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Equity Bottom-Up

Picton Property Income / Equity Bottom-Up

<p>Picton Property Income&rsquo;s 25 July NAV update showed that asset management initiatives have continued to add value through a series of new and renewed leases, as well as two asset disposals at 37% above their March 2017 valuations. Like-for-like valuations in the office and industrial sectors, representing 75% of the portfolio, rose over 2% and earnings of &pound;5.3m gave 1.16x dividend cover, also contributing to NAV gains. Management continues to execute the strategy of investing in and actively managing a regional property portfolio to provide rising income and increasing capital value.</p>

Picton Property Income&rsquo;s 25 July NAV update showed that asset management initiatives have continued to add value through a series of new and renewed leases, as well as two asset disposals at 37% above their March 2017 valuations. Like-for-like valuations in the office and industrial sectors, representing 75% of the portfolio, rose over 2% and earnings of &pound;5.3m gave 1.16x dividend cover, also contributing to NAV gains. Management continues to execute the strategy of investing in and actively managing a regional property portfolio to provide rising income and increasing capital value.

<p>Picton Property Income is an internally managed property company, which has assembled a &pound;624m portfolio diversified by sector, geography and also income concentration. Long-term performance has been strong; its portfolio has outperformed the MSCI quarterly benchmark in the last one, three, five and 10 years. It has also often exceeded its targeted geared IRRs of 10-15%. Last year&rsquo;s property return of 9.9% was more than double the benchmark. Improving occupancy, rental increases and falling interest costs from debt reduction in FY17 should underpin earnings growth in FY18-19, thereby supporting the dividend yield of over 4%. Despite this track record and yield, Picton trades at a discount to the sector average P/NAV, even after the share price recovery we have seen in the last year.</p>

Picton Property Income is an internally managed property company, which has assembled a &pound;624m portfolio diversified by sector, geography and also income concentration. Long-term performance has been strong; its portfolio has outperformed the MSCI quarterly benchmark in the last one, three, five and 10 years. It has also often exceeded its targeted geared IRRs of 10-15%. Last year&rsquo;s property return of 9.9% was more than double the benchmark. Improving occupancy, rental increases and falling interest costs from debt reduction in FY17 should underpin earnings growth in FY18-19, thereby supporting the dividend yield of over 4%. Despite this track record and yield, Picton trades at a discount to the sector average P/NAV, even after the share price recovery we have seen in the last year.

United Kingdom

Picton Property Income Ltd is a closed-end investment company.  The Company invests in real estate in the United Kingdom, the Isle of Man, and the Channel Islands. Picton Property Income Ltd seeks to offer investors an attractive level of income with the potential for capital growth.

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Picton Property Income (PCTN LN)

Progress continues

Picton Property Income’s 25 July NAV update showed that asset management initiatives have continued to add value through a series of new and...

Edison Investment Research

Consistent outperformance

Picton Property Income is an internally managed property company, which has assembled a £624m portfolio diversified by sector, geography and also...

Edison Investment Research

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