Net Asset Value(s) & Interim Dividend
Picton Property Income Limited
25 April 2012
PICTON PROPERTY INCOME LIMITED (LSE: PCTN) - Net Asset Value as at
31 March 2012 and Interim Dividend
Picton Property Income Limited ("Picton" or the "Company"), the internally managed Investment Company with an income focused approach to the UK commercial property market, announces its Net Asset Value and Interim Dividend as at 31 March 2012.
· NAV per share 57 pence (December 2011: 60 pence).
· Net Assets of GBP 196.1 million (December 2011: GBP 207.9 million).
· 2.9% decrease in property portfolio valuation.
· Completed the letting of 50 Farringdon Road, EC1.
· Repayment of GBP 0.1 million of debt following asset sale.
· Enhancement of Central London exposure through Angel Gate, EC1 acquisition.
· Interim dividend declared of 1 pence per share.
Commenting, Nick Thompson, Chairman of Picton, said:
"In addition to managing our assets efficiently, our primary objective is to put in place new debt facilities during H1 2012 and this has been the focus of activity over the quarter. We have been encouraged by the feedback that has been received and the progress we have made in meeting this objective."
Michael Morris, Chief Executive of Picton Capital, said:
"Reflecting wider market conditions, our portfolio highlights have been Central London focused, having secured two new tenants at 50 Farringdon Road, completing the scheme. In addition, we have further enhanced our London exposure, which now represents just under a quarter of the portfolio by value, through the acquisition of two buildings at Angel Gate, consolidating our holdings at this asset."
NET ASSET VALUE
The unaudited Net Asset Value ('NAV') of Picton as at 31 March 2012 was GBP 196.1 million, reflecting approximately 57 pence per share and a decrease of 5.7% over the quarter.
The movement in Net Asset Value was primarily attributable to the underlying external property valuation movement which reduced by 2.9% over the quarter.
The NAV attributable to the ordinary shares is calculated under International Financial Reporting Standards ('IFRS'), which includes the marked to market value of the interest rate swap contracts.
This NAV figure incorporates the external portfolio valuation as at 31 March 2012. It includes income for the quarter and is calculated after the deduction of dividends paid prior to 31 March 2012, but does not include a provision for the quarterly dividend announced herein, which will be paid in May 2012.
The property portfolio will next be subject to an external valuation during June 2012 and the NAV per share, as at 30 June 2012, will be issued in July 2012.
A more detailed breakdown of the NAV is included within the Appendix.
DIVIDEND
The Company also announces an interim dividend of 1 pence per share in respect of the period 1 January 2012 to 31 March 2012. The dividend payment will be paid on 25 May 2012 to shareholders on the register on 11 May 2012. The ex-dividend date will be 9 May 2012.
REFINANCING & DEBT
During the period, the Company has further advanced its refinancing initiative, having sought formal proposals from a range of financial institutions. The Company has received positive feedback to this process and it remains the Company's intention to put in place new facilities during H1 2012. A further update will be provided in due course and, in the interim, the Company continues to remain compliant with all covenants within its existing debt facilities.
MARKET BACKGROUND
Against a backdrop of weak economic growth, the property market, according to Investment Property Databank, delivered a positive total return over the quarter of 0.9%, driven by income return only, with capital value movements of -0.8% being recorded. The monthly index reported negative capital value movements which accelerated in March to -0.31%, compared to -0.29% in February and -0.16% in January.
This is the fifth consecutive monthly fall on the Index and was negative across all three sectors (retail, office and industrial). Only Central London Offices, London Industrials and Central London Standard Retail delivered positive capital growth, with all other subsectors recording negative movements.
There was a marked differentiation between subsectors with the strongest being Mid-town and West End Offices, where capital values grew by 0.8%, whereas Rest of UK Shopping Centres values fell by 3.9%.
Within the wider market, vacancy rates increased marginally over the period from 9.7% to 10.1%. As such the Initial All Property yield has remained relatively constant since September 2011 at 6.2%.
The Investment Property Forum consensus forecasts, last published in February, indicate a total return for All Property of 1.6% in 2012, which is also lower than the preceding estimate in November of 4.5% and reflects a capital value movement of -4.6% for the year.
PORTFOLIO UPDATE
The underlying portfolio decreased in value by 2.9% on a like for like basis over the quarter. This was not consistent across all sectors with the London Office and Industrial portfolios showing positive growth, but the retail, regional office and leisure portfolios recording negative capital valuation movements as detailed below.
Of the Company's assets, 21 either maintained or enhanced in value, primarily driven by asset management or portfolio led initiatives. Equally there were declines in respect of 41 assets.
Over the period the Company saw four tenants enter administration or liquidation representing under 1% of the income. Occupancy rates decreased marginally to 91%.
Key transactions during the quarter include :-
Office
London, Farringdon EC1 - secured two tenants for remaining ground floor suites resulting in the property being fully let. One letting completed during the quarter and one following the quarter end.
London, Angel Gate, EC1 - Acquisition of two buildings, consolidating existing holding.
Belfast - Two lease renewals at ERV.
St Albans - Letting following refurbishment of the property at ERV.
Glasgow - Letting following refurbishment of the property.
London, Covent Garden WC2 - Active management surrender for 100% of outgoings to expiry, facilitating early refurbishment and marketing.
Industrial
Harlow - Removal of tenant break option securing further five years of income.
Epsom - Three lettings; estate now fully let.
Belfast - Letting ahead of ERV.
Luton - Lease renewal ahead of ERV.
As at 31 March 2012, the portfolio had a net initial yield of 7.0% and a net reversionary yield of 7.7%. The weighted average unexpired term (to first termination) was 6.8 years.
Appendix
Q1 NET ASSETS SUMMARY
The unaudited NAV is as follows:
|
|
31 Mar 2012 £m
|
31 Dec 2011 £m |
30 Sep 2011 £m |
30 Jun 2011 £m |
|
Investment properties * |
411.7 |
422.1 |
425.2 |
425.8 |
|
Other assets |
37.9 |
41.4 |
44.5 |
43.1 |
|
Other liabilities |
(17.0) |
(18.2) |
(18.5) |
(17.3) |
|
Borrowings: Securitised loan
Liquidity facility
Bank loan
Loan stock
ZDP's
|
(171.6)
(10.7)
(16.9)
(2.2)
(30.0) |
(171.6)
(10.7)
(17.0)
(2.2)
(29.5) |
(171.6)
(10.7)
(18.2)
(2.2)
(29.0) |
(171.6)
(10.7)
(20.1)
(2.3)
(28.5) |
|
Market value of interest rate swaps |
(5.1) |
(6.4) |
(8.2) |
(9.5) |
|
Net Assets |
196.1 |
207.9 |
211.3 |
208.9 |
|
Net Asset Value per share |
57p |
60p |
61p |
61p |
|
EPRA Net Assets |
201.2 |
214.3 |
219.5 |
218.4 |
|
EPRA Net Asset Value per share |
58p |
62p |
64p |
63p |
* The underlying property valuation is stated net of lease incentives.
The movements in the Net Assets can be summarised as follows;
|
|
Total |
Movement |
Per share |
|
|
£m
|
% |
Pence |
|
Net Assets at 31 December 2011 |
207.9 |
|
60 |
|
|
|
|
|
|
Movement in property values (realised and unrealised) |
(13.5) |
(6.5) |
(4) |
|
Movement in swap value
|
1.3 |
0.6 |
1 |
|
Net income for the period (after distributions) |
0.4 |
0.2 |
0 |
|
|
|
|
|
|
Net Assets at 31 March 2012 |
196.1 |
(5.7) |
57 |
PORTFOLIO COMPOSITION
The Company's current portfolio is structured as follows :-
|
Sector |
Weighting 31 March 2012 |
Like for Like Valuation Change |
|
|
|
|
|
Retail |
18.8% |
-7.6% |
|
Offices - Central/Greater London |
16.1% |
1.5% |
|
Offices - Rest of UK |
18.9% |
-6.9% |
|
Industrial |
34.8% |
0.9% |
|
Leisure |
4.2% |
-6.6% |
|
Retail Warehouse |
7.2% |
-3.7% |
|
Total |
100% |
-2.9% |
GEOGRAPHICAL WEIGHTINGS
|
Geography |
Weighting 31 March 2012 |
|
|
|
|
Central London |
15.7% |
|
Greater London |
8.0% |
|
South East |
30.5% |
|
South West |
3.9% |
|
East Midlands |
12.3% |
|
West Midlands |
4.2% |
|
Yorkshire & the Humber |
4.5% |
|
North West |
9.9% |
|
North East |
2.5% |
|
Scotland |
2.4% |
|
Wales |
5.6% |
|
Northern Ireland |
0.5% |
|
Total |
100% |
TOP TEN ASSETS
|
Asset
|
Weighting 31 March 2012 |
|
|
|
|
River Way Industrial Estate, Harlow |
7.9% |
|
Unit 5320 Magna Park, Lutterworth |
7.2% |
|
Stanford House, Long Acre, WC2 |
5.2% |
|
Phase II Parc Tawe, Swansea |
4.3% |
|
50 Farringdon Road, EC1 |
3.8% |
|
Angel Gate Office Village, City Road, EC1 |
3.5% |
|
Boundary House, Jewry Street, EC3 |
3.4% |
|
Colchester Business Park, Colchester |
3.4% |
|
Angouleme Way Retail Park, Bury |
2.9% |
|
1 Chancery Lane, WC2 |
2.6% |
|
Total |
44% |
For further information:
Tavistock Communications
Jeremy Carey/James Verstringhe, 020 7920 3150, jverstringhe@tavistock.co.uk
Picton Capital Limited
Michael Morris, 020 7628 4800, michael.morris@pictoncapital.co.uk
David Sauvarin
The Company Secretary
Northern Trust International Fund Administration Services (Guernsey) Limited
Trafalgar Court
Les Banques
St Peter Port
Guernsey
GY1 3QL
Tel: 01481 745529
Fax: 01481 745085
Note to Editors
Picton Property Income Limited* ('Picton') is an income focused, internally managed Investment Company listed on the London and Channel Islands Stock Exchanges. It was established in 2005 to invest both directly and indirectly in commercial property across the United Kingdom.
With Net Assets of GBP 196.1 million at 31 March 2012 and approximately 850 investors, 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.
*Picton Property Income Limited changed its name from ING UK Real Estate Income Trust Limited on 1 June 2011.
This information is provided by RNS
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