Last close As at 05/08/2026
GBP0.74
▲ 1.10 (1.50%)
Market capitalisation
GBP382m
Research: Real Estate
Picton Property Income’s previously agreed sale of a vacated office building in Cardiff, to a purpose-built student accommodation developer, has taken a further step forward. A resolution to grant planning permission has been secured, paving the way for sale completion before the end of the year. The scale of the planned development indicates a sale price at the top end of the agreed range, with a positive impact on NAV and earnings.
Picton Property Income |
Office repurposing progress |
Asset sale update |
Real estate |
9 September 2024 |
Share price performance
Business description
Analyst
Picton Property Income is a research client of Edison Investment Research Limited |
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Picton Property Income’s previously agreed sale of a vacated office building in Cardiff, to a purpose-built student accommodation developer, has taken a further step forward. A resolution to grant planning permission has been secured, paving the way for sale completion before the end of the year. The scale of the planned development indicates a sale price at the top end of the agreed range, with a positive impact on NAV and earnings.
Year end |
Net property income (£m) |
EPRA earnings* (£m) |
EPRA |
DPS |
NAV** per share (p) |
P/NAV |
Yield |
03/23 |
36.3 |
21.3 |
3.9 |
3.50 |
100 |
0.74 |
4.7 |
03/24 |
37.9 |
21.7 |
4.0 |
3.55 |
96 |
0.77 |
4.8 |
03/25e |
38.3 |
23.0 |
4.2 |
3.70 |
100 |
0.74 |
5.0 |
03/26e |
39.9 |
24.3 |
4.4 |
3.84 |
104 |
0.71 |
5.2 |
Note: *EPRA earnings exclude revaluation gains/losses and other exceptional items. **NAV measure is net tangible assets (NTA), currently the same as IFRS NAV.
Active asset management, reflected in leasing progress and the repositioning of selected office assets, is unlocking the significant potential embedded in Picton’s portfolio. Picton exchanged contracts for the sale of Longcross in Cardiff, conditional on planning permission, in October 2023, with the final sale price dependent on the exact planning consent obtained and, in particular, upon the number of rooms secured, subject to a collar and cap. A planning application was submitted in May and following the ‘resolution to grant’, Picton expects full planning permission to be secured, and the sale to complete, by the end of the year, subject to receipt of a satisfactory ‘Section 106 agreement’ with the local authority. The development is expected to deliver 706 beds across 488 units, which will trigger the maximum overage payment, or ‘top up’ to the sale price. In June 2024, Picton indicated that on this basis, it expected the sales price to be c 20% ahead of the end-FY24 valuation. We estimate the uplift to be in the order £1m or c 0.2p per share, but we expect further clarity to be provided by the company upon completion. Given the early stage of the planning application, we doubt whether this was reflected in the end-Q125 NAV, nor is it specifically included in our forecasts which, pending an update on the Q225 portfolio valuation, are unchanged. With vacant possession having been secured, completion of the sale will enhance earnings by removing void property costs. The Q125 update showed occupancy increased to 93% from 91% at end-FY24, or 95% excluding Longcross (c 1%) and Charlotte Terrace in West London, where planning permission has been granted, and vacant possession secured, for the part-conversion of office space to residential. As previously reported, in Q125 Picton completed the sale of Angel Gate in Islington, having similarly secured planning permission for conversion of the part-vacant office property to residential use. The £29.6m sale price was 2% ahead of the end-FY24 valuation, which already captured most of the valuation uplift. The sale removed void property costs and allowed for the repayment of more expensive debt.
Consistent with its ‘net zero carbon’ agenda, the Longcross sale agreement allowed Picton to strip the building of any internal finishes, and 20,000 sq ft of carpet, a modern air-conditioning system, lights and furniture will be used in the refurbishment of two other office buildings in Colchester and Bristol. Picton estimates a cost saving of £0.2m from re-using the air-conditioning unit, with additional savings from the repurposing of fixtures and fittings.
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Research: Investment Companies
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