Picton Property Income Ld Share Discussion Threads

[speedsgh] 24/3/2022 07:26

Portfolio Update -

Picton provides a portfolio update, ahead of its annual results to be released in May 2022. Key transactions, recently completed include:

Retail & Leisure

In Long Acre, Covent Garden, Picton has let a flagship retail unit to an international fashion retailer for 10 years, subject to break. The rent of £0.5 million per annum is 22% ahead of the March 2021 ERV. The lease starts in May 2022 and the incentive package was less than one year’s rent. This was the Company’s single largest retail void.

Industrial

At Swiftbox, Rugby, Picton has let the unit to a logistics operator for 10 years, subject to break. The lease commenced the day after the existing occupier vacated. The new rent agreed at £0.7 million per annum is 11% ahead of both the previous passing rent and the March 2021 ERV. This was the Company’s largest lease event in the industrial sector, by passing rent, in 2022.

Office

At 180 West George Street, Glasgow, Picton has let a floor to an engineering consultancy for 10 years, subject to break. The rent agreed is £0.2 million per annum, 28% ahead of the March 2021 ERV. There is one remaining floor, which is under offer.

At 50 Farringdon Road, London EC1, Picton has extended a lease, due for expiry later this year. This was the Company’s largest lease event in the office sector, by passing rent in 2022, retaining £0.6 million per annum, which is 2% ahead of the March 2021 ERV. The transaction follows an upgrade of the heating and cooling system last year, transitioning from gas to electric, reducing carbon emissions from the building and upgrading the EPC from a D to a B.

Rent collection

Rent collection for the December quarter now stands above 99%.

Occupancy

Proforma occupancy has increased to 92% (December 2021: 91%)

Michael Morris, Chief Executive commented:

“This is evidence of positive portfolio activity across all sectors. In all these transactions we have created a good quality product through upgrading, repositioning and refurbishing assets which has made the portfolio more attractive to current and future occupiers. These transactions will have a positive valuation impact, improve occupancy and reduce void holding costs for the Group.”

[speedsgh] 10/2/2022 11:27

Picton acquires Mill Place, Gloucester from Robert Hitchins Ltd -

Robert Hitchins Ltd has completed the sale of Mill Place Industrial Estate in central Gloucester to UK REIT, Picton Property Income for £10.4 million reflecting a net initial yield of 6.1%.

The estate offers a range of 38 industrial, storage and office premises alongside the A430 Bristol Road totalling circa 365,000 sq ft on a 19-acre site. The 25 occupiers include Nuovo Deroma, Reuseaworld, Genesis Timber and Gloucester Carpets.

Robert Hitchins Ltd, based at Boddington, Gloucestershire, is one of the leading property developers and investors in the South West and South Wales.

Senior Asset and Development Manager John Jones said: “The sale of Mill Place to Picton will enable us to further reposition and modernise the commercial property portfolio via new development and investment acquisition.”

Picton, established in 2005, is an award-winning Real Estate Investment Trust (REIT) investing in UK commercial property. Its property portfolio consists of 46 assets in the industrial, office, retail and leisure sectors all over the UK.

It acquires, creates and manages buildings for around 350 commercial occupiers across a wide range of businesses. Last year it acquired the adjoining Madleaze Trading Estate in Gloucester for £13.1 million.

Its combined ownership now totals more than 29 acres, with 670,000 sq ft of warehouse and ancillary accommodation, with a site coverage of 52%.

Michael Morris, Chief Executive of Picton, commented: “We are pleased to have the opportunity to increase our ownership in Gloucester. By combining these two holdings, we have created a larger asset, providing our occupiers with greater choice and the potential to unlock further asset management opportunities.

“In the short term, we intend to improve and reposition the estate to broaden its appeal to new and existing occupiers, while also exploring longer term options to realise the full potential of this substantial city centre, canalside location.’

Picton Property were represented by Colliers International. Robert Hitchins Ltd were unrepresented.

[spectoacc] 09/2/2022 10:01

Agree BREI by far the most likely, portfolios closely aligned too. Maybe behind the scenes PCTN been comprehensively rebuffed and neither side chosen to go public.

But - PCTN been public enough, for long enough, to think they should have acted by now.

Boards do so like to keep their jobs - SEC a good example this morning.

[skyship] 09/2/2022 09:56

Hmm - would seem so. If there were any substance in Michael Morris' comments then surely they would have acted when discounts even wider than they are now. Though with BREI at 92.2p still on a 23.8% discount; perhaps remain a good target.

PCTN MCap @ £556m; BREI MCap @ £220m.

[spectoacc] 09/2/2022 08:53

Probably fair to say by now that PCTN are all talk, no trousers, when it comes to mergers.

[speedsgh] 04/2/2022 07:49

Seems like a decent acquisition. £2.79 psf seems fairly low so hopefully scope for increasing rent through asset management and redevelopment across both sites?

[speedsgh] 04/2/2022 07:45

Picton consolidates Gloucester industrial ownership -

Picton has completed the off-market acquisition of Mill Place Trading Estate in central Gloucester for £10.4 million.

The estate is located directly adjacent to the Madleaze Trading Estate, which Picton purchased in September 2021. It comprises 38 industrial units totalling 365,000 sq ft on a 19.1-acre site, located between Bristol Road and the Gloucester and Sharpness canal. Approximately 14 acres is freehold, and the balance is held leasehold.

The estate is let to 25 occupiers and the total net rental income is £0.68 million per annum, equating to a low rental rate of £2.79 per sq ft overall. 79,000 sq ft of space is currently vacant which will be upgraded or redeveloped prior to leasing. The purchase price reflects a net initial yield of 6.1%.

Picton’s combined ownership now totals over 29 acres, with 670,000 sq ft of warehouse and ancillary accommodation, with a site coverage of 52%. The average rental across leased property is £2.76 per sq ft and there is a further 100,000 sq ft of vacant accommodation that can be upgraded or redeveloped subject to occupational demand. The combined consideration is £23.5 million or £35 per sq ft.

The acquisition was funded using the revolving credit facility and the Company’s proforma LTV will increase to 22% post acquisition (December 2021: 21%).

Michael Morris, Chief Executive of Picton, commented:

“We are pleased to have the opportunity to increase our ownership in Gloucester. By combining these two holdings, we have created a larger asset, providing our occupiers with greater choice and the potential to unlock further asset management opportunities.

In the short term, we intend to improve and reposition the estate to broaden its appeal to new and existing occupiers, while also exploring longer term options to realise the full potential of this substantial city centre, canalside location.’

[speedsgh] 31/1/2022 13:03

Edison update forecasting NAV 114p for FYE 31/3/22 & NAV 117p for FYE 31/3/23 and the dividend rising to 3.60p (0.90p per qtr) in FY23...

Strong Q322 returns and dividend increase -

[nickrl] 27/1/2022 09:40

Solid performance and with so much industrial swamps any downside from rest of portfolio. Occupancy down 2 bp though maybe something to keep an eye on.

[speedsgh] 27/1/2022 07:36

Dividend Declaration and Increase -

Picton today announces an increased interim dividend payment in respect of the financial period from 1 October 2021 to 31 December 2021, of 0.875 pence per share.

This reflects a 2.9% uplift on the preceding quarter’s dividend of 0.85 pence per share and reinstates the dividend back to its pre-pandemic level.

The dividend timetable is set out below:

Ex-Dividend Date - 3 February 2022
Record Date - 4 February 2022
Pay Date - 28 February 2022

The dividend of 0.875 pence per share will be designated as a property income distribution (‘PID’).

[speedsgh] 27/1/2022 07:21

7.4% increase in NAV to 112.8p. Quarterly dividend reinstated to pre-Covid level of 0.875p (3.50p annualised). Perhaps surprisingly all new lettings/renewals for the quarter were below Sept 2021 ERV.

LfL valuation changes:
Industrial 10.4%
Offices -0.6%
Retail 3.3%

And another mention of acquisition aspiration...
"We are encouraged by the momentum in our asset management pipeline and our focus is on growing income and value further during 2022, through leasing and acquisition activity."

Net Asset Value as at 31 December 2021 -

Picton announces a 7.4% increase in Net Asset Value for the quarter ended 31 December 2021 and a further 2.9% dividend increase, restoring the dividend to its pre-pandemic level.

Financial Highlights

~ Net assets of £615.7 million (30 September 2021: £573.6 million).
~ NAV/EPRA NTA per share increased by 7.4% to 112.8 pence (30 September 2021: 105.0 pence).
~ Total return for the quarter of 8.2% (30 September 2021: 6.0%).
~ LTV of 20.8% (30 September 2021: 21.9%).

Operational Highlights

~ Like-for-like portfolio valuation uplift of 6.0% over the quarter.
~ Completed six lettings, across all sectors, with a combined annual rent of £0.2 million, 3% below the September 2021 ERV.
~ Renewed / regeared seven leases, predominantly in the office sector, with a combined annual rent of £0.6 million, 1% below the September 2021 ERV.
~ Secured an average increase of 22% against the previous passing rent from three rent reviews, all in the industrial sector, with a combined annual rent of £0.4 million which was in line with the September 2021 ERV.
~ Occupancy of 91% (30 September 2021: 93%).

Rent Collection

~ 98% of December 2021 rents have been collected or are expected to be received under monthly payment plans.
~ 98% of September 2021 rents have been collected.

Dividend increased by 2.9%, and returned to its pre-pandemic level

~ Increased interim dividend of 0.875 pence per share declared and to be paid on 28 February 2022 (30 September 2021: 0.85 pence per share).
~ Annualised dividend equivalent to 3.5 pence per share, delivering a dividend yield of 3.3%, based on 25 January 2022 share price.
~ Dividend cover for the quarter of 115% (30 September 2021: 122%).

Lena Wilson CBE, Chair of Picton, commented:

“The strength of NAV growth and underlying rent collection has given the Board confidence to restore the dividend to its pre-pandemic level, marking the fourth increase since it was reset at the start of the pandemic.”

Michael Morris, Chief Executive of Picton, commented:

“We have seen strong valuation performance this quarter, reflecting the improving demand in the market for assets such as ours. We are encouraged by the momentum in our asset management pipeline and our focus is on growing income and value further during 2022, through leasing and acquisition activity.”

[speedsgh] 12/1/2022 20:05

Mention of #BCPT #SREI #UKCM as possible targets for Picton...

Picton Property: We want to be part of consolidating UK Reits -

"With Covid-19 hopefully in the rear view mirror, with the caveat of omicron’s spread, Morris said Picton can now afford to be more outward looking. However, despite posting strong half-year results in November, he is not considering raising new equity this year and any acquisition of new property assets, or larger, more consolidating purchases, will be done by increasing Picton’s gearing, which is currently at just 17%."...

[skyship] 26/11/2021 16:39

Rock solid performance from PCTN. Market dn c3.3%; PCTN weakens to just under 98p then rallies to close 0.2p UP!

[speedsgh] 24/11/2021 13:10

First posted by SKYSHIP on the CP+ thread...



SKYSHIP - 23 Nov '21 - 15:33 - 1190 of 1193

Interesting interview with the CEO of PCTN. Last 2mins deals with thoughts of M&A in the sector.

[speedsgh] 10/11/2021 19:57

Thames River Capital (a subsidiary of BMO Asset Management, ultimate owner Ameriprise Financial, Inc.) have increased their holding from 4.9% to 8.4%...



EDIT: increase is probably as a result of this which is taken from a holdings rns for MCKS on 8/11:
"This disclosure is the result of Ameriprise Financial acquisition of BMO's EMEA Asset Management business effective 8th November 2021."

[spectoacc] 10/11/2021 15:13

It'd be share-for-share but at least you should end up with PCTN's smaller discount.

Lots of differences at individual asset level - particularly depending on any recent CapEx (something SLI seems to be good at - could they be PCTN's best pick?).

[nickrl] 10/11/2021 14:56

Some useful background in presentation

Industrial: Strongest capital growth London at 16.5%. Weakest South West at 8.9% with rental growth positive in all subsectors. Strongest Eastern at 4.8%. Weakest South West at 2.4%

Offices: Strongest capital growth Eastern at 3.5%. Weakest Scotland at -3.4% with all office rental growth 0.4%. Strongest Midlands & Wales at 2.1%. Weakest South East at -0.5%

Retail: Strongest capital growth Strongest Retail Warehouse Midlands & Wales at 8.7%. Weakest Retail Outer South East at -6.7% with all rental growth at -1.5% and negative in all subsectors bar one. Strongest Retail Warehouse London at 0.3%. Weakest Standard Retail Wales -6.7%.

Much as expected although each REIT reporting a variation thats not always consistent with any overall trend other than retail is under pressure outside of wharehouses, Offices looking like a mixed bag and Industrials still star player.

Divi too low for me but be happy if they want to buy any of the others off ne at above par.

[flyer61] 10/11/2021 14:05

Surely they will work with a BOD/management team and aim for an agreed deal. ie those in the trough get a new trough.. PCTN getting a good deal. Topped up AIRE this morning. MCKS seems down and out...but everything has it's price. SREI has some nice assets as does BREI. SLI seems to be in a rut. EPIC is defo in a hot sector...looking forward to 5.5P dividend and a nice revision upwards in the NAV.

[spectoacc] 10/11/2021 10:53

Really interesting, missed the M&A comment, thanks.

AIRE perhaps too - ahem - unique. Arguably EPIC too, but in an almost hot sector. HCFT another oddity.

PCTN def in the driving seat, a small discount to NAV. But what Boards would willingly give up their jobs/expense accounts?

Ideally a REIT with a small/no manager holding or influence, but perhaps with a large shareholder willing to exit - as happened at DRUM very recently (CREI got a bargain).

If they were going to do it, they may as well go large - agree BREI, SLI, SREI all candidates. BCPT at a fat discount and very large, but another probably too far in the "oddity" category - would expect PE more likely to take it, or one of the other West End REITs.

Only takes PCTN to do one deal to narrow the entire sector. Bring it on.

(Tho does the comment also suggest they'd look to merge with unlisted/UT funds?).

[skyship] 10/11/2021 09:08

Very interesting comments.

Surely suggests a bit of M&A en route. What will be their target?

PCTN has a MCap of £547m.

Possible targets:

# AIRE: £59m
# BREI: £203m
# EPIC: £162m
# HCFT: £44m
# MCKS: £205m
# SLI: £309m
# SREI: £250m

AIRE & HCFT seem to small

MCKS perhaps too office committed (67%)

EPIC discount perhaps insufficient at 13.5%

That leaves BREI, SLI & SREI

[speedsgh] 10/11/2021 07:27

Cracking results. NAV 105p (31/3/21: 97p). Total return of 10.2%. Dividend cover 121%. Dividend now at 97% of pre-pandemic level...

Half Year Results -

And some teasers...

"As we plan for the future, we continue to evaluate our options to grow the business and intend to actively pursue further accretive opportunities."...

... "Since the start of the pandemic, many UK listed commercial property companies have traded at an increased discount to their net asset values. This divergence in real estate equity pricing is more pronounced in some companies than others and we view the situation across the sector as unsustainable in the long-term. Combined with well-publicised issues in unlisted property funds, we believe there is an opportunity for the market to benefit from some consolidation in order to generate the economies of scale that can be achieved through the removal of duplicated management costs, improved liquidity and greater overall efficiency.

The combination of our track record, cost base and internalised structure, means we are well placed to create further shareholder value by increasing the size of our portfolio. We will continue to engage to facilitate growth in a way that is attractive for our shareholders and the wider market."

[skyship] 10/11/2021 07:22

Interims in the Header:
=======================

Picton announces its half year results for the period to 30 September 2021.

Strong financial results

* 8.6% increase in net assets to £574 million, or 105p per share
* Profit of £54.4 million
* EPRA earnings of £10.9 million
* Total return of 10.2%
* Shareholder return of 12.7%
* Dividend cover of 121%
* Dividend increased by 6.3% over the period
* Loan to value ratio of 22%

[skyship] 09/11/2021 08:58

Interims tomorrow...

[speedsgh] 22/10/2021 07:19

Dividend Declaration -

Picton today announces an interim dividend payment in respect of the financial period from 1 July 2021 to 30 September 2021, of 0.85 pence per share.

The dividend timetable is set out below:

Ex-Dividend Date - 4 November 2021
Record Date - 5 November 2021
Pay Date - 30 November 2021

The dividend of 0.85 pence per share will be designated as a property income distribution (‘PID’).

[speedsgh] 08/10/2021 12:48

Portfolio Update (8/10) -

Picton provides a portfolio update, ahead of its interim results to be announced on 10 November 2021.

In the quarter to 30 September 2021, the Company completed several asset management initiatives and lettings, as detailed below, adding £0.8 million per annum to the annualised rent roll, either in line or ahead of ERV.

Industrial

In Barking, it pre-let a 45,000 sq ft warehouse on a 15-year term, subject to landlord enabling works, which are due to complete this year. The new rent of £0.6 million per annum is 43% ahead of the previous passing rent and in line with the June ERV. The unit became vacant during the quarter.

Retail and Leisure

In Bury, it secured planning permission on a former retail warehouse unit to enable a pre-letting to JD Gyms on a ten-year term, subject to landlord enabling works. The rent of £0.15 million per annum is in line with the June ERV. Following the completion of this lease, the Company’s retail warehouse portfolio will be fully let.

In Huddersfield, it completed the sale of a non-core retail asset for £0.75 million, 7% ahead of the June valuation.

Office

In Glasgow, it completed the letting of the first floor at 180 West George Street for £0.2 million per annum, 4% ahead of the June ERV, for a term of five years.

In Chatham, it completed the letting of all the remaining space at 50 Pembroke Court to NatWest at £0.27 million per annum, 7% ahead of the June ERV, for a term of five years, subject to break.

Acquisition

In addition to these asset management initiatives, as announced on 1 October 2021, Picton has also acquired Madleaze Trading Estate in central Gloucester for £13.1 million. This will add £0.75 million per annum to the rent roll, with the potential to increase this further once the asset is fully let and rents are reset to current market levels.

Further detail will be provided in the interim results.

Michael Morris, Chief Executive, commented:

“These transactions will have a positive valuation impact and result in a further increase in occupancy and corresponding reduction in void holding costs across the portfolio. They also demonstrate the positive demand for our assets across all sectors and are further evidence that business activity is increasing.”