Palace Capital plc
("Palace Capital" or the "Company")
Lettings and Lease Renewals Update
Palace Capital, the AIM quoted commercial real estate company, is pleased to announce a number of new lettings and lease renewals in its Sequel and Hockenhull portfolios. These lettings and lease renewals continue the Company's strategy of increasing rental income and reducing the irrecoverable expenditure, such as empty rates and service charge shortfalls, in its portfolio of regional commercial property.
Palace Capital completed the £32m acquisition of Property Investment Holdings Ltd during the last week of August 2014, along with a £20 million capital raise.
At Hudson House, Toft Green, York a major refurbishment of the 100,000 sq ft office building is planned for 2016 and the Company continues its strategy of short term lettings and lease renewals. 5,200 sq ft office space has been let to Aecom Ltd for £57,089 per annum for a term of 5 years (subject to a break clause in December 2015). In addition, Thales UK have renewed their lease on 5,100 sq ft of office space in Hudson House until December 2015 at a rental of £37,506 per annum. For the first time since the acquisition of the Sequel portfolio the rental income from Hudson House is in excess of the associated irrecoverable expenditure. This is a direct result of Palace Capital's active management strategy.
Sandringham House, Harlow (a 32,750 sq ft office building) is now fully let producing rental income of £346,604 per annum. Sandringham House was valued at 31 March 2014 at £2,260,000, when 6,831 sq ft was still vacant. A 3,363 sq ft suite has been let to Bantec Ltd, an existing tenant, until July 2018 at an initial rental of £16,500 per annum, rising to £29,500 per annum and the final vacant suite of 3,468 sq ft has been let to Keelings Fresh International until August 2019 (with a break in 2017) at a rental of £24,518 per annum.
Meadowcourt One, Sheffield: The First Secretary of State Health Protection has renewed a lease on 2,561 sq ft until July 2015 at a rental of £34,350 per annum.
The Hockenhull Portfolio's only void (being a small shop at 52, Beam Street, Nantwich) has now been let for a term of 5 years to a nail bar operator at a rental of £9,750 per annum.
Neil Sinclair, Managing Director, commented:
"These new lettings and lease renewals increase our rental income by over £107,000 per annum and reduces the irrecoverable expenditure by approximately £110,000 per annum. This results in a cash flow increase of over £217,000 per annum, a great result for the Company.
Our strategy remains one of intensive active portfolio management to increase the Company's net yield, thus supporting our dividend paying strategy to benefit our shareholders."
For further information contact:
Palace Capital plc Tel. +44 (0)20 7722 7603
Stanley Davis, Non-executive Chairman
Neil Sinclair, Managing Director
Allenby Capital Limited Tel. +44 (0)20 3328 5656
Nick Naylor, Corporate Finance
James Reeve, Corporate Finance
Arden Partners plc Tel: +44 (0)20 7614 5917
Christopher Hardie, Corporate Finance
Katelin Kennish, Corporate Finance
Broker Profile (Financial PR) Tel. +44 (0)20 7448 3244