Picton Property Income Limited Annual Report 2023

Strategic Report


Financial Statements

Additional Information

Portfolio activity

Longevity of income As at 31 March 2023, expressed as a percentage of contracted rent, the average length of leases to first termination was 4.6 years (2022: 4.8 years). This is summarised as follows: % 0 to 1 year 12.9 1 to 2 years 14.2 2 to 3 years 21.7 3 to 4 years 12.5 4 to 5 years 11.5 5 to 10 years 18.4 10 to 15 years 7.6 15 years or more 1.2 Total 100 Proactive management It has been a very active year in respect of asset management transactions. We completed: ‒ 39 lettings or agreements to lease, 25% ahead of ERV and securing a new contracted rent of £2.3 million ‒ 37 lease renewals or regears, 6% ahead of ERV, securing an uplift in contracted rent of £0.7 million ‒ 20 rent reviews, 7% ahead of ERV, securing an uplift in passing rent of £0.7 million ‒ Three lease variations to remove occupier break options, securing £0.4 million of income ‒ 11 lease surrenders to facilitate active management Leasing and occupancy Occupancy has decreased during the year from 93% to 91% with a total void ERV of £5.3 million, which compares to the MSCI UK Quarterly Property Index of 92% as at 31 March 2023. Our industrial portfolio is 95% leased with demand remaining high across the country. We have only eight vacant industrial units, four of which are being refurbished.

The office portfolio occupancy is 83%. Our occupancy has reduced primarily due to three office properties where we are working through potential changes of use to residential and student accommodation. Excluding these three properties, the office occupancy rate would increase to 91%. During the year our SwiftSpace offering has helped to grow occupancy in smaller units, with nearly a quarter of lettings by number being SwiftSpace lettings across four properties. In terms of retail and leisure, occupancy is 94%. The retail warehouse portfolio is fully leased, and we have one vacant high street shop, which is under offer. At Regency Wharf, Birmingham, we have a small office element to lease. Our largest voids are at: ‒ Angel Gate, London – accounting for 18% of the total portfolio void. We are in the process of securing change of use at the property to residential in respect of vacant units.

‒ Charlotte Terrace, London – accounting for 12% of the total void. We recently acquired this property and have submitted a planning application for change of use of part of the space to residential. ‒ Longcross, Cardiff – accounting for 9% of the total void. We are working through options for alternative uses. Retention Over the year, total ERV at risk due to lease expiries or break options totalled £5.5 million, in line with the year to March 2022. We retained 67% of total ERV at risk in the year to March 2023. Of the ERV that was not retained, a further 8% or £0.5 million was re-let to new occupiers during the year. In addition, a further £3.4 million of ERV was retained by either removing future breaks or extending future lease expiries ahead of the lease event.

 Picton Property Income Limited  Annual Report 2023


Powered by