Disposal of Gelderd point & update

RNS Number : 4436A

Palace Capital PLC

19 February 2014

 



19 February 2014

PALACE CAPITAL PLC

("Palace Capital" or the "Company")

DISPOSAL OF GELDERD POINT, LEEDS AND OTHER DISPOSALS AND LETTINGS

Palace Capital, the AIM quoted property investment company focussed on investing in the UK's secondary property market outside London, is pleased to announce an update on recent activity.  It has agreed a number of disposals and new lettings. 

Disposal of Gelderd Point, Leeds

As part of the Company's strategy to manage its property portfolio actively, Palace Capital has completed the sale of its freehold interest in Gelderd Point, Leeds, a 20,500 sq. ft. office building. The property, which has been vacant for some time, has been sold for a cash consideration of £1.075 million, which after costs represents a 13% premium to its book value.  The property has been sold to a Lincolnshire based property company. The proceeds of the disposal will be applied towards a further reduction of bank borrowings.

Portfolio Activity Update

In addition we have also recently completed the following disposals and lettings:

1)   The sale of a 999 year lease on Unit F, Argent Court, Tolworth, Surrey. This is a 2,070 sq. ft. building where the lease to the existing tenant had expired last December and which has been sold on a long lease for £270,000 to the occupier.

2)   The sale of an 800 year lease on Unit 3, Meadowcourt 1, Sheffield. This is a 1,760 sq. ft. vacant office unit which has been sold for a cash consideration of £135,000 to the South Yorkshire Police Federation.

3)   We have let a further 4,000 sq. ft. of space at Hudson House, York, our 103,000 sq. ft. office building adjoining York Station where we are planning a major refurbishment. The office space has been let on short leases to Carillion Construction Ltd & The Keystone Project at an aggregate rental of £40,110 per annum exclusive.

The Directors of Palace Capital believe that these disposals have the following principal benefits for the Company:

1)   net debt is reduced by £1.1 million from £18.9 million to £17.8 million, reducing the Company's interest liability by £46,750 per annum; and

2)   the irrecoverable expenditure mainly comprised of empty rates of circa £200,000 per annum is no longer payable by the Company.

Commenting on the transactions Neil Sinclair, Managing Director, said

"The disposal of Gelderd Point, Leeds means that since the completion of the acquisition of the Sequel Portfolio last October, the two vacant office buildings have been sold at above book value.

"Coupled with the other sales and lettings referred to in this announcement and those previously announced, the Company has reduced its net debt and irrecoverable expenditure considerably, thereby significantly increasing cashflow. The Company continues to manage its properties very actively."

-ends-

For further information contact:

Palace Capital Plc	Tel. [phone]
Stanley Davis, Non-executive Chairman
Neil Sinclair, Managing Director
Allenby Capital Limited	Tel. [phone]
Nick Naylor, Corporate Finance
Mark Connelly, Corporate Finance
Arden Partners plc	Tel: [phone]
Christopher Hardie, Corporate Finance
Broker Profile (Financial PR)	Tel. [phone]
Simon Courtenay    Tamsin Shephard

 

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