Picton Property Income (PCTN)

Picton Property Income (PCTN) is a diversified UK REIT with a long track record of outperforming its MSCI UK All-Property benchmark. After a difficult period for property, driven by higher interest rates, in the last year, PCTN has seen a rise in portfolio valuation, strong share price performance, and an increase in the dividend.

PCTN is internally managed, led by CEO Michael Morris. Michael has worked on PCTN since 2005, becoming CEO in 2012. He leads a team of ten professionals supported by non-executive directors with a wide range of property experience.

PCTN’s Portfolio is biased regionally to London and the South East and by sector to industrial assets (c. 68%). PCTN has reduced its exposure to offices from 30% to 2 0% since March 2024, with several disposals at premiums to book value. PCTN is a diversified UK REIT, and over the long term, one could expect the sector mix to change as the market evolves.

The Dividend yield is 4.8% with cover of 1.13× for the financial year ending 31/03/2025, which saw a 5.7% increase in dividends. PCTN pays a covered dividend rather than relying on distributable reserves, and the dividend increase for the last financial year was driven by a rise in earnings. In the current financial year, the dividend rate has been increased again by 2.3%, with cover at 1.06x at the half-year stage on 30/09/2025.

Gearing is c. 22% LTV through long-term debt maturing in 2031 and 2032 with fixed interest rates averaging 3.7%. This compares favourably to the net initial yield, 5.2% and equivalent yield of 6.8% of the property portfolio, meaning there is a strong yield pickup generated by the gearing. We look in more detail at these yields in the Portfolio section.

PCTN trades at a c. 28% Discount and has initiated a share buyback programme, currently for up to £30m.