Acquisition

23 February 2016

PICTON PROPERTY INCOME LIMITED
(“Picton” or the “Company”)

PICTON MAKES INCOME ACCRETIVE MANCHESTER OFFICE ACQUISITION

Picton (LSE:PCTN), the property investment company, has acquired a high quality, fully let office building in Salford Quays, Greater Manchester for £17.6 million. After finance costs this transaction will increase the Company’s net income by approximately £0.9 million per annum, rising to £1.2 million per annum in April 2017. This reflects an increase in dividend cover of 5% and 7% respectively.

The property, known as Metro, Trafford Road, is located within Salford Quays, 2.5 miles west of Manchester city centre and close to the BBC’s home at Media City. Constructed in 2008, it comprises a 71,000 sq ft office building with a BREEAM “Excellent” rating and 228 car spaces. The location adjacent to the Exchange Quay tram link also provides excellent connectivity to the surrounding area.

The property is fully let to four tenants producing income of £1.15 million per annum, which will increase to £1.53 million per annum in April 2017, with an average lease length of 8.3 years to expiry (5.6 years to break). It is let off a low average rent reflecting £21.50 per sq ft, including the car parking spaces. 

The pricing reflects a net initial yield of 6.2%, rising to 8.3% in April 2017 and a capital value of under £250 per sq ft, which is close to the cost of construction.

The purchase was funded using proceeds from the disposal in November 2015 of a small low yielding retail unit and £15.8 million from Picton’s revolving credit facility. Following this acquisition the Company has over £87 million of uncharged assets and over £10 million of undrawn facilities still available.

Michael Morris, CEO of Picton Capital, commented: “This is a high quality office which will further enhance our portfolio. Recognising the growing importance of this location in both a micro and macro context, we are confident that this asset will make a positive contribution to both income and capital growth.”

Further details of the scheme can be found via the video presentation at http://goo.gl/JgtC3n
 

ENDS

For further information:

Tavistock
Jeremy Carey/James Verstringhe, 020 7920 3150, [e-mail]

Picton Capital Limited
Michael Morris, 020 7011 9980, [e-mail]

The Company Secretary
Northern Trust International Fund Administration Services (Guernsey) Limited
Trafalgar Court
Les Banques
St Peter Port
Guernsey
GY1 3QL

David Sauvarin, 01481 745001, [e-mail]



Note to Editors
Picton is an income focused property investment company listed on the London Stock Exchange. Picton can invest both directly and indirectly in commercial property across the United Kingdom.

With Net Assets of £408.8 million at 31 December 2015, the Company's objective is to provide shareholders with an attractive level of income, together with the potential for capital growth by investing in the principal commercial property sectors. www.picton.co.uk