The Q119 NAV total return was 2.5%, with a high level of occupancy maintained and successful progress made with lease events. Picton's (LON:PCTN) portfolio has a strong bias towards industrial and regional office property markets, which remain robust with widespread rental growth. In addition, Picton’s portfolio continues to offer significant reversionary potential. Shareholders have approved conversion to REIT status, which is expected to take effect from 1 October 2018 and should enhance future profitability, with no material impact on investment and portfolio strategy.
Good progress; no material changes to forecasts
Income earnings during the quarter covered dividends per share of 0.875p by 121%. Like-for-like revaluation gains of 0.8% and gains on the disposal of two properties for £11.8m, 8.4% ahead of the March valuation, contributed to NAV growth of 1.5% to 91.8p. The NAV total return for the quarter was 2.5%. Lease events with a combined annual rent of £0.9m were completed in the period at an average 6.2% uplift to the March estimated rental value (ERV). Occupancy was maintained at a high 95%, dipping slightly from March (96%) due to asset management actions. A £33.7m debt repayment since the end of Q119 will save c £1m pa in interest costs, broadly matching the income impact of the disposals, while LTV has fallen to 25.5% (March: 26.2%). We have made only very minor adjustments to our forecasts for EPS and NAV, and no change to DPS.
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