Real estate investment trust (REIT) Picton Property Income Ltd (LON: PCTN) has shown the resilience of its office, retail, leisure and industrial portfolio with a minimal dip in NAV from 100.4p/share to 99.4p/share in the quarter to June 2023. At 71.9p, the shares are trading on a discount to NAV of 28%.
There was a 0.875p/share dividend paid during the period, so the total return was -0.2%. The like-for-like value of the portfolio declined by 0.7%. Higher rents from renewals and three new industrial lettings helped to hold up the valuations. The rents obtained were higher than expected.
There are around 400 occupiers across Picton Property Income’s 49 properties. The occupancy level was 90%. The net reversionary yield is 6.8%.
The portfolio is 58% industrial, 10.8% retail and leisure and 31.2% offices, which is the toughest sector. The decline in valuations was due to the office portfolio, with the other property values edging up by 0.5%. Some office space is being switched to residential.
Borrowings were £227.1 million at the end of June 2023, which is slightly higher than at the March 2023 financial year end. The weighted average interest rate on the predominantly long-term borrowings is 3.9%. There was also cash of £20.7 million. Loan-to-value has edged up to 27.1%, which remains comfortable for the company.
The latest quarterly dividend is 0.875p/share, suggesting an annual dividend of 3.5p/share. This provides a yield of 4.9%.