Rockwell letting update

RNS Number : 3250C

Palace Capital PLC

16 January 2015

 



Palace Capital plc

("Palace Capital" or the "Company")

PALACE CAPITAL COMPLETE LEASES WITH ROCKWELL AUTOMATION

Palace Capital, the AIM quoted property investment company focussing on regional secondary property, announces that it has completed the two leases with Rockwell Automation which were referred to in the Company's interim statement of 27 November 2014.

The Sequel Portfolio, which the Company acquired in October 2013, included two office buildings in Milton Keynes.  These buildings comprised 14,434 sq ft & 23,897 sq ft making a total net area of 38,331 sq ft.  Each was let until 25 December 2014 with the tenant's option to determine on 24 June 2014.  This meant that the Company had a lessee with a certain term of only 8 months at the time of completion of the acquisition of the Sequel Portfolio.

The Company commenced discussions with Rockwell Automation, a subsidiary of one of the US's largest companies, with a view to them renewing their leases on the buildings,  provided the buildings were refurbished to an agreed specification. Terms were  agreed, Palace Capital committed £2.4m for the refurbishment and building works commenced in June 2014. These works were concluded just before Christmas and the buildings have been handed over to Rockwell Automation on time and on budget.

Rockwell Automation have now taken new full repairing and insuring leases on each of the buildings for a term of 12 years with provision for upward only rent review at the 4^th and 8^th years.  The rents are £150,633 and £248,283 per annum, exclusive.  The total rent receivable by Palace Capital is  £398,916 per annum. As this equates to £10.40 per sq ft the Company considers that there is considerable scope for an increase in rental in December 2018.

Neil Sinclair, the Chief Executive of Palace Capital, said:

"I am delighted that Rockwell Automation had signed a lease for 12 years on both these buildings with rent reviews every  4 years and no option to break.  We had a first class project manager in Emmaus Consulting and a first class contractor in Area Squared. This was a team effort which produced a highly satisfactory outcome"

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Date: 16 January 2015

For further information, please contact:

Palace Capital plc	Tel. [phone]
Stanley Davis, Non-Executive Chairman
Neil Sinclair, Chief Executive
Allenby Capital Limited	Tel. [phone]
Nick Naylor, Corporate Finance
James Reeve, Corporate Finance
Arden Partners plc	Tel: [phone]
Christopher Hardie, Corporate Finance
Ciaran Walsh, Corporate Finance
Broker Profile (Financial PR)	Tel. [phone]
Simon Courtenay

 

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