July 27, 2022
PICTON REAL ESTATE REVENUE LIMITED
(“Picton”, the “Company” or the “Group”)
LEI code: 213800RYE59K9CKR4497
Trading Update and Net Asset Value as of June 30, 2022
Picton Announces 2.0% Net Asset Value Increase for the Quarter Ended June 30, 2022.
- Net assets of £670.0 million (March 31, 2022: £657.1 million).
- NAV/EPRA NTA per share up 2.0% at 122.9 pence (March 31, 2022: 120.4 pence).
- Total return for the quarter of 2.8% (March 31, 2022: 7.6%).
- LTV of 22.3% (March 31, 2022: 21.2%).
- Increase in portfolio valuation on a like-for-like basis of 1.9% over the quarter.
- Completion of three small lettings, in the office and retail sectors, and renewal/redevelopment of three leases, all in the industrial sector, with a combined annual rent of £0.3m, 6% ahead of the March 2022 REV.
- Achieved an average increase of 12% over previous run-in rent through four rent reviews in the industrial and retail sectors, with a combined annual rent of £0.3m, or 14% ahead of the March 2022 REV.
- Bought a mixed-use multi-tenancy London active for £13.7 million.
- 91% occupancy rate, primarily reflecting existing vacancy in the acquisition above (March 31, 2022: 93%).
- Interim dividend of 0.875 pence per share declared for the period April 1, 2022 at June 30, 2022 and pay the August 31, 2022 (January 1, 2022 at March 31, 2022: 0.875 pence per share).
- Annualized dividend equivalent to 3.5 pence per share, generating a dividend yield of 3.8%, based on July 25, 2022 share price.
- Dividend coverage for the quarter of 103% (March 31, 2022: 103%).
Lena Wilson ECBPresident of Picton, commented:
“It is encouraging to have recorded another quarter of positive NAV growth. Looking forward, our conservative balance sheet and primarily fixed long-term credit facilities position us well to take advantage of opportunities arising from current market conditions.
Michael MorrisPicton’s general manager, said:
“We saw valuation gains in every sector of the portfolio. While we recognize that macroeconomic events are causing capital growth to slow in many markets, asset management initiatives and rental growth in a number of sub-sectors contributed to the overall positive result. We continue to watch the market carefully for opportunities to grow the portfolio. »
THIS ANNOUNCEMENT CONTAINS INITIAL INFORMATION FOR THE PURPOSES OF THE UK MARKET ABUSE REGULATIONS
For more information:
James Verstinghe020 7920 3150, [email protected]
Michael Morris020 7011 9980, [email protected]
Note to Editors
Picton, created in 2005, is a UK REIT. It owns and actively manages a diversified UK commercial property portfolio of £879 million, invested in 48 assets and with approximately 400 occupants (as at 30 June 2022).
Through an occupier-focused and opportunity-driven approach to asset management, Picton aims to be one of the best and most successful diversified UK 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 June 30, 2022 was £670.0 million, reflecting 122.9 pence per share, an increase of 2.0% in the quarter or 2.8% on a total return basis.
The net asset value attributable to ordinary shares is calculated according to IFRS standards and incorporates the independent market valuation in the June 30, 2022including income for the quarter, but does not include a provision for the dividend for this quarter, which will be paid in August 2022.
|June 30, 2022
|March 31, 2022
|Dec 31 2021
|September 30, 2021
|Net asset value per share||122.9p||120.4p||112.8p||105.0p|
*The valuation of investment properties is shown net of rental incentives and includes the value of owner-occupied properties.
The evolution of the net asset value can be summarized as follows:
|NAV at March 31, 2022||657.1||120.4|
|Movement of land values||13.3||2.0||2.5|
|Net income after tax for the period||4.9||0.7||0.9|
|NAV as of June 30, 2022||670.0||2.0||122.9|
A separate announcement was released today declaring a dividend of 0.875 pence per share for the period April 1, 2022 at June 30, 2022 (January 1, 2022 at March 31, 2022: 0.875 pence).
Dividend coverage for the quarter was 103% (March 31, 2022: 103%).
Total borrowings at June 30, 2022 amounted to £218.5 million, of which £4.9 million was drawn under the revolving credit facility and the balance drawn under the long-term fixed rate facilities. The net loan to value ratio, calculated as total debt less cash, as a proportion of gross property value, is 22.3% (March 31, 2022: 21.2%).
The weighted average maturity profile of the Group’s debt is approximately 9.3 years and the weighted average interest rate is 3.7%.
Picton has £45.1m available through its unused revolving credit facility.
On a like-for-like basis, the valuation of the portfolio increased during the quarter by 1.9% or £16.2m, with £1.1m of capital expenditure incurred across the portfolio during the quarter. of the period. Valuation movements during the quarter are shown below:
|Rest of UK||16.2%|
|London City and West End||7.0%|
|Inside and outside London||5.2%|
|Rest of UK||9.4%|
|Retail and Leisure||10.4%||2.8%|
|High Street – Rest of UK||2.1%|
Amid rising inflation and rising financing costs, there was upward pressure on yields in some subsectors, although this was offset by rental growth and portfolio activity.
The retail and leisure element of the portfolio saw the strongest growth, primarily reflecting lower returns from commercial warehouse assets. On a comparable basis, the valuation of our office portfolio increased by 0.7% during the quarter, mainly reflecting investments in assets. Occupational demand in the industrial sector remains strong with associated rental growth, which has led to positive performance and an increase in capital value, despite some small outward yield adjustments for low-yielding assets .
Charlotte Terracehammersmith road, London, W14 was acquired for £13.7million. This mixed use London block comprises four adjoining buildings, which total 28,500 square feet of office space and 4,400 square feet of retail space, spread over five floors. The property was redeveloped behind the front in 1990 and is Grade II listed, meaning there are no commercial rates payable on empty units. 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 square foot, which is below its estimated replacement cost . In order to support the rental process, work is underway to improve the occupants’ equipment.
Like a June 30, 2022, the portfolio had a net initial yield of 4.1% (assuming zero holding costs) or 4.3% (based on net income contracted) and a net return yield of 5.4%. The weighted average duration of the remaining leases, based on the headline rent, is 4.9 years.
Occupancy reduced to 91%, primarily reflecting existing vacancy in recent acquisition above.
The top ten assets, which represent 55% of the portfolio by capital value, are detailed below.
|Parkbury Industrial Estate, Radlett||Industrial||South East|
|River Way Industrial Estate, Harlow||Industrial||South East|
|Data Point, Cody Road, E16||Industrial||London|
|Lyon Business Park, Barking||Industrial||outer london|
|Stanford Building, Long Acre, WC2||Desk||London|
|Shipton Way, Rushden, Northants||Industrial||East Midlands|
|Angels Gate, City Road, EC1||Desk||London|
|Tower Quay, Cheese Lane, Bristol||Desk||South West|
|Sundon Business Park, Luton||Industrial||South East|
|50 Farringdon Road, EC1||Desk||London|
According to the MSCI Monthly UK Property Index, the total return for all properties was 3.6% for the quarter to June 2022against 5.5% in the previous quarter.
Capital growth was 2.5% (March 2022: 4.3%) and rental growth was 1.1% for the quarter (March 2022: 1.3%). A more detailed breakdown of the MSCI Monthly Digest is shown below:
MSCI Capital Growth
|Number of MSCI Segments|
|Quarterly growth||Positive growth||Negative growth|
MSCI rental growth
|Number of MSCI Segments|
|Quarterly growth||Positive growth||Negative growth|