Picton Prop Inc Ltd Trading Update

 
TIDMPCTN 
 
20 April 2023 
 
                        Picton Property Income Limited 
                          ("Picton" or the "Company") 
                           LEI: 213800RYE59K9CKR4497 
 
                                Trading Update 
             Asset Management progress and stabilising valuations 
 
Picton provides a trading update ahead of its full year results, to be released 
on 25 May 2023. 
 
Valuation 
 
The independent valuation of the Group's property portfolio as at 31 March 2023 
was £766.2 million, reflecting a 1.2% decline relative to 31 December 2022. 
 
This compares with the recently released MSCI UK Monthly Property Index which 
shows that All Property Capital Growth over the first three months of the year 
was -1.2%. This represents a significant improvement relative to the prior 
period and reflects stabilisation following the marked repricing after the 
September 2022 mini budget. Specifically, the MSCI Index has shown positive 
Capital Growth movements in March in both the industrial and retail sectors, 
for the first time since June 2022. 
 
Rent collection 
 
Rent collection remains consistently strong at 99.8%, for the last quarter. 
 
Occupancy 
 
Occupancy has improved to 91% (from 90% at 31 December 2022) following several 
leasing transactions offsetting space which has become available. 
 
Portfolio activity 
 
Activity over the three months included 19 lease renewals and extensions, 15 
lettings, eight rent reviews and six surrenders. Key highlights over the 
quarter include:- 
 
Capturing rental growth in the industrial sector 
 
At Parkbury Industrial Estate, Radlett, an existing occupier was upsized, with 
two leases extended from 2025 to 2030 and the rent increased by 46% from £0.4 
million to £0.6 million per annum, effective January 2025. In addition, Picton 
has pre-leased a unit which will become vacant in 2024, increasing the passing 
rent by 60% to £0.2 million per annum. Rents were in line with the December 
ERV. 
 
At Riverway Industrial Estate, Harlow, an occupier has agreed to take an 
additional unit which became vacant at the end of 2022, after completion of 
upgrading works by Picton, including the installation of solar panels. Their 
rent increases from £0.3 million to £0.7 million per annum, which is in line 
with the December ERV. 
 
At Madleaze Trading Estate, Gloucester, a rent review has been agreed with the 
largest occupier, increasing the rent by 29% to £0.3 million per annum, which 
is 23% ahead of the ERV at the time of acquisition in 2021. Elsewhere on the 
estate, two leases were renewed and separately occupier break options were 
removed in a further two leases, securing income until 2029. These transactions 
resulted in a combined uplift on the previous passing rent of 52% to £0.3 
million per annum, 5% ahead of the December ERV. 
 
Repositioning office assets 
 
In response to market conditions, Picton is exploring higher value alternative 
uses at several office assets. Further details will be provided as these 
progress, but specifically at Angel Gate, London, EC1, Picton has used 
permitted development rights to secure residential use at this part vacant 
office scheme. Consent has been secured across seven buildings, totalling 
17,760 sq ft, with the potential to create 19 residential units. In addition, 
applications are being progressed for residential use on another six buildings 
totalling 11,700 sq ft, creating a further 16 units. 
 
Maintaining high retail occupancy 
 
At Parc Tawe, Swansea, a lease has been renewed to a national retailer. The new 
rent is £110,000 per annum and is 10% above the December ERV but 17% below the 
previous passing rent. 
 
At Gloucester Retail Park, a rent review was settled on one unit, increasing 
the rent by 30% to £78,000 per annum, 8% ahead of the December ERV. 
 
In Cheltenham, a lease to a local retailer has been surrendered, securing a 
premium payment and a new letting to a national retailer has been agreed. This 
increases the passing rent by 6% to £45,000 per annum which is 1% ahead of 
December ERV. 
 
A small retail unit has been leased to a local retailer at Charlotte Terrace, 
London, W10, for £25,000 per annum in line with December ERV. 
 
Michael Morris, Chief Executive commented. 
 
'Our own independent valuation and the recent MSCI figures appear to indicate 
that the marked repricing seen at the end of last year has substantially run 
its course. In our portfolio increasing rents and rising rental values are 
having a positive valuation impact and offsetting some of the outward yield 
movement we have seen in recent months. Being able to improve occupancy and 
adapt our portfolio to changing market conditions is also encouraging.' 
 
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF THE UK MARKET 
ABUSE REGULATION 
 
For further information: 
 
Tavistock 
James Verstringhe, 020 7920 3150, [e-mail] 
 
Picton 
Michael Morris, 020 7011 9980, [e-mail] 
 
Note to Editors 
 
Picton, established in 2005, is a UK REIT. It owns and actively manages a £766 
million diversified UK commercial property portfolio, invested across 49 assets 
and with around 400 occupiers (as at 31 March 2023). 
 
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 
 
                                     ENDS 
 
 
 
END 
 
 

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April 20, 2023 02:00 ET (06:00 GMT)