Picton Property Income Limited Annual Report 2023

Strategic Report


Financial Statements

Additional Information

The year has been characterised by significant active management activity, set against headwinds of repricing and occupier caution driven by a rising interest rate environment.

Top ten occupiers The largest occupiers, based as a percentage of contracted rent, as at 31 March 2023, are as follows:

Contracted rent (£m)



Public sector

2.3 1.6 1.2 1.2 1.2 1.0 1.0 0.8 0.7 0.7

4.8 3.5 2.6 2.5 2.5 2.1 2.0 1.7 1.5 1.5

Whistl UK Limited

B&Q Plc

The Random House Group Limited

Snorkel Europe Limited

XMA Limited

Portal Chatham LLP

DHL Supply Chain Limited

4 Aces Limited

Hi-Speed Services Limited




Industrial weighting

57% South East

reduce occupational costs. The office sector is still going through a period of transition following the pandemic, with a flight to quality and many occupiers still uncertain about working patterns and operating on a more flexible basis. We are adapting our portfolio and exploring alternative uses as we position our portfolio for the medium-term. Our investment into assets has helped us to retain and secure new occupiers while improving our EPC ratings, with our refurbishment guidelines specifying a minimum B rating for most projects. We continue to be occupier focused and this approach remains key to our active management of the portfolio. This philosophy of working in collaboration with our occupiers is a significant contributor to our long- term track record of outperformance. 10% Like-for-like increase in passing rent 9% Like-for-like increase in ERV

We have continued to actively manage the portfolio, increasing passing rent and estimated rental value (ERV) by working with our occupiers, investing into our assets, and advancing our sustainability priorities. The overall portfolio passing rent is £43.3 million, an increase from the prior year of £4.7 million. On a like-for- like basis this increased by 10% and the contracted rent, which is the gross rent receivable after lease incentives, increased by £1.1 million or 3%. The March 2023 ERV of the portfolio is £55.8 million, a 9% increase on the prior year on a like-for-like basis. We had ERV growth of 18% in the industrial sector proven by new lettings and active management, whilst the office sector was up 2% and the retail and leisure sector reduced by 1%. We have been able to offset some of the valuation re-rating through the completion of over 100 asset management transactions. Inflationary pressures and rising energy costs have impacted all sectors but particularly the office sector, where service charges are highest. Occupational demand remains resilient in the industrial sector and in the retail sector it has stabilised for good quality real estate, with the business rates’ revaluation acting to

41% 16%

Rest of UK

Office weighting

32% Central London

13% 10%

Rest of UK South East


Retail and Leisure

11% Retail Warehouse

7% 2% 2%

High Street Rest of UK


 Picton Property Income Limited  Annual Report 2023


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