Picton Property Income (LSE:PCTN) — Post AGM Investor Presentation

0:00 Good morning, and welcome to the PCTN PROPERTY INCOME POST AGM Investor Presentation. Throughout the quarter presentation, investors will be in listen only mode. Questions are encouraged and can be submitted at any time by the Q and A tab situated on the right corner of your screen. Just simply type in your questions and press send. The company may not be in a position to answer every question it receives in the meeting itself. However, the company can review all the questions submitted today and publish responses where it is appropriate to do so. Before we begin, I'd like to submit the following poll. I'd now like to hand you over to Lina Wilson, chair. Good morning.

0:29 Thank you, Alessandro, and good morning, everyone. As Alessandro said, I'm Lina Wilson, and I'm chair of PCTN. I'm absolutely delighted that you've joined us, today. If I can just introduce my colleagues, Michael Morris, our chief executive, and Sarah Johnson, our CFO. And Sarah has just joined us. Sarah, we're delighted to have you onboard, so thank you very much. You will see that the results to the March 31 were released at the end of May. We've just held our AGM following those results. And following this presentation today, we also have a board meeting. Our assets are valued externally every quarter, so our NAV and dividend announcements are both expected tomorrow.

1:20 Because of that, Michael and Sarah will be presenting a review of last year mostly, but with as much real time information up and updates as we can. And with that, we'll be having a presentation then taking your questions, but I'll hand over to Michael.

1:37 Thank you, Lina. Thank you to everyone who's joined us. I'm sure there are many existing PCTN shareholders, but hopefully some people that are new to PCTN. So just by way of background, we were established nineteen years ago. We're listed on the main market. We invest in the core commercial sectors, a diversified portfolio focused on income, but nevertheless aiming to be one of the consistently poor best performing diversified UK REITs. Over the long run, we've delivered property level outperformance against MSCI.

2:27 We have a fully aligned management structure. We have long term fixed rate financing. And as a business, we are looking to be net zero carbon by 2040. Just a snapshot as at March, which was when the portfolio was last valued, nearly three quarters of a billion pound property portfolio at 50 assets, a really diverse occupier base, 400 occupiers

3:02 within the portfolio that deliver the rents that drive the income in the business. As at March, we had 91% occupancy, and the yield profile of the portfolio was a 5% initial rising to over 7% once fully leased. So some real embedded income upside potential within the portfolio, and we'll talk about that shortly. Nearly 60% of the portfolio is in industrial warehouse and logistics and that is biased towards London and the Southeast. 30% of the portfolio is in offices, although we will talk about the steps we've been taking to reduce that office exposure and indeed reposition some of our office assets for alternative uses to bring that weighting down.

4:01 And then 11% of the portfolio is in retail, but specifically, nearly 60% of that is in retail warehousing. So that's predominantly out of town stores in The UK. So if I hand over to Sarah, she can introduce the annual results for last year. Thank you, Michael. Thank you, Lina. And I'm delighted to be presenting the annual results for the year ending the 03/31/2024. As Lina mentioned, our results were announced back in May and the context of the summary today will really focus on a high level view of those results and the detail can be found in the appendices to the presentation and also on our website.

4:50 So my slides will focus on the key messages within the annual report along with a couple of slides on our capital structure and our reversion and earnings growth going forward. So turning to this slide, this slide sets out the three key messages which we focused on in our annual report. From a corporate perspective, we delivered robust financial performance, delivering earnings growth in a backdrop of higher inflation, higher interest rates, and generally weaker economic backdrop. Our EPRA earnings were 4p per share and our NAV closed at 96p per share. Secondly, from a property perspective, our portfolio continued to outperform the MSCI index for the eleventh consecutive year.

5:39 And on top of that, we continued our long term upper quartile performance since launch. And that's certainly a track record that we and the team here at PICTON have worked hard to over the year to continue to deliver that outperformance. Michael talked about some of the key statistics on the portfolio and that diversified portfolio and the strength of the portfolio has delivered 3% growth in not only our passing rent, but also contracted rent and ERV growth. And so we see a 29% reversionary potential between the March passing rent and the March ERV, and we'll come on to talk about how we see that in the context of earnings growth going forward. The last point on the property portfolio is to note that we've continued to invest in our portfolio. We've invested about 4,500,000 in capital expenditure projects, and we've worked hard to make progress on EPCs, increasing our solar capacity amongst other things.

6:43 The last key message for today is reminder on our valuable long term debt book. So we have a weighted average interest cost of 3.9%, which we is well below the current market rates and a conservative level of gearing at 28%. The value of that debt isn't seen in our EPRA NAV, but is seen in our NDV of a 101p per share. The difference between that and the £0.96 per share really shows the value of that long term debt. So moving on to some more of the details within the annual results. As I said, we've delivered a robust set of financials for the year ended March 2024.

7:30 Net assets closed at GBP $524,000,000 or GBP $9.06 per share, which was a reduction of 4% during the year, but we saw stable net asset values over the final quarter between the 01/01/2024 and the 03/31/2024. Our EPRA earnings were £21,700,000 for the year or 4p per share, which was an increase of 2% in the year. There's a bridge in the appendices, which shows the key driver of that increase. But the key message around that is really the growth in the underlying net rental income from the underlying portfolio. The net rental income grew by 4.5% per year. And the main driver for that was seen within the industrial sector and assets within the portfolio.

8:18 We will look at a couple of case studies, but as a headline, we had lease events with two of our top 10 occupiers and new rental evidence at our largest asset in Radlett. And we'll come on to talk about those in a little bit more detail. Overall, we're reporting a loss for the year of GBP 4,800,000, which is a result of the downward valuation movements during the year. At a headline level, valuations decreased by 3% during the year, which compared to a negative 5.5% MSCI, so ahead of the MSCI overall benchmark.

8:52 We paid dividends in the year of 19,100,000 and our dividend cover for the year was GBP 114%. Moving on to our debt book. As I mentioned on the first slide, there's a significant amount of value within PCTN and within its debt book. Firstly, we have a conservative level of gearing. It was 28% at the end of March and has since reduced further from that post year end, and we'll comment on the reasons for that later in the presentation. We have locked in fixed rate debt and a weighted average interest cost of 3.9%, which is clearly well below the current market interest rates. And in addition to that, we have long dated debt with maturities in excess of seven years. So no refinancing risks or exposure to volatility in interest rates looking into the medium term.

9:53 The table at the bottom just captures the key lenders within the portfolio. Certainly, Michael and I have met with those lenders recently. They continue to be supportive of PICTON and of the assets. And we've remained covenant compliant and met all the scheduled debt repayments.

10:15 So moving on to a slide looking forward at the drivers for earnings growth. If we step back and think about PICTON's drivers for earnings, I've talked about the capital structure and the debt, and that's fixed. I've also in the appendix, we've got some detail on our cost base. We are internally managed, which means our cost base isn't exposed to variations or movements in the net asset values or the gross asset values. So we have good visibility on our cost base because of that internally managed structure and also the fixed the fixed rate of debt. So really, when we're looking in a of when we're looking about earnings going forward, we're looking at where we see the net rental income growth coming from. And the chart on this slide just sets out the key components for the growth in that in unlocking that 29% reversion.

11:09 So moving from 44,700,000 to 57,600,000. And the key components of those, and again, Michael will come on to talk about some of the assets in a bit more detail, are unlocking the potential within the office repositioning, so the disposal of Angel Gate, which completed in April, and also the sale of Longcross, which is exchanged and we're hoping to complete within the financial year. If we look at the reversion within our vacancy, we've already had a significant amount of progress post year end. We've got GBP 80,000 of the GBP 3,700,000 highlighted here already completed in terms of reducing that vacancy.

11:56 And then finally, in terms of reversion, the final 3,700,000 on the chart, the majority of that reversion is coming through from our industrial assets. So when we talked about the annual results for the previous year and we've seen some of that reversion coming through in the industrial assets and driving net rental income and driving earnings, we expect that to continue through unlocking that reversion as the lease events come to pass over a period of time. And as a reminder, our WALT is around about four years. So that reversion is going to be unlocked as those lease events come to pass.

12:38 Thank you, Sarah. So I thought what I would just quickly do is highlight some of the actual property level activity within the portfolio over the last twelve months. Sarah has alluded to the outperformance of the property level in part driven by asset allocation and also the rental growth that we've seen and increase in income at a property level. You know? And this is despite as we look back over the twelve months. It feels a long time ago now, but, you know, it it was quite a difficult market, you know, a very, you know, recessionary, quite cautious approach. And the fact that we have with occupiers been able to grow grow those rents, I think, is no mean feat.

13:28 And come people that know us already, PICTON, we very much talk about being occupier focused, engaging with our occupiers, providing space that that that that occupiers want. And I think we put in a quote there from from one of the new occupiers to our portfolio last year and just, you know, really embodies the the proactive, collaborative, approach that we have with our occupiers, which which to my mind, helps, with, occupier retention, and it helps with, I think, some of the successes that we've achieved this year. I won't go through this everything on this slide, but but, actually, despite a more subdued market, letting activity, lease regear, rent review activity, all of which you will see is ahead of estimates in March the preceding year. So very much supporting that growth that I alluded to earlier. We saw rent collection over 99%.

14:34 So, again, you know, a really resilient occupier market. It's been different in the capital markets, the investment markets, but the occupational markets have been remarkably resilient. And Sarah alluded to the fact that we've been investing into the portfolio. It's something that we have done from the start. I think it's really important that your portfolio remains relevant. We've used the expression future proofing, but I think actually ensuring that your assets meet current occupational demand is key. And, actually, we've put some examples, across each of the sectors, where we've had activity, be it lease renewals, rent reviews, and the vast majority of those have been, ahead of, ERV, which, again, I think is really encouraging.

15:29 In the industrial portfolio, this is now nearly 60% of our entire business. We saw quite a significant increase in passing rent. This is driven by the the highly reversionary nature of our portfolio and uplifts on pretty much every lease event that we were dealing with. We've put two examples there on on two schemes. We've got one in Grantham in The Midlands, one in Harlow, which is Southeast UK. And you can see the scale of some of those increases, you know, circa 40% increases on rent reviews or lease regears.

16:14 And, you know, I think that is, you know, just evidence of us capturing that capturing that reversionary potential in the portfolio. And at the same time, we're clearly looking to extend leases as well, and that improves the overall quality of income as opposed to just the quantum. We've touched on repositioning some of our office assets. It it's very clear that, you know, the office sector has seen a more marked repricing than both industrial or retail in the last twenty four months, there's a definite polarization in the marketplace between assets that are no longer fit for purpose and need to be repositioned and those that are of higher quality and are maintaining occupancy.

17:09 So we very much believe that we've got a good quality office portfolio. We've got occupancy overall of 85%. 86% of our office assets are rated a to c from an EPC perspective, but we do have assets that we think we can unlock higher value for by looking at alternative uses. And predominantly, those uses are what I'm gonna call living uses. So be that straightforward residential, be it student accommodation. You know, hotel is another one depending on on location. But but that's what we're we're doing on very specific assets and assets that either are void now or might have a future void. But it's not something that we're looking to do across the whole portfolio because, as I say, good quality assets with high occupancy.

18:09 The other thing to point out is that that office assets generally have a lower valuation and rating per square foot than retail, and we saw quite significant value destruction in the retail sector over the last decade as pricing has reduced from a very high rate per square foot to where it is now. Offices come off a much, much lower base and are easier to repurpose, and that's why we've started to see, we think, a a floor in some of the market pricing as these residual values are hit. In terms of future proofing our portfolio, it's very much, around, meeting occupational needs, what what occupiers want.

19:00 Occupiers, on the whole, want greener, more efficient buildings, so that's something that we are very focused on and clearly timing that capital expenditure with lease events. So

19:12 so making sure when when or if buildings come back, that's when we upgrade them to give us the best possible chance of leasing and indeed attracting enhanced rentals. We're also doing things like ensuring we've got green lease clauses with our occupiers, And it's also about running buildings efficiently as well because you can have an efficient building, but if it's not run efficiently,

19:42 it it's less impactful. So engagement with occupiers is key. And, again, a couple of examples here, one on an office asset where we've restructured and extended the lease with an occupier, but as part of that transaction, we've put solar on the roof. So, again, created an EPC a rated building through just really some quite simple but yet pragmatic measures.

20:08 And in Warrington, again, when a unit came back, we've removed the gas. We've installed solar, and that enhances that building, and and enabled a a reletting very quickly after that project.

20:27 So what Sarah and I have spoken about to date has really been a review of last year, but I think the next element of the the presentation is a little bit more real time. Lina mentioned that that after our board meeting today, we'll be approving the next NAV trading update and dividend. But but we thought it'd be helpful to just give a bit more real time information about what's happening in the market. So,

20:56 I mean, we we have seen changes. The market is always changing, but I think the headlines are, you know, clearly interest rates have affected the property market. But there is a, in my view, sense of optimism returning in 2024 that that maybe the bulk of the repricing that we've seen over the last year to eighteen months has

21:25 worked through. As hopefully I demonstrated in the previous slide, occupier markets have been remarkably resilient. And I think a key a key data point actually is the fact that the repricing of property in the last couple of years has led in many instances to the

21:48 sort of market value of property being well below replacement cost. And that clearly has an impact in terms of redevelopment and new supply, then that is likely to be much more constrained in the coming years because of the the economics behind it. And I think we are likely to see suddenly for better quality assets, better rental growth coming through as a result of that constrained supply.

22:21 This is this is very much the case in the industrial sector and has been for some time. I think in the office sector, as I mentioned on that earlier slide, there is a a very clear differential between buildings that we would consider fit for purpose going forwards and space that is becoming more obsolete and clearly the the, you know, the trick there is to be in those assets that are that are future proofed, and there's definitely gonna be supply coming out of that sector as assets are repositioned. And then in retail and leisure, this has seen a massive pricing correction in recent years, but I do think, you know, the evidence we're seeing is that values broadly are stabilizing.

23:14 Now there's clearly challenges out there. I'm sure you've all heard, you know, about the

23:20 demise of carpet rights. I think Ted Baker is another retailer that's rumored to be in trouble at the minute. So it it does depend on your occupier lineup. But at a more macro level, we think rents have stabilized here, which makes that sector more interesting than it has been for some period of time.

23:41 The charts here really are just looking at this year, their MSCI numbers, but they just give a flavor of this resilience in the occupational markets. And if you look at the chart, you can see the gray bars are all property. The the diamonds are the different sectors we invest in.

24:03 But pretty much across all sectors this year, we've seen positive rental growth. It's not been strong, but nevertheless, positive rental growth across all sectors in the six months. And I think, you know, that improved picture that we see here does reflect that optimism that not only I mentioned about in the real estate sector, but actually with some of our occupiers as well and in the businesses therein.

24:37 The capital markets have been a little bit more challenging. Undoubtedly, liquidity is less than it has been, although probably improving this year relative to last. We've seen the chart again shows you the stabilization in in retail and industrial values. That's the top of the chart. Offices still showing showing some weakness on capital values, but even that is trending to a to a baseline. And I think, actually, if valued correctly, we're starting to see some stability in that sector as well. Clear clearly, very dependent upon occupational terms and asset quality. But I think, you know, from our perspective, you know, we sense that, you know, if we're not near the bottom of that repricing,

25:37 you know, we're very close. So the final couple of slides are just to summarize both last year and again without giving anything away ahead of tomorrow, but just provide some real time update of what's been happening since we released our our results.

26:03 Hopefully, we've demonstrated, you know, the reversion in the portfolio, our ability to unlock that reversion and create value through the asset management that we've been doing across the portfolio.

26:20 The business is in a good place. Our long term debt structure is hugely valuable in the current climate and gives us real confidence about the future and in terms of our earnings because there's no disruption through any refinancing. We think the ability of PCTN to evolve and

26:45 adapt as market conditions in the real estate sector change is coming to to the fore and some of the work that we've been doing in the office sector, I think, will start to show fruits in in this next financial year. We're widely aware though that the the listed real estate market has certainly been quite quite challenged over the last twelve months or so. Discounts remain more generally prevalent in in the listed space, But we do sense that that is changing, I think, in terms of our own roadshow experience that Sara and I have been doing in the weeks and months following our release of our results has definitely been well received.

27:37 Certainly, we've seen some good traction with the share price and our discount narrowing. But equally as a business, we recognize that we need to remain relevant to shareholders. Scale is important. And particularly with our internalized structure, if we can grow it in the right

27:57 way, that should deliver additional earnings growth for shareholders. And and then finally, just in terms of what's been happening since March, well, actually, we've managed to improve occupancy across the portfolio.

28:15 In part, that's been driven by leasing activity, but also the sale of one of our void office assets ahead of the March valuation. We've got planning permission at another one of our office assets that we're looking to reposition. And on Cardiff, where we had exchanged contracts in the last financial year, the buyer has, in the last few weeks, formally submitted planning for their student scheme there. So good progress on the key

28:52 alternative use to repositioning that's been happening. In terms of our debt, Sarah mentioned the numbers at March, but looking at it on a pro form a basis, having repaid the RCF, the LTV has dropped to 25%, and also all of our debt is fully fixed. No floating rate debt in the business.

29:16 Good leasing activity, rents ahead of the RV. We announced recently a number of transactions, including offices that we've leased in Bristol to an occupier that's expanding, lettings in Warrington and Bracknell, again, supportive of valuations and or ERV growth. And then finally, in April, but effective in May of this year, we announced a dividend increase. And I think that's on the back of the work that was done last year, the good level of cover that we showed, but also some of the progress that we've made in the first quarter of this year. And, obviously, we've mentioned previously about the desire to run the business with a fully covered dividend.

30:07 So lots, I think, of good data points there, and progress in the portfolio, that, certainly gives us confidence, but, hopefully, should be, comforting to investors also.

30:20 So I think I'm gonna end there, and happy to take questions. Great. Thank you, Michael, and thank you, Sarah. We have a number of pre submitted questions and then questions have been coming in live. I can already see there's quite a lot of steaming of the questions. So if I don't specifically, you know, read out the exact words of your question, please allow me just to bear with me when I theme some of them together because we do want to get through all of the questions. We've had a number of questions coming together on consolidation generally in the meat sector, mergers, and and acquisitions, and just asking what our what our plans are. I mean, maybe if I start and just pass to to Michael, we do believe that, you know, growing PICT in a way that meets with our objectives, growing us safely is in the interests of of shareholders for reasons of cost effectiveness, but, you know, all the benefits that scale would would bring us. And with our advisers, we do continue to actively look at at opportunities.

31:26 So it does form quite a key part of the board discussions. And, Michael, you did talk about post roadshow and some of the reaction. But did you want to add anything to that? Generally, we've had a number of questions coming together. Yes. And I and I think probably the only thing I would add is that, you know, with with Sarah on board now, you know, we're we're looking at options closely. We had conversations with a company last year that didn't progress, which was a shame, but, actually, that that's fine. You know, within the underlying business, we've got growth and growth potential. And, certainly, the interactions we've had with shareholders remain supportive of our approach, you know, which is about growing in a prudent way that's good for shareholders as opposed to just simply having scale.

32:22 And I think it's having that discipline but also that intent. Excellent. Thank you very much. And we've similarly, we've had three or four questions all around the office team. Now I do think that you answered quite a lot of that in the presentation. So we've had a question about pursuing alternative uses, which I think you've covered, you know, very well. But we've also been asking in terms of being asked the percentage of uplift expected when we convert offices into living spaces. I will kind of any indication of what kind of uplift that might that might bring us in general? So I I think there's a number of factors there. And, you know, if you think about the way the portfolio is valued quarterly, as we progress those initiatives, the independent valuers should be reflecting the progress or indeed the likelihood of those consents.

33:25 So I think the real example that I can give at the minute, because it's happened, is our asset that we sold in in Islington at the start of the year. From memory, because it was in the presentation, it said it was a 2% premium to the March value. It was a bigger premium to the December value. I think it might have been in the order of seven or 8%. But I think the point being, excuse me, is if we had not pursued that alternative use strategy there and not been able to unlock that, I think we may well have seen a write down in value of that asset in the order of 20%.

34:14 So it's not just about the premium to value. It's about protecting and ensuring that that your assets that you hold aren't subject to write downs because that's what's been happening in the market. And these the exact same point is true in Cardiff. You know? We we've we've structured a transaction that very much protects the downside position, and that particular transaction has an overage provision linked to the number of student bedrooms that the purchaser obtained. And so each asset is different, but I think, you know, those numbers give a range. Great. Thank you, Michael. And then just to close on the office questions, which we have quite a few on. We did a question in terms of is there any indication of what proportion of offices we we'd be happy to have within our portfolio or a target we'd like to get to.

35:13 Yeah. So so, I mean, I think the headline is that probably as we approach this financial year end, our office exposure will probably be low twenties, taking it down probably by a third. The majority of that reduction will come because we will be allocating out of that sector as we sell for these enhanced values as we go through alternative uses. We don't want to reduce office exposure entirely. We think it's a wrong time to actually be exiting some of these assets because, you know, the the market is quite dislocated at the minute. And, you know, hopefully, I demonstrate it, but we have a lot of good quality offices in good locations in the portfolio that are well leased and have a happy occupiers. And as a result of that, you know, both on a yield perspective and a capital value perspective, you know, certainly in relation to their cost of construction, they look very good value. And we don't have any desire to sell those assets at this point in the cycle.

36:28 Very clear. Thank you, Michael. And, Sarah, we've had some questions on on RCFs and and the like. And maybe I'll just start with what impact will the RCF maturity have on the business? So just by way of context, so we do have an RCF facility of 50,000,000. It is now currently undrawn, as Michael said, following the sale of Angel Gate. We repaid that in its entirety. So we're not reliant on that RCF in terms of any working capital going forward, and we do have surplus cash within the business to fund the capital projects that we have outlined in the short term. I think having said that, we've spoken to NatWest who remains supportive of us.

37:14 We do see value in an RCF in terms of the flexibility that it provides for CapEx and other capital projects. So it's something that we will be working on and working through to define the quantum and that refinancing next year. But in terms of the direct impact, think it's fair to say that we'll have very little impact as we're not expecting to draw it and it is at current market rate. Thanks, Sarah. And then a question that's coming during the presentation, when do your interest rate hedges mature? So we actually don't have separate interest rate hedges per se. We have fixed rate loans with Canada Life and Aviva, and the maturities of those are July 3031 and July thirty two. So those are effectively when those loans will be repayable, and that fixed rate will end.

38:11 So over seven years. Okay. Thank you, Sarah. And then and and finally, on on debt, just for clarification, a question has come in. Did you suggest debt is likely to be reduced in the future? Why is that at the cost of debt at 3.9% would seem to be healthy? So perhaps the the point of reducing debt is is is referencing the position as at the end of March. So between the end of March and as of today, we have reduced the level of debt, which has been the repayment of the RCF. So we're now in a position where we've repaid our fixed our floating rate expensive debt, which was costing just under 7%. There are no plans to further actively repay any of that fixed rate debt. There are some amortization payments, which are scheduled under the HD loans, but there is no plan to repay that those fixed term loans as you've as investor rightly points out, those are at attractive rates, which we intend to keep those. Indeed.

39:13 Thanks for the clarification. Michael, on the kind of opportunity sides falling on from the scale question, had a question come in during the presentation. Could you tell us about the extent of any institutional and open end funds overhang a property awaiting sale? What opportunities might this provide to PICTON? So, you know, there is still a market that I think has limited or reduced liquidity, and there are definitely opportunities. I suppose it's a little frustrating for PCTN that we don't have a war chest at the minute because I think it would be something that we could use effectively.

40:02 You know, we've certainly seen some funds looking to wind up and go into runoff. And, undoubtedly, there are still generally a theme of redemptions from open ended vehicles. And we're also seeing, I think it's fair to say, some disposals that are being driven by, dare I say it, sort of lend lender lender need, I you know, companies that perhaps have even if they've not overleveraged in the previous cycle, but just the changing cost of debt has meant that it's difficult to refinance, so they're looking looking to sell.

40:47 So I think the headline is that there are opportunities there. We've been quite prudent, I think, in the certainly this year because we wanted to repay debt, reduce LTV, really wait to see for a bit more clarity in the marketplace around stabilization in values. It now does appear that we're through the worst of the interest rate rises. In fact, you know, I think there is an expectation that interest rates will be lower at the end of the year as they are today. That will make using the RCF more more attractive and something that we, you know, will proactively look at as we move through through the year. And, certainly, as I say, investors that we've spoken to would like us to be front foot and take advantage of some of the opportunities in the marketplace, and that's what we'll do.

41:48 Thank you. And the other yes. It was the other side of that point. We've had a question come in during the presentation in terms of properties that we might have for sale in the open markets. And if so, could we give details on any of them? Yes. I mean, I can't give specifics, but I think that the key focus of the Dereset PICTON disposal program is entirely at the minute skewed to low yielding assets in the office sector that we are repositioning for higher value alternative use. So that's clearly going to generate receipts. You know, it already has, but but there are more planned.

42:35 And, you know, it's that capital that we can look to redeploy into assets that we think have both better income characteristics, but also upside, you know, using the skills that we have in terms of asset management and and and value creation. Thank you. A couple of questions in terms of coming around the the narrowing of the discount and our plans. And maybe just from the board perspective, we continually evaluate options to to create value, as Michael and Sarah have said. We do think there's more to to come in in unlocking the reversion to drive incomes and and earnings goals. But any other thoughts on that, Michael?

43:21 Yeah. I mean I mean, clearly, discounts have been prevalent in the real estate sector. Much has been spoken about sort of, you know, London and the equity markets, and, you know, PCTN has been caught up in that. But equally, I think, you know, there's been, or maybe twelve months ago, there was concern about perhaps some of our office assets and indeed whether the PCTN dividend really was high enough to reflect, you know, base rates and alternatives elsewhere. I think a combination of stabilization in the market, you know, the fact that we've been able to demonstrate recycling of capital of those offices, you know, repayment of debt, reduction in costs, increase in dividend. You know, there's lots of milestones, I think, there that that are are reassuring, and and we're also very mindful of the fact that we need to be promoting PCTN and promoting the real estate sector actually. And, you know, at this particular point in the cycle, some of the, you know, advantages that it has. And I think the traction that we've we've had, you know, in recent months, not that we're complacent in any shape or form, but I think it is is encouraging. And and, hopefully, we'll continue that trend. You know, as I said, we've certainly seen quite a marked narrowing

44:53 of our discounts in the last sort of six to eight weeks. And and I can't believe it's one thing, but but we have to work hard on multiple fronts to to get the rating back to where we'd like it to be. We do. And that's very much a a key focus for the board in terms of, you know, our obligations and the interest of our existing shareholders and the excellent works that the team are doing on the road shows and the interest from a widening investor base and new investors, which I think can only be good for us as we as we move forward. Sorry, Michael. Did you want to say something there? No. No. No. I think we've really covered all of the topics in terms of all the pre submitted questions that I've been ticking off, and we have covered all of the live questions that have come in during the presentation.

45:45 So, yeah, I'll pause just to see if anyone wants to do any last minute typing. Nope. Okay. Perfect. Lina, Michael, Sarah, thank you very much for answering those questions you can from investors. Of course, the company can view all the questions submitted today, and we'll publish those responses on the Investor Meet company platform. But just before redirecting investors to provide you with their feedback, which is important to the company, Michael, I just wondering if I could ask you for a few closing comments. Well, firstly, just to thank everyone for their time and listening today and the questions submitted. It's really great to engage with shareholders and get their thoughts and feedback, and that comes through in the types of questions that are asked. As Lida mentioned at the start, you know, we will be providing a trading update to the market tomorrow.

46:36 So that that's real time news if that makes sense. So we look forward to doing that. And, yes, we thank you all, and have a good day, everyone. Thank you very much. Thank you. Thank you. Perfect. Thank you for updating investors today. Could I please ask investors not to close the session as you now be automatically redirected to provide your feedback in order the management team can better understand your views and expectations? This then take a few moments to complete, and I'm sure be greatly valued by the company. On behalf of management team of PCTN PROPERTY INCOME, we'd like to thank you for attending today's presentation, and good morning to you all.