Governance
Financial Statements
Additional Information
Strategic Report
We considered multiple opportunities during the year and specifically had extensive discussions in 2023 about a possible combination with UK Commercial Property REIT, which we were disappointed to be unable to progress. We still believe there is merit in consolidation, and equally that there is a place for a well-managed diversified REIT that can adapt to changing market conditions. While the rationale for merging was to capitalise on our internalised management model and track record, allowing shareholders to benefit from the economies of scale, we believe this corporate activity also had some adverse short- term impact on our share price. Outlook 2024 appears to have started with considerably more momentum than the preceding year and this has been apparent in the continued rental growth and stabilisation in capital growth as captured in the MSCI indices. The occupier markets remain more resilient than some had expected and we have a good pipeline of activity across all areas of the portfolio. Our approach capitalises on real estate being an ever-evolving asset class, with buildings continually adapted, upgraded or repurposed to meet changing occupier demand. There remains significant income upside within the portfolio, whether that is captured directly at rent review or lease expiry or through the recycling of assets and reinvestment. Our priority in the short-term is continuing to grow EPRA earnings while focusing on improving our share price rating to be more reflective of the performance and potential of the business.
Acting responsibly We have continued to invest in our portfolio to ensure not only that it meets the needs of today’s occupiers but is also future- proofed and helps us achieve our net zero carbon commitments. We have invested in our assets and improved our portfolio EPCs with 80% of the portfolio now rated A–C. This is yet another year-on- year improvement and compares with 55% A–C rated in 2020. We have made good progress in removing gas installations and converting heating to electrical systems across five assets. This is reflected in the 10% reduction in like-for-like Scope 1 emissions in the year. We have installed more on-site renewables in the form of solar this year than in any preceding period; an increase in capacity of 184%. committed to act in the interests of all stakeholders and recognise the need to remain relevant to shareholders. Much has been written about the challenges with the UK listed markets generally. Real estate businesses have been impacted by the rising interest rate environment and wide share price discounts have led to consolidation, acquisitions and managed wind-downs. Consolidation and growth The Board and the team are
Our priority is to continue to grow EPRA earnings while focusing on improving our share price rating to be more reflective of the potential of the business.
Michael Morris Chief Executive
Michael Morris Chief Executive 22 May 2024
Picton Property Income Limited / Annual Report 2024
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