Over the year to the end of March 2015, Picton Property Income’s net asset value climbed from 56p to 69p and its earnings per share grew from 10.4p to 15.4p. To give a total return of 27.4%. They maintained the dividend but this year will increase it by 10% to 3.3p per share [corrected from version where we said 10% increase had occurred this year – apologies]. The return to shareholders was 32%.
The property return for the period was 19%, 11% ahead of the return on the IPD index. the office and industrial sectors.
The portfolio’s capital value for the year grew by 14%. Regional office values rose by 22%, with London assets growing by 28%. Industrial values grew by 12% and retail and leisure by 4%. They bought £62m of properties during the year and sold £4m worth.
They cut gearing from 48% to 30%, partly as a consequence of a capital fund raising. The Board say they think at this point in the cycle they think their gearing should be closer to 35% and they expect it to rise modestly from here. Their new revolving credit facility will be used to repay their Zeros when these mature next year – they anticipate saving £1m per year from this.
At the same time Picton has announced the acquisition of two office buildings in Chatham, Kent for £19.05m, equivalent to an initial yield of 8.6%.
30 and 50 Pembroke Court comprise two attractive and well specified modern buildings of 35,000 sq ft and 51,000 sq ft respectively. They are prominently positioned on an established business park located in the Chatham Maritime office district, close to the A289, providing easy access to the A2 and M2 motorway, some 35 miles south east of central London. They are held by way of a 136 year ungeared leasehold interest.
They produce a diversified annual income of £1.74m reflecting an average rent of £20 per sq ft and are currently occupied by Canterbury Christ Church University, NHS Property Services and Vanquis Bank with an average weighted lease length to expiry of 9.1 years and to earliest termination of 2.9 years. The purchase price reflects a low capital value of £220 per sq ft, which is below the estimated cost of construction.
PCTN : Picton beats IPD and announces deal in Chatham