Buy Rating Affirmed for Picton Property Income on Strategic Moves and NAV Growth Prospects

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Analyst John Cahill from Stifel Nicolaus maintained a Buy rating on Picton Property Income (PCTNFResearch Report) and keeping the price target at p90.00.

John Cahill has given his Buy rating due to a combination of factors pertaining to Picton Property Income’s recent strategic moves and their impact on the company’s financials. The company has successfully secured planning permission for the conversion of an office building into student accommodation, which is expected to complete before the end of 2024. This move is anticipated to be accretive to the company’s Net Asset Value (NAV), as the sale will likely result in a significant top-up to the NAV, reflecting the value added through planning permission. Cahill estimates that a 20% uplift in planning could lead to a 0.2p accretion in NAV, showcasing the company’s effective asset management and ability to enhance value.

Furthermore, Picton’s stock is currently trading at a notable discount to its growing NAV, which positions it as an attractive investment within the sector. The company has a diversified portfolio with a strong industrial focus and a proven track record of outperforming the MSCI quarterly Index, evidencing its ability to deliver superior returns. The company’s skill in capital recycling and navigating the complexities of the UK planning system further underscores its operational competence. These strategic and financial strengths, combined with the stock’s valuation, underpin Cahill’s positive outlook on Picton Property Income, leading to his recommendation of a Buy rating.

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Picton Property Income (PCTNF) Company Description:

Picton Property Income Ltd is a UK Real Estate Investment Trust which invests in commercial property across the United Kingdom. It owns a property portfolio consisting of assets invested across the main commercial property sectors: Industrial, Office, Retail and Leisure. The portfolio is invested in the industrial and office sectors and is biased towards London and the South East. Some of the properties include Parkbury Industrial Estate, River Way Industrial Estate, Angel Gate, Stanford House, Tower Wharf and others.