Picton Property Income ETV: Resilient FY23 with continued portfolio outperformance

Picton Property Income is an internally managed UK REIT with a diversified portfolio of commercial property across the UK. It is total return driven with an income focus and aims to generate attractive returns through proactive management of the portfolio. In this interview, CEO Michael Morris discusses the recently published results for the year to 31 March 2023 (FY23) and the outlook. Despite the challenging market conditions, FY23 underlying (EPRA) earnings were resilient, which together with strong rent collection supported a 4% increase in DPS paid. The impact of market-wide property yield widening on NAV was mitigated by portfolio outperformance, the result of asset management initiatives, and low gearing. Picton’s property portfolio has now outperformed the MSCI Quarterly Property Index in each of the past 10 years with upper quartile performance over three, five and 10 years, and since launch in 2005. The portfolio contains significant further income potential and, in this context, continuing occupier demand, rent growth and mostly long-term fixed rate borrowings are positive indicators for income earnings. Meanwhile, in 2023 to date, market-wide property valuations have shown increasing resilience after the significant downward repricing to higher interest rates and bond yields in the second half of 2022. Additionally, with its experienced management team, established portfolio performance record and strong balance sheet, the company is well placed for external growth opportunities.