Picton Property Income Ld Share Discussion Threads

[nickrl] 14/11/2022 19:20

@sky this statement suggest to me that 4% yield is as good as its going to get

"Our distribution is back to pre-pandemic levels and whilst we continue to keep the dividend level under review depending on further leasing progress and improved occupancy levels, we believe it is right to be prudent at this stage given the current economic backdrop"

Anyhow at least the miserly dividend is well covered at the cash level and could certainly be lifted up more especially as it looks like a decent income increase from locked in rent free periods expiring and stepups although above suggests they wont. You can also see how much voids can impact propcos with slight deterioration from 93 to 90% driving up void costs by 50% or another 0.5m.

Would like to see 5% to make me interested but doubt share price will drop back to that level anytime soon.

[skyship] 09/11/2022 08:59

Forgot that the NAV comparison is with Mar'22, not Jun'22. So the Q3 fall seems pretty much in line with others at c7%.

With the 10% fall in Industrials in October (CBRE stats); and with the weighting here at c53%, PCTN looking over-valued versus peers on their 25.6% discount and mere 4% yield.

[skyship] 08/11/2022 08:26

nick - I can edit the Header - but regrettably, not the Title!

[nickrl] 07/11/2022 23:18

@sky never got why this one is so supported with it low yield but with its high industrial weighting i can concur with your view that a reduced NAV should be expected although the correlation between REITs is never that good. No immediate debt issues to worry about and divi will be maintained so not sure it will be a valuable short.

Edit: would suggest the title "Undervalued, High-yielding Property Co..." isn't representative of today although i guess if you were in it 10 years ago its been worthy investment.

[skyship] 07/11/2022 15:55

Reckon these could be a good short ahead of Wednesday's Interims. The NAV unlikely to be much more than 113p, at which level the discount falls to 23%. Couple that with the yield of only 3.9% and PCTN looks certainly 10% over-valued versus peers.


free stock charts from uk.advfn.com

[speedsgh] 21/10/2022 12:22

Dividend Declaration -

Picton today announces an interim dividend payment in respect of the financial period from 1 July 2022 to 30 September 2022, maintained at 0.875 pence per share.

The dividend timetable is set out below:

Ex-Dividend Date - 3 November 2022
Record Date - 4 November 2022
Pay Date - 30 November 2022

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

[speedsgh] 15/9/2022 10:25

Bit more info on the recent Cheltenham acquisition rns...

Addington Capital sells re-purposed mixed-use block in Cheltenham -

[speedsgh] 27/7/2022 10:01

2.0% increase in NAV to 122.9p (31/3/22: 120.4p)...

Trading Update and Net Asset Value as at 30 June 2022 -

--------------------------

0.875p PID payable on 31/8...

Dividend Declaration -

Ex-Dividend Date - 4 August 2022
Record Date - 5 August 2022
Pay Date - 31 August 2022

[spectoacc] 26/5/2022 11:29

3.7% might seem like a very good rate in a few years ;)

But fair point, tho makes it all the more strange that PCTN held close to NAV for so long.

[nickrl] 26/5/2022 09:52

Sky they claim the average IR is now 3.7% mind you they paid out £4m to one of the lenders to amend terms. So disregarding that hit on cashflow they still have sufficient cash to up the divi by 10% but they haven't. Divi too low for me although its surprising how the REITS with heavy industrial weighting are still being treated like pariahs compared to logistics centric ones.

[skyship] 26/5/2022 09:25

120p! Great NAV rise. The problem with PCTN as I've often stated is that they failed to reschedule their debt, so continue to be saddled with another 9yrs of 4.2%. That is why the dividend yield is where it is; far lower than all their competitors.

[spectoacc] 26/5/2022 08:45

PCTN's a strange beast, "Look at us, we're going to be the consolidator, we're valued at only a few % below NAV".

Did no consolidating, now valued at the bog-standard 20% discount to 120p NAV.

Can understand some disconnect btwn NAVs & S/Ps with a possible recession looming, but the discounts to hugely rising NAVs is odd. ie they may well fall, but appear to be going a lot higher first.

PCTN now joined BCPT, BREI, SLI, SREI etc, in the "spoiled for choice" category.

[skyship] 23/5/2022 14:49

Finals this Thursday - NAV up to 110p perhaps...

[spectoacc] 16/5/2022 10:23

Looks a decent buy, who was the seller?

[speedsgh] 16/5/2022 10:17

Acquisition -

Picton has completed the freehold acquisition of Charlotte Terrace, Hammersmith Road, W14 for £13.7 million.

Charlotte Terrace comprises four adjoining buildings, which total 28,500 sq ft of office space and 4,400q ft of retail space, arranged over five floors. The property was redeveloped behind the façade in 1990 and is Grade II listed, meaning there is no business rates payable on void units.

The property is located close to Olympia, which is currently undergoing a £1 billion redevelopment delivering a new creative district, with a new theatre, entertainment venue, hotel, office, retail and leisure space, which will enhance the surrounding area.

The current annual rental income is £0.5 million equating to £34 per sq ft. The office space is let to seven occupiers and the retail space is let to two occupiers. This is expected to rise to over £1.1 million once the remaining units are leased. To improve occupancy, Picton will upgrade the offices and rollout SwiftSpace, its recently launched flexible lease offering.

The purchase price reflects a net initial yield of 3.3%, rising to over 8% once fully let and reflecting a low capital value of £417 per sq ft, which is below its estimated replacement cost.

The Company has funded the acquisition from existing cash resources.

Michael Morris, Chief Executive of Picton, commented:

“We have taken advantage of our diversified approach to invest in a mixed-use asset where we believe we can unlock significant income and value with our occupier focused asset management approach. In addition, we think this area will be significantly enhanced once the Olympia scheme is delivered over the next few years.”

[speedsgh] 27/4/2022 08:09

Dividend Declaration -

Picton today announces an interim dividend payment in respect of the financial period from 1 January 2022 to 31 March 2022, of 0.875 pence per share.

The dividend timetable is set out below:

Ex-Dividend Date - 12 May 2022
Record Date - 13 May 2022
Pay Date - 31 May 2022

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

[nickrl] 25/3/2022 10:02

speedsgh this illuminates how much deviation we are seeing on ERVs at the moment across many REITs, well the ones that like to give reasonable transparency on lease events, that indicates valuations ought to move up still when we get this qtrs NAV updates later into next month. After this qtr though i believe we will see start see some cooling off as the economy responds to the energy impact and reduced discretionary spending.

[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 -