95.149.241.133 at 13:27, 20 August 2022

2022-08-20T13:27:14Z

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			__INDEX__

>Jeff at 13:18, 22 July 2022

2022-07-22T13:18:27Z

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>Jeff at 13:01, 22 July 2022

2022-07-22T13:01:05Z

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	== References ==		== References ==
	<references />		<references />
			[[Category:Thesis]]

>Edison at 14:18, 23 June 2022

2022-06-23T14:18:02Z

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			[[File:Picton Property Income logo.jpg\|\|thumb]]

	'''Record FY22 with positive outlook'''		'''Record FY22 with positive outlook'''

>Edison: /* Summary */

2022-06-23T14:08:22Z

Summary

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	== Summary ==		== Summary ==
	Picton Property Income’s FY22 total earnings of £147m were the strongest since the company launched in 2005. Income gains and normalised rent collection underpinned DPS growth and while strong valuation uplifts mirrored broad market trends, Picton continued to build on its long-term record of portfolio outperformance. Returns are likely to moderate from the exceptional level of FY22, but Picton remains positive despite global economic and political challenges. The prospects for further uplifts in occupancy and rents are good with scope for accretive external growth.		'''Picton Property Income’s FY22 total earnings of £147m were the strongest since the company launched in 2005. Income gains and normalised rent collection underpinned DPS growth and while strong valuation uplifts mirrored broad market trends, Picton continued to build on its long-term record of portfolio outperformance. Returns are likely to moderate from the exceptional level of FY22, but Picton remains positive despite global economic and political challenges. The prospects for further uplifts in occupancy and rents are good with scope for accretive external growth.'''
	{\| class="wikitable"		{\| class="wikitable"
	\|+Key financials<ref>Note: EPRA earnings exclude revaluation gains/losses and other exceptional items. *NAV measure is net tangible assets (NTA), currently the same as IFRS NAV.</ref>		\|+Key financials<ref>Note: EPRA earnings exclude revaluation gains/losses and other exceptional items. *NAV measure is net tangible assets (NTA), currently the same as IFRS NAV.</ref>

>Edison at 13:58, 23 June 2022

2022-06-23T13:58:24Z

Show changes

>Edison at 13:53, 23 June 2022

2022-06-23T13:53:03Z

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	'''Exhibit 3: Income provides a relatively more stable bedrock to performance<ref>Source: Picton Property Income data, Edison Investment Research.</ref>'''		'''Exhibit 3: Income provides a relatively more stable bedrock to performance<ref>Source: Picton Property Income data, Edison Investment Research.</ref>'''

			[[File:Image3-f7e6e2e4c99232095c588067f99ddc03.png\|600x600px]]

	A trend decline in the cost ratio,2 the result of economies of scale and tight cost control, has further supported returns, while gearing has also steadily reduced with the end-FY22 net loan to value ratio (LTV) at 21.2%. With a strong balance sheet, Picton continues to explore opportunities for further growth. This includes property acquisitions, but the company is also conscious of the significant discounts that exist across parts of the REIT sector and the opportunities that this may provide. The open-ended sector has in some cases faced challenges that emanate from the long-term nature of real estate investment and the mismatch between asset liquidity and variable capital.		A trend decline in the cost ratio,2 the result of economies of scale and tight cost control, has further supported returns, while gearing has also steadily reduced with the end-FY22 net loan to value ratio (LTV) at 21.2%. With a strong balance sheet, Picton continues to explore opportunities for further growth. This includes property acquisitions, but the company is also conscious of the significant discounts that exist across parts of the REIT sector and the opportunities that this may provide. The open-ended sector has in some cases faced challenges that emanate from the long-term nature of real estate investment and the mismatch between asset liquidity and variable capital.
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	'''Exhibit 5: Total property return versus index<ref>Source: Picton Property Income, MSCI. Note: Data to 31 March 2022. *Annualised percentage returns.</ref>'''		'''Exhibit 5: Total property return versus index<ref>Source: Picton Property Income, MSCI. Note: Data to 31 March 2022. *Annualised percentage returns.</ref>'''

			[[File:Image4-52de7bc6e28f87a993f10ce7bdecf5f5.png\|600x600px]]'''Exhibit 6: Property income return versus index<ref>Source: Picton Property Income, MSCI. Note: Data to 31 March 2022. *Annualised percentage returns.</ref>'''

	~~'''Exhibit 6~~: ~~Property income return versus index<ref>Source: Picton Property Income, MSCI. Note: Data to 31 March 2022. *Annualised percentage returns~~.~~</ref>'''~~		[[File:Image5-78e4a071afa96198ee901fe5eccdcfbb.png\|600x600px]]


	Among the factors supporting this strong performance we note:		Among the factors supporting this strong performance we note:
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	'''Exhibit 7: Sector positioning through time<ref>Source: Picton Property Income data.</ref>'''		'''Exhibit 7: Sector positioning through time<ref>Source: Picton Property Income data.</ref>'''

			[[File:Image6-6c528c8320b7a2e6d07b8b546f9ef798.png\|600x600px]]

	Picton’s approach to buying and selling assets is predominantly opportunistic and driven by asset rather than sector selection. Significant transactional activity in recent years reflects capital recycling and other strategic portfolio changes. During FY14–17 Picton took advantage of positive market conditions (increasing rents and rising valuations) to significantly grow and reposition the portfolio. This included the disposal of central London assets and other non-core properties, deliberately increasing the average lot size while reducing gearing. Ahead of the pandemic, Picton was a net seller of assets, reducing an already low high street retail exposure and further reducing gearing. Taking advantage of the market recovery, in FY22 (and FY23 year to date) it has been a net buyer and continues to monitor further opportunities across all market sectors.		Picton’s approach to buying and selling assets is predominantly opportunistic and driven by asset rather than sector selection. Significant transactional activity in recent years reflects capital recycling and other strategic portfolio changes. During FY14–17 Picton took advantage of positive market conditions (increasing rents and rising valuations) to significantly grow and reposition the portfolio. This included the disposal of central London assets and other non-core properties, deliberately increasing the average lot size while reducing gearing. Ahead of the pandemic, Picton was a net seller of assets, reducing an already low high street retail exposure and further reducing gearing. Taking advantage of the market recovery, in FY22 (and FY23 year to date) it has been a net buyer and continues to monitor further opportunities across all market sectors.

	'''Exhibit 8: Opportunistic approach to acquisitions and disposals overlaid with strategic positioning<ref>Source: Picton Property Income data.</ref>'''		'''Exhibit 8: Opportunistic approach to acquisitions and disposals overlaid with strategic positioning<ref>Source: Picton Property Income data.</ref>'''

			[[File:Image7-69ee5a6f7d85e068105926e2d4e40e66.png\|600x600px]]

	== Significant organic growth potential embedded in the portfolio ==		== Significant organic growth potential embedded in the portfolio ==
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	'''Exhibit 7: 10-year portfolio occupancy trend<ref>Source: Picton Property Income data.</ref>'''		'''Exhibit 7: 10-year portfolio occupancy trend<ref>Source: Picton Property Income data.</ref>'''

			[[File:Image8-a001b1a747dea1812d7432c5c98d79b1.png\|600x600px]]While lease maturities reflect an element of income risk, they also provide an opportunity to reset rents towards or ahead of ERV, as was the case in FY22. Across the portfolio, the FY22 weighted average lease term (WAULT) to first termination was 4.8 years with c 40% of rental income due to mature over the next three years (Exhibit 10), representing a reasonable balance of risk and opportunity in our view. In the industrial sector, 41 lease events are forecast for the coming year, with an overall ERV that is 10% higher than the current passing rent of £2.7m, proving the opportunity to grow income. In the office sector the focus will be on reducing voids although 33 lease events are forecast with an average ERV 4.0% above passing rent.
	While lease maturities reflect an element of income risk, they also provide an opportunity to reset rents towards or ahead of ERV, as was the case in FY22. Across the portfolio, the FY22 weighted average lease term (WAULT) to first termination was 4.8 years with c 40% of rental income due to mature over the next three years (Exhibit 10), representing a reasonable balance of risk and opportunity in our view. In the industrial sector, 41 lease events are forecast for the coming year, with an overall ERV that is 10% higher than the current passing rent of £2.7m, proving the opportunity to grow income. In the office sector the focus will be on reducing voids although 33 lease events are forecast with an average ERV 4.0% above passing rent.

	'''Exhibit 11: Lease maturity profile<ref>Source: Picton Property Income.</ref>'''		'''Exhibit 11: Lease maturity profile<ref>Source: Picton Property Income.</ref>'''

			[[File:Image9-807dd1c27257d1fef8cb85b5a0ef2f50.png\|600x600px]]Across the broad UK commercial property sector, over the medium term, income returns have been relatively stable compared with the volatility displayed by capital values. We therefore believe it reasonable to expect medium-term rental growth to broadly match inflation. Over shorter periods, this may not be the case as the relationship will be influenced by the incidence and nature of rent reviews as well as the timing of lease maturities.
	Across the broad UK commercial property sector, over the medium term, income returns have been relatively stable compared with the volatility displayed by capital values. We therefore believe it reasonable to expect medium-term rental growth to broadly match inflation. Over shorter periods, this may not be the case as the relationship will be influenced by the incidence and nature of rent reviews as well as the timing of lease maturities.

	As inflation rates have increased, investment flows into those companies with long, inflation-linked leases have remained strong. These generally provide a high level of income growth certainty and although indexed rent increases are typically capped at around 4%, below current inflation levels, this does have the additional advantage of ensuring rent levels remain affordable to tenants.		As inflation rates have increased, investment flows into those companies with long, inflation-linked leases have remained strong. These generally provide a high level of income growth certainty and although indexed rent increases are typically capped at around 4%, below current inflation levels, this does have the additional advantage of ensuring rent levels remain affordable to tenants.
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	'''Exhibit 16: 10-year P/NAV* history<ref>Source: Company NAV data, Refinitiv prices at 17 June 2022. Note: *EPRA NAV/NTA.</ref>'''		'''Exhibit 16: 10-year P/NAV* history<ref>Source: Company NAV data, Refinitiv prices at 17 June 2022. Note: *EPRA NAV/NTA.</ref>'''

			[[File:Image10-642eb454b7171b18f164159ceaf43b33.png\|600x600px]]

	Exhibit 17 shows a summary performance and valuation comparison of Picton and what we consider to be its closest diversified income-oriented peers. Over three years, Picton’s share price performance is ahead of the group average, which shows a wide spread of performances, in some cases reflecting differing financial and operational performance during the pandemic. As market conditions have normalised, over 12-months the Picton share price performance is below the average. Based on 12-month trailing DPS declared, Picton shares trade on a lower yield than the group average, which in part reflects its strategy of balancing sustainable dividends with the capital requirements of active management, as well as relatively low gearing. With its share price failing to keep pace with NAV growth, Picton’s P/NAV is now below the peer, average having been at a meaningful premium a year ago. The company’s strong track record of property level performance, the future income and valuation growth potential embedded in its portfolio, and its strong balance sheet with relatively modest gearing are all potential triggers for Picton’s share price to re-rate.		Exhibit 17 shows a summary performance and valuation comparison of Picton and what we consider to be its closest diversified income-oriented peers. Over three years, Picton’s share price performance is ahead of the group average, which shows a wide spread of performances, in some cases reflecting differing financial and operational performance during the pandemic. As market conditions have normalised, over 12-months the Picton share price performance is below the average. Based on 12-month trailing DPS declared, Picton shares trade on a lower yield than the group average, which in part reflects its strategy of balancing sustainable dividends with the capital requirements of active management, as well as relatively low gearing. With its share price failing to keep pace with NAV growth, Picton’s P/NAV is now below the peer, average having been at a meaningful premium a year ago. The company’s strong track record of property level performance, the future income and valuation growth potential embedded in its portfolio, and its strong balance sheet with relatively modest gearing are all potential triggers for Picton’s share price to re-rate.
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	== References ==		== References ==
			<references />

>Edison: /* Leadership team */

2022-06-23T13:44:13Z

Leadership team

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			== References ==

>Edison: Created page with "'''Record FY22 with positive outlook''' == Summary == Picton Property Income’s FY22 total earnings of £147m were the strongest since the company launched in 2005. Income gains and normalised rent collection underpinned DPS growth and while strong valuation uplifts mirrored broad market trends, Picton continued to build on its long-term record of portfolio outperformance. Returns are likely to moderate from the exceptional level of FY22, but Picton remains positive de..."

2022-06-23T13:41:09Z

Created page with "'''Record FY22 with positive outlook''' == Summary == Picton Property Income’s FY22 total earnings of £147m were the strongest since the company launched in 2005. Income gains and normalised rent collection underpinned DPS growth and while strong valuation uplifts mirrored broad market trends, Picton continued to build on its long-term record of portfolio outperformance. Returns are likely to moderate from the exceptional level of FY22, but Picton remains positive de..."