FY18 builds on successful track record

Picton Property Income 25 June 2018 Outlook
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Picton Property Income

FY18 builds on successful track record

FY18 results & outlook

Real estate

25 June 2018

Price

91p

Market cap

£491m

Net balance sheet debt (£m) at 31 March 2018

178.3

Net LTV as at 31 March 2018

26,2%

Shares in issue

540.1m

Free float

100%

Code

PCTN

Primary exchange

LSE

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

1.9

10.7

9.8

Rel (local)

4.1

0.7

5.6

52-week high/low

92.2p

81.5p

Business description

Picton Property Income is an internally managed investment company that invests in commercial property across the UK. The investment objective is to provide investors with an attractive level of income and the potential for capital growth.

Next events

Publication of annual report

June 2018

Analysts

Martyn King

+44 (0)20 3077 5745

Andrew Mitchell

+44 (0)20 3681 2500

Picton Property Income is a research client of Edison Investment Research Limited

In a successful FY18, Picton Property Income again outperformed the MSCI IPD Quarterly Benchmark property return, as it has now done over one, three, five and 10 years. Moderate gearing enhanced the EPRA NAV total return to 14.9%. The industrial and office property markets, towards which Picton’s portfolio has a strong bias, remain robust with widespread rental growth. In addition, Picton’s portfolio continues to offer significant reversionary potential despite an already high level of occupancy. Plans to convert to UK REIT status later in the year should enhance future profitability, with no material impact on investment and portfolio strategy.

Year end

Net rental
income (£m)

EPRA EPS*
(p)

DPS
(p)

EPRA NAV/
share (p)

P/EPRA NAV
(x)

Yield
(%)

03/17

42.4

3.81

3.35

81.8

1.11

3.7

03/18

38.4

4.19

3.45

90.4

1.01

3.8

03/19e

38.5

4.30

3.57

94.0

0.97

3.9

03/20e

39.1

4.43

3.68

96.6

0.94

4.0

Note: *EPRA EPS excludes revaluation gains/losses and other exceptional items.

Strong delivery in FY18

Adjusting for the exceptional income received in FY17, net rental income grew 3.5% to £38.4m in FY18. Occupancy increased to 96% and the annualised rent roll increased by 3.9%. Costs were little changed, other than for c £300k of REIT conversion expense, with the ongoing charge ratio falling to 1.1%. EPRA EPS grew by 10.1% and the quarterly DPS was increased by 3% during the year to an annualised 3.5p, 1.22x covered by FY18 EPRA EPS. Like-for-like valuation gains of 6.5% contributed to a 10.5% EPRA NAV increase to 90p, taking NAV total return to 14.9%. LTV reduced to 26.7%, with 95% of debt fixed with an average maturity of more than 10 years at a blended cost of 4.1%. We have modestly increased our FY19 EPS and NAV estimates.

Significant reversionary potential

Picton’s portfolio continues to be overweight regional industrial and office property, and significantly underweight retail and leisure (with no shopping centre exposure). This served it well in FY18 and consensus expectations remain positive for FY19. The estimated rental value of the portfolio is now £6.5m ahead of the contracted rent roll, of which c £2m represents the upside potential from leasing vacant space, with the balance attributable to rent reviews and lease expiry opportunities. With occupancy at 96% already, continuing active asset management seems likely to be the key driver to unlocking income and value from the existing portfolio.

Valuation: Well covered DPS supports strong returns

While Picton has a strong income focus, it also chooses to reinvest into the portfolio in ways designed to support occupancy and income growth, with the specific goal of enhancing long-term total return. The growing and well covered DPS represents a relatively attractive dividend yield of c 4%, while there are significant opportunities to grow income further from the current portfolio. Despite a strong historic record of relative outperformance, Picton trades at around its EPRA NAV with a P/NAV that is broadly in line with peers.

Brief overview of FY18 results

The year ended 31 March 2018 was a very successful one for Picton. At the portfolio level, it continued to outperform the MSCI IPD Quarterly Benchmark, with a total property return of 13.0% compared with 10.1% for the benchmark. With the benefit of gearing, NAV total return (dividends reinvested during the year) was 14.9%.

Exhibit 1: Results summary

£000s

2018

2017

Change (%)

Revenue from properties*

48,782

49,148

(0.7)

Property expenses

(10,335)

(12,011)

(14.0)

Net property income

38,447

37,137

3.5

Total operating expenses

(5,566)

(5,249)

6.0

Operating profit

32,881

31,888

3.1

Net finance expense

(9,747)

(10,823)

(9.9)

Tax

(509)

(499)

EPRA earnings

22,625

20,566

10.0

Exceptional income

5,250

Profit on disposal of investment property

2,623

1,847

Investment property valuation movements

38,920

15,087

IFRS net profit

64,168

42,750

50.1

EPRA EPS (p)

4.2

3.8

10.1

IFRS EPS (p)

11.9

7.9

50.2

DPS declared (p)

3.45

3.35

3.0

Dividend cover (x)

1.22

1.14

NAV per share, IFRS & EPRA (p)

90

82

10.5

NAV total return (dividends reinvested during the year)

14.9%

10.4%

Net LTV

26.7%

27.4%

Source: Picton Property Income. Note: *2017 adjusted for £5.25m of exceptional income.

In FY18, in underlying terms, net property income grew 3.5% compared with FY17, from £37.1m to £38.4m. This adjusts for the £5.25m of exceptional income recognised in FY17 in respect of the settlement of a long-running contractual dispute. Period end occupancy was 96%, up from 94% a year earlier, and ahead of the MSCI IP Quarterly Benchmark at 93%.

Operating expenses were well controlled, with almost all of the 6.0% increase attributable to the recognition of £307k in non-recurring expenses relating to REIT conversion. Management indicates a further, but smaller charge in the current year, to complete the conversion. The ongoing charge ratio, which excludes the REIT conversion costs (total recurring operating expenses, excluding property operating expenses, as a percentage of average net assets) declined from 1.2% to 1.1%.

The 9.9% decline in net finance expense reflects lower average debt and a lower average debt cost, following the repayment of the 7.5% zero dividend preference share in H217. From end-FY17 to end-FY18, total debt increased slightly from £204.6m to £210.7m, while the net loan to value ratio (LTV) reduced to 26.7%. The average cost of debt is 4.1% and 95% of borrowing is fixed rate, substantially mitigating interest rate risk.

EPRA earnings and EPRA EPS both increased by c 10%, the latter to 4.2p per share.

Including gains on disposal of investment properties (£2.6m) and net revaluation movements (£38.9m, up 6.5% on a like-for-like basis), both higher than in FY17, IFRS earnings increased by 50.1% to £64.2m.

The quarterly dividend was increased by 3% in February 2018 to an annualised 3.5p per share. Dividends declared in the period of 3.425p were 1.22x covered by EPRA earnings.

With a 10.5% increase in EPRA NAV per share, including dividends paid, EPRA NAV total return for the year was 14.9%.

Management provided a positive outlook for the current year, despite the risks associated with current economic conditions and the Brexit transition. Occupational demand for industrial and office property, where the Picton portfolio remains overweighted, has remained robust, with supply tight in many areas. Portfolio occupancy is at a good level, and the company has a number of asset management plans aimed at enhancing the existing asset base and capturing the inherent reversionary potential to grow income and value further.

Focus on income to deliver returns

Background

Picton Property Income is an income-focused, internally managed investment company, with an investment objective to provide shareholders with an attractive level of income, together with the potential for capital growth, by investing in the main UK commercial property sectors. As at 31 March 2018 the fair value of the investment portfolio was £670.7m, diversified across 51 assets, let to more than 360 occupiers. Although diversified, the portfolio is actively positioned compared with the MSCI IPD Quarterly Benchmark, with an overweighting in industrial and office properties and an underweight position in retail and leisure property, and in central London.

Exhibit 2: Asset growth and improved efficiency

Exhibit 3: Trend in EPRA EPS and DPS

Source: Picton data

Source: Picton data

Exhibit 2: Asset growth and improved efficiency

Source: Picton data

Exhibit 3: Trend in EPRA EPS and DPS

Source: Picton data

Picton was launched in October 2005 as the ING UK Real Estate Income Trust in an offshore structure, and listed on the London Stock Exchange. In 2011, the company name was changed to Picton Property Income and in January 2012 it internalised the investment management function of the company through a newly created, wholly owned subsidiary company, Picton Capital. Picton Capital was substantially created by former employees of the outgoing external manager, ING Real Estate Investment Management. The change in structure was aimed at giving the company greater flexibility to manage costs and benefit fully from the growth in assets and, as the UK economy and commercial property markets have recovered in recent years, Picton has grown assets, earnings and dividends while the ongoing charge ratio (recurring costs excluding property costs as a percentage of average net assets) has trended lower (Exhibits 3 and 4).

Management’s aim is for Picton to be one of the consistently best-performing, diversified, UK-focused property companies listed on the Main Market of the London Stock Exchange. In the five years to end-FY18, positive property returns have combined with effective use of debt and efficient operation to generate an EPRA NAV per share total return of 117%, or a compound annual return of 16.8% pa (see Exhibit 15).

Exhibit 4: Picton property performance vs MSCI IPD Quarterly Benchmark (annualised, to 30 March 2018)

Exhibit 5: Picton NAV total return (change in NAV per share plus dividends paid in the period)

Source: Picton Property Income, MSCI

Source: Picton data, Edison Investment Research

Exhibit 4: Picton property performance vs MSCI IPD Quarterly Benchmark (annualised, to 30 March 2018)

Source: Picton Property Income, MSCI

Exhibit 5: Picton NAV total return (change in NAV per share plus dividends paid in the period)

Source: Picton data, Edison Investment Research

Strategy: Occupier focused, opportunity led

Picton describes its strategy as occupier focused and opportunity led. Occupier focused refers to working closely with its own tenants, to understand their needs, enhance occupancy, improve retention and maximise income, but it also applies to the occupier market as a whole, helping to drive portfolio strategy and asset selection. The opportunity led part relates to being commercial when buying, managing and selling. During FY18, Picton acquired one office asset in Bristol city centre, with significant reversionary potential for £23.2m and sold three non-core assets for an aggregate £10.4m, 37% ahead of the start-of-year valuation. By year-end, occupancy at the acquired Bristol asset had increased from 65% to 91%, contributing to a 15% uplift in valuation in the four months since completion. To achieve this two-pronged strategy, it targets five strategic priorities:

Hands-on asset management: Picton is always trying to improve its asset base via refurbishment, higher-value uses or lease restructuring. It has also been steadily increasing the average lot size of the portfolio, which increased by a further 14% in FY18 to £13.4m. A larger lot size reduces the complexity of managing the portfolio and supports efficiency, and management targets a lot size of £10-30m, believing this provides a good balance between efficiency and the added competition that is common for larger assets. Picton also looks to recycle capital where opportunities exist to achieve improved risk-adjusted returns, and is able to invest anywhere across the UK to do this.

Working with occupiers: Picton believes in working closely with its occupiers so as to better understand their needs and be able to respond to their requirements in a timely manner. The goal is enhance occupancy and tenant retention rates, and increase income. Recent initiatives include the roll-out of occupier satisfaction surveys, and continuing to provide meeting room space in London for occasional use by regional-based occupiers.

Growth of recurring income: the target is to increase rental income and to secure market rent rises via active portfolio management, adding additional income from new lettings, lease renewals and re-gears. A diverse tenant base reduces income risk and supports the aim of generating sufficient cash to meet growing dividends while continuing to reinvest in the portfolio.

Operational efficiency and expertise: as an internally managed investment company, Picton has direct control over its costs base. All staff are incentivised by a long-term incentive share plan (LTIP), linked to shareholder total return, which closely aligns their interest with the interests of shareholders and encourages a focus on efficiency. This operating model should allow Picton to benefit further from economies of scale as it grows.

Effective use of debt: the use of gearing increases returns to shareholders over the long term. When gearing is appropriate in the cycle, the portfolio’s income return can be improved by low, long-term fixed interest rates.

Property portfolio: Significant reversionary potential

The externally appraised value of the portfolio as at 31 March 2018 was £683.8m (FY17: £624.2m) with a balance sheet fair value, after lease and other adjustments, of £670.7m. The valuation reflects a net initial yield of 5.5% and a reversionary yield of 6.6%, and increased by 6.5% on a like-for-like basis. In addition, purchases less sales of properties added a net £12.8m and £3.6m were invested into refurbishment projects to enhance the portfolio.

The rent roll at year end was £41.4m and increased by 3.9% during the year on a like-for-like basis. The estimated rental value (ERV) of £47.9m, up by 2.4% during the year, indicates a significant opportunity to increase rental income from the existing portfolio, as discussed below. Occupancy improved form 94% to 96% with a weighted average unexpired lease term of 5.2 years.

Exhibits 6 and 7 show the sector and regional positioning of the portfolio. The bias towards industrial and office assets was very beneficial to performance during the year, and the low exposure to central London (reduced significantly in FY17) was also beneficial.

Exhibit 6: Portfolio sector split

Exhibit 7: Portfolio regional split

Source: Picton data at 31 March 2018

Source: Picton data at 31 March 2018

Exhibit 6: Portfolio sector split

Source: Picton data at 31 March 2018

Exhibit 7: Portfolio regional split

Source: Picton data at 31 March 2018

The 13.0% total property return generated by Picton during FY18 compares with a 10.1% return on the MSCI IPD Quarterly Benchmark over the same period, around half of which is attributable to income and the rest to capital growth. Picton is c 41% weighted to the industrial sector (MSCI IPD c 22%) and its industrial assets saw 12.6% like-for-like valuation growth. Like-for-like valuation growth in Picton’s office assets (c 36% weight versus MSCI IPD at c 27%) was 6.5%. Retail and leisure values declined by 2.3% despite a high level of occupancy (97%) being maintained.

Significant potential from existing assets

Of the £6.5m pa gap between end-FY18 contracted rents and ERV, c £2m represents the upside potential from leasing vacant space, with the balance attributable to asset management opportunities. With occupancy at 96% already, active asset management is likely to be the key to unlocking income and value from the existing portfolio.

The weighted average unexpired lease length (to first break) was 5.2 years as at 31 March 2018, and the maturity profile is shown below in Exhibit 8.

Exhibit 8: Lease maturity schedule (to first break)

Source: Picton data

Over one year, lease maturities to first break represent just under 14% of contracted rent, or c £5.7m. Exhibit 9 provides a summary of some of the key asset management opportunities for FY19 and the potential upside from reversion to ERV.

Exhibit 9: Summary of key FY19 asset management opportunities

Sector

Occupancy

Opportunity

Industrial

99.3%

24 lease events to March 2019 with ERV 19% ahead of passing rent

Retail

97.0%

14 lease events to March 2019 with ERV 7% ahead of passing rent. Key voids: Angouleme Retail Park, Bury (£0.2m pa ERV)

Office

91.9%

30 lease events to March 2019 with ERV 12% ahead of passing rent. Key voids: Glasgow (£0.4m pa ERV), Bristol (£0.2m pa ERV), Angel Gate EC1 (£0.2m pa ERV), Farringdon Rd EC1 (£0.2m pa ERV).

Source: Picton

Market backdrop

Despite some slowing of UK economic growth, continuing Brexit uncertainty and a significant retracement of the boost to export competiveness that resulted from post-EU referendum sterling weakness, with much regional variation, property markets have remained robust over recent months. Industrial occupier demand has been robust across the UK, driving rents higher, and this seems likely to continue with little sign of material new supply. Sentiment towards London offices has weakened somewhat, and the large financial services sector is viewed as being particularly vulnerable to Brexit uncertainty. Regional markets continue to benefit from structural factors such as business relocation away from London, office conversion to residential use and a relative lack of new development in the years following the financial crisis. The retail sector continues to struggle, negatively affected by consumer income pressure, internet competition and cost pressures including business rates. The impact on Picton is mitigated by its relatively low weighting, a good level of occupancy and a high yield on assets. Management sees opportunities to create value through active asset management.

The Investment Property Forum (IPF) UK Consensus Forecasts survey gathers independent forecasts for UK commercial property from 26 leading consultants and fund/investment managers. We show a summary of the latest quarterly results, generated between the latter part of February and mid-May 2018, in Exhibit 10. For some time, the consensus has been for income to become the driver of continuing positive overall sector returns, with capital growth waning or even becoming mildly negative. Participants remain most positive about industrial property. City of London and West End office rental growth is expected to be negative over the next couple of years, which implies positive expectations for the regional contribution.

Exhibit 10: Consensus forecasts for UK commercial property

Rental value growth (%)

Capital value growth (%)

Total return (%)

2018

2019

2020

2018/22

2018

2019

2020

2018/22

2018

2019

2020

2018/22

West End office

(0.7)

(0.8)

0.8

1.0

(2.1)

(3.0)

(0.6)

(0.5)

1.3

0.6

3.1

3.2

City office

(1.3)

(1.6)

0.7

0.5

(2.5)

(3.4)

(0.6)

(0.8)

1.3

0.5

3.5

3.3

Office (all)

(0.1)

(0.5)

0.8

0.9

(0.8)

(2.7)

(0.9)

(0.6)

3.3

1.6

3.4

3.8

Industrial

3.6

2.4

2.0

2.4

5.4

1.0

(0.1)

1.3

10.2

5.8

4.8

6.3

Standard retail

0.6

0.5

0.8

1.0

(0.3)

1.2

(0.8)

(0.2)

4.2

3.2

3.7

4.3

Shopping centre

0.1

(0.1)

0.4

0.4

(3.0)

(2.9)

(1.6)

(1.5)

1.9

2.0

3.5

3.6

Retail warehouse

0.3

0.3

0.7

0.7

(1.0)

(1.7)

(0.8)

(0.6)

4.5

4.0

5.0

5.2

All property

1.0

0.6

1.0

1.2

0.4

(1.4)

(0.7)

(0.1)

5.2

3.4

4.2

4.8

Source: Investment Property Forum UK Consensus Forecasts, Spring 2018

Management and REIT conversion

Picton has to date been listed as an investment company, managed and controlled by a board, based in Guernsey, with its own UK-based investment management subsidiary, Picton Capital, authorised and regulated by the Financial Conduct Authority. Picton Capital operates the group’s investment objectives, subject to the overall supervision of the board. As has been flagged by the company for some time, this corporate structure will change later this year, when Picton converts to REIT status, subject to shareholder approval. A key requirement for conversion is that management and control of Picton shifts to the UK, and in order to satisfy this requirement a number of changes to the board composition and internal management structures will take effect. At the same time, Picton will seek shareholder approval to change its technical listing status from that of an investment company to that of a commercial company, a change that would bring it more in line with other internally managed property company peers. A circular to shareholders will be released with the annual report later in June and an EGM will be held in July, when shareholders will be asked to approve the changes, planned to take effect from 1 October 2018.

Tax-efficient REIT conversion will not change strategy

The conversion to REIT status is a logical response to changes in UK tax legislation, to become effective over the next couple of years, which would otherwise be expected to materially increase the company’s tax burden. From 1 April 2020, non-resident landlord companies, as Picton currently is, will be brought into the scope of UK taxation, while additionally, from 1 April 2019, its capital gains from the disposal of commercial property would become subject to UK tax. In addition to tax efficiencies, management also anticipates potential administrative cost savings.

The changes are not expected to have any impact on Picton’s investment or portfolio strategy and there are no plans to change the quarterly dividend and reporting cycle. A condition of REIT status is that 90% or more of its tax-exempt income profits (not capital gains) are distributed, and the board intends to review the level of dividends post-conversion. However, although the FY18 dividend was 1.22x covered by earnings on an EPRA basis, management indicates that it does not believe the current distribution policy is materially out of line with REIT distribution conditions. Our forecasts indicate continuing DPS growth, but with dividend cover maintained at a similar level to FY18.

Board changes will underline shift to UK control

Nicholas Thompson is the non-executive chairman of the board, which also includes Robert Sinclair, Roger Lewis, Vic Holmes, Mark Batten and Michael Morris. Robert Sinclair and Vic Holmes will both retire after the AGM in September 2018, providing an opportunity for the board composition to adapt to Picton’s new status as a UK-managed and controlled REIT. Michael Morris currently serves on the board as a non-executive director, although he is chief executive of Picton Capital, the group’s property management subsidiary. He will become chief executive of the group, Picton Property Income, from 1 October, remaining on the board as an executive director. Andrew Dewhirst, currently finance director of Picton Capital, will also join the board as group finance director and executive director. From 1 October 2018 it is intended that the board will comprise six members, four of whom (including the chairman) will be non-executive, and two executive. From next year, the AGM will shift from Guernsey to the UK, with the potential to strengthen links between the company and its shareholders.

No change to operational management

The investment management team that is responsible for the day-to-day implementation of Picton’s investment strategy and management of its assets will not change. In addition to Michael Morris and Andrew Dewhirst, the senior management team of Picton Capital includes the head of asset management, Jay Cable, and investment director, Fraser D’Arcy, and in total comprises 10 permanent employees and includes five real estate professionals, three qualified accountants and two support employees. The interests of all staff are aligned with shareholders through a deferred bonus structure linked to shareholder total return, and long-term incentive share plan (LTIP), additionally linked to growth in EPRA earnings and total property return relative to the MSCI IPD Quarterly Benchmark.

Financials

As noted earlier in this report, in the financial year ended 31 March 2018 (FY18) Picton produced strong results, with an EPRA NAV total return for the year of almost 15%. Net rental income, EPRA earnings and EPRA NAV were all slightly ahead of our expectations.

In our forecasts we assume an unchanged portfolio. Management says that it remains alert for new investment opportunities, but equally may make selective asset sales over the coming months, reducing gearing further.

Our rental income forecasts reflect a blended increase in the annualised rent roll of 1.3% in FY19 and 1.1% in FY20, driven by the industrial assets. We do not assume any change in occupancy across the portfolio given the already high level. In view of the £6.5m reversionary potential inherent in the portfolio, the £1.0m increase in our forecast for annualised contracted rents by end FY20 may well prove conservative. We have assumed modest increases in property valuation, in line with rental growth, maintaining the implied net initial yield at around 5.5%. The gains add 3p to NAV in FY19 and 2p in FY20.

Non-recurring REIT conversion costs of £307k were taken in FY18. Some further costs are likely, but we have made no specific allowance for this. Finance costs are based on the current 4.1% average cost of debt (95% fixed) and no change in drawn debt. Given the growth in portfolio value and modest positive net cash flow, we expect net LTV to drift lower, below 25% by end-FY20.

The changes to our FY19 forecasts, shown in Exhibit 11, are modest (the small reduction in net rental income relates to a slightly reduced assumption for dilapidation receipts) and we have introduced an FY20 forecast for the first time. Our FY20 forecast looks for EPRA earnings and DPS to grow further, by c 3%.

Exhibit 11: Performance versus forecasts and forecast revisions

Net rental income (£m)

EPRA EPS (p)

EPRA NAV/share (p)

DPS (p)

Forecast

Actual

% diff.

Forecast

Actual

% diff.

Forecast

Actual

% diff.

Forecast

Actual

% diff.

FY18

37.9

38.4

1.5%

4.11

4.19

2.0%

89.0

90.4

1.6%

3.45

3.45

0.0%

Old

New

% change

Old

New

% change

Old

New

% change

Old

New

% change

FY19e

39.2

38.5

-1.8%

4.29

4.30

0.3%

91.7

94.0

2.4%

3.57

3.57

0.3%

FY20e

N/A

39.1

N/A

N/A

4.43

N/A

N/A

96.6

N/A

N/A

3.68

N/A

Source: Edison Investment Research

Taking our forecasts for changes in EPRA NAV and DPS together, the implied EPRA NAV total return is 7.8% in FY19 and 6.7% in FY20.

Valuation

With its strong income focus, Picton pays quarterly dividends that currently annualise at 3.5p per share, a yield of c 4% at the current share price. With dividend cover of 1.22x in FY18 (and our forward-looking estimates show a similar level of cover with growing DPS), the payout could be higher, but management chooses to reinvest into the portfolio in ways designed to support occupancy and income growth, with the specific goal of enhancing total return over the long run. As noted above, its goal is to be one of the consistently best performing, diversified, UK-focused property companies listed on the Main Market of the London Stock Exchange.

A comparison of Picton with a broad range of listed property companies shows that its yield is below the median, albeit it is very well covered in a sector context.

Exhibit 12: Sector prospective yield comparison

Source: Company data, Edison Investment Research, Bloomberg data as at 20 June 2018

A similar comparison of P/NAV shows Picton, which trades at around its EPRA NAV per share, positioned around the median position.

Exhibit 13: Sector historic P/NAV comparison

Source: Company data, Edison Investment Research, Bloomberg data as at 20 June 2018

This broad peer group contains a wide variety of property companies, REITs and non-REITSs, and specialist vehicles (healthcare property, student accommodation), and covers a wide range of strategies, from a pure focus on income and collecting rents to varying degrees of asset management and capital growth, extending to property development. In Exhibit 14 we show a summary valuation comparison of Picton and what we consider to be its closest peers.

Exhibit 14: Picton peer group comparison

Price
(p)

Market cap (£m)

P/NAV
(x)

Yield
(%)

Share price performance

One month

Three months

12 months

From 12M high

EPIC

113

237

1.00

5.1

2%

3%

0%

-2%

F&C Commercial Property

152

1,213

1.08

4.0

5%

8%

5%

0%

F&C UK Real Estate Investments

101

242

1.00

5.0

-4%

-3%

-4%

-7%

Custodian REIT

120

466

1.12

5.4

2%

6%

3%

0%

Regional REIT

95

352

0.89

8.5

-5%

-4%

-10%

-11%

Schroders REIT

62

320

0.91

4.0

1%

-2%

-4%

-5%

Standard Life Investment Property

96

386

1.08

5.0

0%

3%

7%

-1%

Median

1.00

5.0

1%

3%

0%

-2%

Picton Property Income

91

490

1.01

3.9

1%

6%

8%

0%

UK Property Index

1,840

3.8

0%

3%

4%

-1%

FTSE All-Share Index

4,190

4.0

-1%

8%

3%

-3%

Source: Company data, Edison Investment Research, Bloomberg data as at 20 June 2018

As a result of its strong dividend cover, Picton’s prospective yield is below the median yield for the group of 5.0% (which includes Regional REIT at 8.5%), while its P/NAV per share is similar to the median. Picton has showed a stronger share price performance than the peer group median and the FTSE All-Share Index over the past 12 months. However, the market valuation that investors appear to be giving Picton for its track record of returns in recent years is relatively modest.

Bringing together dividend distributions and the impact of reinvesting for growth, in Exhibit 15 we show the trend in EPRA NAV per share in the five years ended FY18. Total return has been 117% over the period or a compound annual return of 16.8% pa.

Exhibit 15: EPRA NAV total return

2014

2015

2016

2017

2018

2014-18

Opening EPRA NAV

49

56

69

77

82

49

Closing EPRA NAV

56

69

77

82

90

90

DPS paid

3.00

3.00

3.30

3.33

3.43

16

EPRA NAV total return

21.0%

26.9%

17.6%

10.2%

14.7%

117.0%

Compound annual total return

16.8%

Source: Company data, Edison Investment Research. Note: Annual data differs slightly from Picton published data which assumes dividend reinvestment during the year.

Sensitivities

The commercial property market is cyclical, historically exhibiting substantial swings in valuation through cycles. Income returns are significantly more stable, but fluctuating with tenant demand and rent terms. From a sector point of view, we would also highlight the increased risks and uncertainties that attach to development activity, including planning consents, timing, construction risks and the long lead times to completion and eventual occupation. With its income focus, Picton is not a developer and avoids such risks, but does actively invest in improvements to existing assets with the aim of enhancing long term income growth and returns. We consider that the main sensitivities include:

Sector risk: some of the inherent cyclical risk to vacancy in commercial property can be mitigated by portfolio diversification. As noted above, Picton invests across the main UK commercial property sectors, with a portfolio that is well diversified by property and by individual occupiers. As noted above, the largest tenant accounts for less than 4% of the total portfolio income, while a number of government entities collectively represent the second largest tenant. Picton has a strong record of occupancy, 96% at end-FY17.

Macro risk:

Although growing by c 1.8% in 2017, UK GDP growth was weak in Q4, and into early 2018, although poor weather is likely to have had a temporary impact. The Bank of England continues to forecast a similar rate of growth in 2018 compared with 2017, although Brexit uncertainty remains high.

Having risen, partly due to sterling depreciation after the EU referendum and rising oil prices, inflation has recently moderated again, relieving some of the pressure for higher interest rates. Around 95% of Picton’s debt is fixed rate with an average duration of 10.3 years, providing substantial pressure from any increase. An eventual increase in longer-term rates is likely to have a knock-on effect on NAV over time, through increased property yields.

Management risk: As Picton is internally managed there is some management risk. It is a relatively small team, so if a senior director were to leave they would need to be replaced.

Exhibit 16: Financial summary

Year end 31 March

£'000s

2014

2015

2016

2017

2018

2019e

2020e

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

PROFIT & LOSS

Revenue

 

 

31,967

35,151

40,770

47,911

42,855

42,810

43,357

Service charge income

4,782

4,511

5,153

6,487

5,927

6,000

6,000

Total revenue

 

 

36,749

39,662

45,923

54,398

48,782

48,810

49,357

Gross property expenses

(8,992)

(9,320)

(10,001)

(12,011)

(10,335)

(10,300)

(10,300)

Net rental income

 

 

27,757

30,342

35,922

42,387

38,447

38,510

39,057

Administrative expenses

(1,139)

(1,194)

(1,510)

(1,613)

(1,914)

(1,600)

(1,650)

Operating Profit before revaluations

 

 

26,618

29,148

34,412

40,774

36,533

36,910

37,407

Revaluation of investment properties

18,422

53,163

44,171

15,087

38,920

15,000

10,000

Profit on disposals

5,660

412

799

1,847

2,623

0

0

Management expenses

(2,127)

(2,591)

(2,901)

(3,636)

(3,652)

(3,743)

(3,837)

Operating Profit

48,573

80,132

76,481

54,072

74,424

48,166

43,571

Net Interest

(10,868)

(10,930)

(11,417)

(10,823)

(9,747)

(9,689)

(9,689)

Profit Before Tax

 

 

37,705

69,202

65,064

43,249

64,677

38,477

33,881

Taxation

(357)

(347)

(216)

(499)

(509)

(292)

0

Profit After Tax

37,348

68,855

64,848

42,750

64,168

38,185

33,881

Profit After Tax (EPRA)

13,266

15,280

19,878

20,566

22,625

23,185

23,881

Average Number of Shares Outstanding (m)

359.9

445.3

540.1

540.1

539.7

539.0

539.0

EPS (p)

 

 

10.38

15.46

12.01

7.92

11.89

7.08

6.29

EPRA EPS (p)

 

 

3.69

3.43

3.68

3.81

4.19

4.30

4.43

Dividends declared per share (p)

 

 

3.000

3.000

3.300

3.350

3.450

3.570

3.680

Dividend cover (x)

1.23

1.14

1.12

1.14

1.22

1.20

1.20

Ongoing charges ratio (excluding property expenses)

1.7%

1.2%

1.1%

1.2%

1.1%

1.1%

1.1%

BALANCE SHEET

Fixed Assets

 

 

421,393

536,898

649,406

615,187

670,679

689,179

702,682

Investment properties

417,207

532,926

646,018

615,170

670,674

689,174

702,677

Other non-current assets

4,186

3,972

3,388

17

5

5

5

Current Assets

 

 

42,879

84,111

37,408

49,424

50,633

49,862

50,740

Debtors

10,527

14,019

14,649

15,541

19,123

15,466

15,670

Cash

32,352

70,092

22,759

33,883

31,510

34,396

35,070

Current Liabilities

 

 

(17,369)

(17,480)

(47,521)

(20,635)

(22,292)

(20,927)

(21,192)

Creditors/Deferred income

(14,434)

(16,468)

(18,430)

(20,067)

(21,580)

(20,215)

(20,480)

Short term borrowings

(2,935)

(1,012)

(29,091)

(568)

(712)

(712)

(712)

Long Term Liabilities

 

 

(232,807)

(233,559)

(222,161)

(202,051)

(211,665)

(211,667)

(211,667)

Long term borrowings

(231,081)

(231,834)

(220,444)

(200,336)

(209,952)

(209,952)

(209,952)

Other long term liabilities

(1,726)

(1,725)

(1,717)

(1,715)

(1,713)

(1,715)

(1,715)

Net Assets

 

 

214,096

369,970

417,132

441,925

487,355

506,447

520,562

Net Assets excluding goodwill and deferred tax

 

 

214,096

369,970

417,132

441,925

487,355

506,447

520,562

NAV/share (p)

56.4

68.5

77.2

81.8

90.4

94.0

96.6

EPRA NAV/share (p)

56.4

68.5

77.2

81.8

90.4

94.0

96.6

CASH FLOW

Operating Cash Flow

 

 

23,145

24,705

33,283

36,283

35,088

31,632

33,656

Net Interest

(8,768)

(8,695)

(8,836)

(9,211)

(9,125)

(9,689)

(9,689)

Tax

(394)

(369)

(426)

(232)

(328)

(292)

0

Net cash from investing activities

(10,838)

(61,729)

(68,123)

48,691

(17,811)

326

(3,527)

Ordinary dividends paid

(10,711)

(13,102)

(17,822)

(17,957)

(18,487)

(19,091)

(19,766)

Debt drawn/(repaid)

(1,031)

(3,191)

14,591

(46,450)

9,183

0

0

Proceeds from shares issued

18,043

100,121

0

0

0

0

0

Other cash flow from financing activities

Net Cash Flow

9,446

37,740

(47,333)

11,124

(1,480)

2,886

674

Opening cash

 

 

22,906

32,352

70,092

22,759

33,883

32,403

35,289

Closing cash

 

 

32,352

70,092

22,759

33,883

32,403

35,289

35,963

Closing debt

(234,016)

(232,846)

(249,535)

(200,904)

(210,664)

(210,664)

(210,664)

Closing net (debt)/cash

 

 

(201,664)

(162,754)

(226,776)

(167,021)

(178,261)

(175,375)

(174,701)

Net LTV

34.6%

27.4%

26.7%

25.2%

24.7%

Source: Picton Property Income, Edison Investment Research

Contact details

Revenue by geography

Picton Capital Limited
1st Floor
28 Austin Friars
London
EC2N 2QQ
020 7628 4800
www.picton.co.uk

Contact details

Picton Capital Limited
1st Floor
28 Austin Friars
London
EC2N 2QQ
020 7628 4800
www.picton.co.uk

Revenue by geography

Management team

Chief Executive of Picton Capital: Michael Morris

Finance Director of Picton Capital: Andrew Dewhirst

Michael Morris is currently chief executive of Picton Capital, the group’s UK investment management subsidiary. He has more than 23 years’ experience in the UK commercial property sector and has worked for the group since launch in 2005, becoming a non-executive director of the group in 2015. It is intended that he will become group chief executive post REIT conversion on 1 October. In his current role he is responsible for devising and overseeing the implementation of all aspects of the company’s investment strategy.

Andrew Dewhirst joined the group as finance director of Picton Capital in March 2011 and it is intended that he will join the board as group finance director post REIT conversion on 1 October 2018. He has over 25 years’ experience in the real estate and financial services sector, is an associate member of the Institute of Chartered Accountants in England and Wales and a member of the Investment Property Forum

Head of asset management of Picton Capital: Jay Cable

Investment Director, Picton Capital: Fraser D’Arcy

Jay Cable is a director of Picton Capital and head of asset management. In this role he is responsible for overseeing all asset management activities in respect of the group’s property portfolio. Formerly he was director at ING Real Estate Investment Management (UK), and has worked with the group since it launched in 2005. He has over 17 years of real estate experience and is a member of the Royal Institution of Chartered Surveyors and of the Investment Property Forum.

Fraser D’Arcy joined Picton Capital as investment director in January 2013 and is primarily responsible for transactional activity in the portfolio to manage effective recycling of capital. Previously he was an investment surveyor at Threadneedle Property Investments from 2006. He has 17 years of investment experience in UK real estate, is a member of the Royal Institution of Chartered Surveyors, has obtained the Investment Management Certificate and is a member of the Investment Property Forum.

Management team

Chief Executive of Picton Capital: Michael Morris

Michael Morris is currently chief executive of Picton Capital, the group’s UK investment management subsidiary. He has more than 23 years’ experience in the UK commercial property sector and has worked for the group since launch in 2005, becoming a non-executive director of the group in 2015. It is intended that he will become group chief executive post REIT conversion on 1 October. In his current role he is responsible for devising and overseeing the implementation of all aspects of the company’s investment strategy.

Finance Director of Picton Capital: Andrew Dewhirst

Andrew Dewhirst joined the group as finance director of Picton Capital in March 2011 and it is intended that he will join the board as group finance director post REIT conversion on 1 October 2018. He has over 25 years’ experience in the real estate and financial services sector, is an associate member of the Institute of Chartered Accountants in England and Wales and a member of the Investment Property Forum

Head of asset management of Picton Capital: Jay Cable

Jay Cable is a director of Picton Capital and head of asset management. In this role he is responsible for overseeing all asset management activities in respect of the group’s property portfolio. Formerly he was director at ING Real Estate Investment Management (UK), and has worked with the group since it launched in 2005. He has over 17 years of real estate experience and is a member of the Royal Institution of Chartered Surveyors and of the Investment Property Forum.

Investment Director, Picton Capital: Fraser D’Arcy

Fraser D’Arcy joined Picton Capital as investment director in January 2013 and is primarily responsible for transactional activity in the portfolio to manage effective recycling of capital. Previously he was an investment surveyor at Threadneedle Property Investments from 2006. He has 17 years of investment experience in UK real estate, is a member of the Royal Institution of Chartered Surveyors, has obtained the Investment Management Certificate and is a member of the Investment Property Forum.

Principal shareholders

(%)

Investec Wealth & Investment

15.0%

Alliance Trust Savings

5.4%

Canaccord Genuity Wealth Management

5.1%

Mattioli Woods

5.0%

Integrated Financial Arrangements

4.0%

Brewin Dolphin

3.5%

The Vanguard Group

3.1%

Companies named in this report

Ediston Real Estate (EPIC), Custodian REIT (CREI), F&C Commercial Property Trust (FCPT), F&C UK Real Estate Investments (FCRE), Regional REIT (RGL), Schroder REIT (SREI), Standard Life Investment Property Trust (SLI)

Edison is an investment research and advisory company, with offices in North America, Europe, the Middle East and AsiaPac. The heart of Edison is our world-renowned equity research platform and deep multi-sector expertise. At Edison Investment Research, our research is widely read by international investors, advisers and stakeholders. Edison Advisors leverages our core research platform to provide differentiated services including investor relations and strategic consulting. Edison is authorised and regulated by the Financial Conduct Authority. Edison Investment Research (NZ) Limited (Edison NZ) is the New Zealand subsidiary of Edison. Edison NZ is registered on the New Zealand Financial Service Providers Register (FSP number 247505) and is registered to provide wholesale and/or generic financial adviser services only. Edison Investment Research Inc (Edison US) is the US subsidiary of Edison and is regulated by the Securities and Exchange Commission. Edison Investment Research Pty Limited (Edison Aus) [46085869] is the Australian subsidiary of Edison. Edison Germany is a branch entity of Edison Investment Research Limited [4794244]. www.edisongroup.com

DISCLAIMER
Copyright 2018 Edison Investment Research Limited. All rights reserved. This report has been commissioned by Picton Property Income and prepared and issued by Edison for publication globally. All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report. Opinions contained in this report represent those of the research department of Edison at the time of publication. The securities described in the Investment Research may not be eligible for sale in all jurisdictions or to certain categories of investors. This research is issued in Australia by Edison Investment Research Pty Ltd (Corporate Authorised Representative (1252501) of Myonlineadvisers Pty Ltd (AFSL: 427484)) and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. The Investment Research is distributed in the United States by Edison US to major US institutional investors only. Edison US is registered as an investment adviser with the Securities and Exchange Commission. Edison US relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. As such, Edison does not offer or provide personalised advice. We publish information about companies in which we believe our readers may be interested and this information reflects our sincere opinions. The information that we provide or that is derived from our website is not intended to be, and should not be construed in any manner whatsoever as, personalised advice. Also, our website and the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. This document is provided for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.
Edison has a restrictive policy relating to personal dealing. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report. Edison or its affiliates may perform services or solicit business from any of the companies mentioned in this report. The value of securities mentioned in this report can fall as well as rise and are subject to large and sudden swings. In addition it may be difficult or not possible to buy, sell or obtain accurate information about the value of securities mentioned in this report. Past performance is not necessarily a guide to future performance. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (ie without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision. To the maximum extent permitted by law, Edison, its affiliates and contractors, and their respective directors, officers and employees will not be liable for any loss or damage arising as a result of reliance being placed on any of the information contained in this report and do not guarantee the returns on investments in the products discussed in this publication. FTSE International Limited (“FTSE”) © FTSE 2018. “FTSE®” is a trade mark of the London Stock Exchange Group companies and is used by FTSE International Limited under license. All rights in the FTSE indices and/or FTSE ratings vest in FTSE and/or its licensors. Neither FTSE nor its licensors accept any liability for any errors or omissions in the FTSE indices and/or FTSE ratings or underlying data. No further distribution of FTSE Data is permitted without FTSE’s express written consent.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

295 Madison Avenue, 18th Floor

10017, New York

US

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

295 Madison Avenue, 18th Floor

10017, New York

US

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Edison is an investment research and advisory company, with offices in North America, Europe, the Middle East and AsiaPac. The heart of Edison is our world-renowned equity research platform and deep multi-sector expertise. At Edison Investment Research, our research is widely read by international investors, advisers and stakeholders. Edison Advisors leverages our core research platform to provide differentiated services including investor relations and strategic consulting. Edison is authorised and regulated by the Financial Conduct Authority. Edison Investment Research (NZ) Limited (Edison NZ) is the New Zealand subsidiary of Edison. Edison NZ is registered on the New Zealand Financial Service Providers Register (FSP number 247505) and is registered to provide wholesale and/or generic financial adviser services only. Edison Investment Research Inc (Edison US) is the US subsidiary of Edison and is regulated by the Securities and Exchange Commission. Edison Investment Research Pty Limited (Edison Aus) [46085869] is the Australian subsidiary of Edison. Edison Germany is a branch entity of Edison Investment Research Limited [4794244]. www.edisongroup.com

DISCLAIMER
Copyright 2018 Edison Investment Research Limited. All rights reserved. This report has been commissioned by Picton Property Income and prepared and issued by Edison for publication globally. All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report. Opinions contained in this report represent those of the research department of Edison at the time of publication. The securities described in the Investment Research may not be eligible for sale in all jurisdictions or to certain categories of investors. This research is issued in Australia by Edison Investment Research Pty Ltd (Corporate Authorised Representative (1252501) of Myonlineadvisers Pty Ltd (AFSL: 427484)) and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. The Investment Research is distributed in the United States by Edison US to major US institutional investors only. Edison US is registered as an investment adviser with the Securities and Exchange Commission. Edison US relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. As such, Edison does not offer or provide personalised advice. We publish information about companies in which we believe our readers may be interested and this information reflects our sincere opinions. The information that we provide or that is derived from our website is not intended to be, and should not be construed in any manner whatsoever as, personalised advice. Also, our website and the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. This document is provided for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.
Edison has a restrictive policy relating to personal dealing. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report. Edison or its affiliates may perform services or solicit business from any of the companies mentioned in this report. The value of securities mentioned in this report can fall as well as rise and are subject to large and sudden swings. In addition it may be difficult or not possible to buy, sell or obtain accurate information about the value of securities mentioned in this report. Past performance is not necessarily a guide to future performance. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (ie without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision. To the maximum extent permitted by law, Edison, its affiliates and contractors, and their respective directors, officers and employees will not be liable for any loss or damage arising as a result of reliance being placed on any of the information contained in this report and do not guarantee the returns on investments in the products discussed in this publication. FTSE International Limited (“FTSE”) © FTSE 2018. “FTSE®” is a trade mark of the London Stock Exchange Group companies and is used by FTSE International Limited under license. All rights in the FTSE indices and/or FTSE ratings vest in FTSE and/or its licensors. Neither FTSE nor its licensors accept any liability for any errors or omissions in the FTSE indices and/or FTSE ratings or underlying data. No further distribution of FTSE Data is permitted without FTSE’s express written consent.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

295 Madison Avenue, 18th Floor

10017, New York

US

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

295 Madison Avenue, 18th Floor

10017, New York

US

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

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