussion Threads

[speedsgh] 11/3/2015 09:39

Most welcome

[irenekent] 11/3/2015 08:38

Now growing dividends

[redsonning] 11/2/2015 17:08

One didn't need hindsight to appreciate that Picton was going upwards. The dividend cut made this clearer, since more was left in the company to grow net assets.

[lord gnome] 11/2/2015 16:32

Nope - that chart is a thing of beauty!

[johnroger] 11/2/2015 16:12

New high this month and still yielding over 4%
With the benefit of hindsight selling on a dividend cut is not always the right course of action!

[lord gnome] 20/10/2014 16:05

Excellent update today. NAV increasing, shares not overpriced at around current NAV. Divi stable and covered 125%. Rent roll increasing. Can we be far from a divi rise? A very nice little earner. Lots more to come here.

[cerrito] 23/7/2014 17:51

For me nothing newsworthy in today's announcement but for me a bit odd that it trades at a premium even though the occupancy rate is just 91%..though given that Boundary House and Angel Gate- whose occupancy is 80/79% is explained by refurbishment- influence the figures perhaps it is not as bad as it looks.
Cannot see myself buying but no plan to sell

[nickg2] 17/7/2014 06:09

Great acquisition! Good work!

[lord gnome] 10/4/2014 07:41

A very interesting and informative read, Sleepy. Thanks for the link.

[sleepy] 10/4/2014 00:02

Link to Random House warehouse brochure -

Most of building seems to date from 1982

Looks like seller was owned and/or managed by Goldman Sachs

[lord gnome] 08/4/2014 06:36

Yes, it did strike me as being a rather good purchase. There must surely be a story behind it. Distressed seller?

[skyship] 08/4/2014 05:42

Amazing that PCTN should be able to buy such a well tenanted asset on a yield of 8.2%! You have to wonder who sold it at that level...

======================================================
Picton acquires Random House Distribution Warehouse

Picton, the income focused investment company, has acquired a 335,000 sq ft East Midlands distribution warehouse, in Grantham, Lincolnshire for GBP11.48 million.

The property has good access to the UK road network, located immediately adjacent to the A1 North/South arterial route. The income is secured against The Random House Group Ltd (a Penguin Random House Company) for just under nine years and currently produces an annual rent of GBP1,000,000, equivalent to just under GBP3 per sq ft. The purchase price represents a net initial yield of 8.2% and capital value of GBP34 per sq ft.
======================================================

[speedsgh] 20/3/2014 13:03

Hi redsonning. Thanks for your reply. I've actually been invested in several of the comm prop inv trusts for quite some time so am relatively up-to-date with specifics. I was just trying to assess whether it is still attractive to add to existing holdings in the sector + if so, where the best opportunities currently lie. I approach this predominantly from a income perspective although am hopefully wise enough to understand that merely looking at the current dividend yield on offer is naive to say the least. My post was more an open scribbling of my initial thoughts, am not expecting anyone to do the research for me. Thought it might stimulate a bit of discussion on what is a relatively quiet thread. Your input is much appreciated.

[redsonning] 20/3/2014 12:29

Speeds....There are indeed answers to the questions you raise. But the issues involved are subtle and require detailed study of the accounts and ongoing information releases from each company. After that one then has to make a subjective assessment of whether the market slightly overvalues or undervalues each company in relation to the current underlying real parameters.
Because of this subjective element I don't think you will find anyone here being too definitive on the questions you raise because it will start to sound like advice.
However, I would very much encourage you to start this work of studying the companies in detail, because it will help you to take logical and considered decisions with regard to purchase and sale etc. For the propcos in particular, this is certainly within the realms of any reasonably intelligent and diligent investor (because the information is kept quite well up to date and is relatively clear in contrast to commercial trading companies) and you will find it worthwhile in the longer term to do this work.
Hope that helps a little.

[speedsgh] 18/3/2014 15:39

Trying to compare current value offered by the main comm prop inv trusts. Pls feel free to point out any errors. Pls forgive poor formatting.

Premium on PCTN seems to be considerably lower than peers. Why?
SLI yield considerably more attractive than peers. Why?

EPIC >>> NAV (31/12) >>> Current offer >>> +/- to NAV >>> Forecast div >>> Yield

FCPT >>> 105.3 >>> 119 >>> +13.0% >>> 6.00p >>> 5.0%
PCTN >>> 53.8 >>> 56.5 >>> +5.0% >>> 3.00p >>> 5.3%
SREI >>> 47.3 >>> 52.5 >>> +11.0% >>> 2.48p >>> 4.7%
SLI >>> 65.5 >>> 72.25 >>> +10.3% >>> 4.52p >>> 6.3%
UKCM >>> 73.1 >>> 79.8 >>> +9.2% >>> 3.68p >>> 4.6%

[skyship] 18/3/2014 14:55

I agree with all of that.

[redsonning] 18/3/2014 13:47

The indicators do indeed seem to suggest that the price is a full one in the short term, so maybe there will be some retrenchment. The issue is the usual one for investors in this situation - do we really believe that the upward run is substantially over, or do we think that this is just a retrenchment from a price which has got ahead of itself?
Those questions are much the same as the ones we are faced with in the wider market too, and indeed the pull back in propco prices is partly linked to the wider uncertainties.
My own view remains that, in the longer term, commercial property still remains an attractive asset.

[skyship] 18/3/2014 09:27

Well done those who held on; but the indicators are providing pretty clear signals that it is time to bank profits:

[redsonning] 22/1/2014 11:51

I again agree with you Lord Gnome! Those who sold out early have not fully appreciated the immense structural improvements made by this company, together with the impact of the recovering property market. It is hardly now surprising, yielding in excess of 5% with a more than covered dividend in a rising property market, that these shares trade at a premium. I shall also continue to hold.

[lord gnome] 22/1/2014 08:27

Decent update with good progress made. NAV rising as expected and a lot more to come as the property market recovers. The share price will track higher ahead of the NAV as the market will anticipate further NAV increases. Good market reaction this morning. Happy to continue to hold.

[kavnish] 10/1/2014 13:19

Chaps , it's not so difficult a lot of private investors have considerable portfolios built over time. mine is a small one built over time.

I generally wouldn't suggest doing something unless I did it myself. The fear of doing it is why managers charge ridiculous fees. The PCTN mgnmt presided over a disaster in terms of share price move. notice not a single cent of their own capital was at risk.

Any investor can pick either private or public markets and their is a time to do this. I also do this with SME businesses so have a good idea on this but as always people need to DYOR and manage their own capital themselves.

Public equities are only for my pension pot, I don't like the incentive structures for public equities. anagers carry no downside risk.

[lord gnome] 10/1/2014 08:55

Nope - for me to get involved in commercial property a a direct investment would mean putting all my eggs into one rather illiquid basket. I'll stick to my shares thank you.

[redsonning] 09/1/2014 23:40

Yes thanks davep4 - I've followed the whole thread and I am well aware of that comment. Just because he says it doesn't mean he's actually doing it! The risks of trying to manage a commercial property business yourself are huge, and whilst it's easy to point out the theory it would be potentially foolish to try it in practice. It is significantly less risky to take your interest in property through these kind of property trusts, which are well spread in top class properties and have experienced management and the clout to cope with this kind of market. Indeed just today we have seen FCRE report strong asset growth in the last quarter, with a consequent further rise in share prices filtering throughout the sector.
If one wants to be in property then residential buy-to-let is a more practical option for a small/medium property investor - I do that myself as it happens. But I would not get directly involved in the commercial property business.
I doubt whether anyone on this thread is doing so either, no matter what theory they advocate.

[davep4] 09/1/2014 18:58

redsonning see post 296:

"cash in go along to your nearby auction and pick up the real thing with no mgmt fees"

[redsonning] 08/1/2014 21:56

If I have it right, Kavnish is primarily saying that he finds equities other than Propcos more attractive right now. I presume he is not actually spending his time and money on direct commercial property.
By the way these particular managers have deserved reasonable reward "on the way down" as the management of Picton through the downturn has been extremely good. That is why they are still here now and why their shares have performed so well over the last year. A company of this size (nor any other in fact) does not run itself, especially when things are tough!