LONDON (ShareCast) - (ShareCast News) - Income focused property investment company Picton Property Income announced the disposal of a non-core property in Drury Lane, Oldham, for £2.2m on Monday, completing its business plan for the asset.
The London-listed firm said the warehouse was purchased in April 2010 for £0.4m with an annual rent of £74,000, as part of the acquisition of Rugby REIT.

During Picton's ownership, it secured planning consent to change the use from industrial to leisure, completed a full refurbishment, acquired adjacent land for car parking and subsequently let the transformed asset to The Gym Group until 2031 at an annual rent of £150,000.

The sale price reflected a net initial yield of 6.4% and a 10% premium to the 31 December 2016 external valuation.

Net of the £0.8 million of costs incurred since acquisition, the asset was sold at an 80% profit.

"This is a good example of how we used our knowledge of the local market and asset management expertise to double the income and capture a significant increase in value," said Picton Capital chief executive Michael Morris.

"The proceeds can be used, together with existing funds, to opportunistically acquire assets in larger lot sizes that we believe will generate attractive future returns."

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