Picton Property reports stable net asset value

Picton Property Income reported a stable net asset value of £524.1m for the quarter ended 30 June on Wednesday, a slight decrease from £524.5m in the prior three months.

The London-listed company's net asset value per share dipped marginally by 0.1% to 96p, reflecting a steady total return of 0.9% for the period.

It said its property portfolio's resilience was highlighted by a 0.4% increase in like-for-like valuations, with industrial, warehouse, and logistics assets showing the most strength.

Picton said it continued to optimise its portfolio by reducing office exposure, completing a part-vacant asset disposal 2% ahead of its March valuation.

The company said it made significant strides in asset management, completing four transactions that were 7% above the March estimated rental value (ERV).

Those transactions included expansions for existing occupiers, securing an additional annual rent of £0.4m, and an early lease regear that guaranteed £1.6m in annual rent until 2039.

Picton also completed three new lettings in the industrial and office sectors with a combined annual rent of £0.5m, exceeding the March ERV by 7%.

Additionally, five lease renewals were completed across industrial, office, and retail sectors, resulting in a 45% increase in rent compared to previous rates, albeit 1% below the March ERV.

The firm also settled three rent reviews in the industrial sector, achieving a 45% increase over previous rents and 1% above the ERV at the review date.

Its board said the company’s operational success was further underscored by improved occupancy rates, which rose to 93% from 91% at the end of March, or 95% when excluding two assets earmarked for alternative uses.

Picton invested £1.9m into upgrading projects to enhance asset quality and improve environmental credentials, supporting occupier retention and attracting new tenants.

On the financial side, Picton reduced its total outstanding debt from £227.5m to £210.8m, and lowered its weighted average interest rate on debt to 3.7%.

The company's loan-to-value ratio (LTV) also improved, decreasing to 24.9% from 27.9% in the prior quarter.

Picton declared an interim dividend of 0.925p per share for the period from 1 April to 30 June, maintaining the annualised dividend equivalent of 3.7p per share.

That delivered a dividend yield of 5.5%, with a dividend cover of 102%, reflecting the recent dividend increase effective from May.

The dividend would be paid on 30 August.

“It is encouraging that, at a portfolio level, we have delivered a positive valuation movement for the quarter, the first since June 2022,” said chief executive officer Michael Morris.

“We have also been able to improve occupancy, with our industrial, warehouse and logistics assets continuing to support income growth.

“During the period we have reduced our office exposure through our alternative use repositioning strategy and used the proceeds to repay floating rate debt to reduce financing costs.

“We continue to invest in our portfolio, future proofing and upgrading assets to unlock value.”

At 1145 BST, shares in Picton Property Income were up 0.14% at 73p.

Reporting by Josh White for Sharecast.com.