Picton outperforms MSCI for 10th year despite valuation fall
Picton has become the latest REIT to see gains from strong operational performance negated by falling capital values.
In its preliminary annual results, published this morning, the REIT said its EPRA earnings had been “stable” at £21m, while dividends were up 4% to £19m. However, property values had fallen from £849m last year to £766m, while net assets were knocked back to £548m from £657m.
That in turn resulted in a loss of £90m for the year, down from last year’s £148m.
Picton has become the latest REIT to see gains from strong operational performance negated by falling capital values.
In its preliminary annual results, published this morning, the REIT said its EPRA earnings had been “stable” at £21m, while dividends were up 4% to £19m. However, property values had fallen from £849m last year to £766m, while net assets were knocked back to £548m from £657m.
That in turn resulted in a loss of £90m for the year, down from last year’s £148m.
Picton pointed out that in spite of this it had outperformed the MSCI index for a tenth consecutive year.
Chair Lena Wilson said: “Despite the challenges of inflation and higher interest rates, we have maintained both our EPRA earnings and our long-term track record of outperformance. We are continuing to upgrade and adapt our assets, ensuring they remain relevant and attractive to our occupiers, providing income sustainability.
“As a business, we are in a resilient position. We have a strong capital structure with attractive long-term fixed-rate debt. Our portfolio offers significant income upside, and we are already starting to see stability in asset values.”
The saw 39 lettings, 25% ahead of March 2022 ERV, along with 37 lease renewals or regears, at 6% ahead, and 20 rent reviews at 7% ahead.
Chief executive Michael Morris said that “after a sharp and significant pricing correction in the property market in 2022, valuations appear to be stabilising, supported by resilience in the occupational markets”.
He added that Picton “will continue to explore opportunities to maximise earnings, whether at an asset level by capturing reversionary potential with our occupier focused approach or through growth and the economies of scale that our internally managed structure can deliver”.
To send feedback, e-mail piers.wehner@eg.co.uk or tweet @PiersWehner or @EGPropertyNews
