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Future-proofing our Portfolio / Continued
Office to alternative use strategy – repositioning the portfolio
Since the pandemic, the office sector has evolved, with occupier demands and preferences changing, following remote and hybrid working arrangements and different workplace dynamics. While it is clear that well-located, amenity rich, sustainable space is still in demand, it is building specific, with secondary space struggling to attract occupiers without significant capital expenditure.
Recognising these changes in the office sector, we have made significant progress exploring and securing more valuable alternative uses at selected office assets. Several of our properties have alternative use potential, and we have agreed sales to developers in respect of two of them as well as securing a healthcare occupier at a third following receipt of planning.
Longcross, Cardiff We have exchanged contracts to sell a partially vacant accommodation developer. The transaction is conditional on planning permission and vacant possession. The sale price is dependent on the exact planning consent obtained and in particular upon the number of rooms secured. The base price was 16% ahead of the March 2023 valuation and we expect to benefit from an overage payment once planning is secured. We will retain a small income-producing industrial unit and car parking site that will be sold separately in due course. To facilitate the disposal, we have completed a number of transactions that have ensured we can secure vacant possession in 2024. We expect planning to be secured in the fourth quarter of 2024. Accounting for 12% Of the total portfolio void 16% Base price ahead of the March 2023 valuation office building to an experienced student
Strategic priority 1 2 3
We have made significant progress securing more valuable alternative uses.
Michael Morris Chief Executive
Picton Property Income Limited / Annual Report 2024 10
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