Palace Capital plc
("Palace Capital" or the "Company")
PALACE CAPITAL CONCLUDES SIGNIFICANT LETTING IN EXETER
Palace Capital, the property investment company that focuses on commercial property outside London, announces that it has let the former Polestar Building (a 113,000 sq ft industrial/warehouse) on the Marsh Barton Trading Estate in Exeter.
The Company announced in its year end results that administrators had been appointed to its tenant occupying the Polestar Building, Polestar UK Print ("Polestar"), and that it was endeavouring to negotiate a 12-month licence from June of this year with the newly formed company that had purchased the assets of Polestar. This was in order to provide continuity of income to the Company pending a possible redevelopment of the property. However, the newly formed company itself went into administration and the assets of Polestar were then subsequently sold to a venture capital group. This had the effect of a reduction in the value of this property as at 31 March 2016 and was reflected in our full year accounts.
Since early July 2016, the Directors have been in detailed discussions with the new owners of Polestar about remaining in the Polestar Building on a mutually acceptable basis.
Legal formalities have now been concluded with Wheaton's Exeter Ltd, who have taken a new 10-year lease from 9 August 2016, with no right to break, at an initial rental of £282,000 per annum exclusive for the first 18 months, rising to £452,000 per annum exclusive on 09 February 2018 until a rent review in August 2021, when the rent will rise to no less than £485,900 per annum exclusive.
Neil Sinclair, the Chief Executive of Palace Capital, commented
"This is an excellent deal for Palace Capital. With the administration of Polestar we were faced with not only a loss of income but the added burden of empty rates after 6 months and security, maintenance and insurance costs which could have affected our profitability. Through our active management style we have secured a new tenant on attractive terms.
"Our goal is always to sustain and ultimately increase our income so that our shareholders benefit from an attractive yield and capital growth."
Date: 14 November 2016
For further information, contact:
Palace Capital plc
Neil Sinclair, Chief Executive
Stephen Silvester, Finance Director
Tel. +44 (0)20 3301 8331
Allenby Capital Limited (Nominated Adviser and Joint Broker)
Nick Naylor / James Reeve
Tel. +44 (0)20 3328 5656
Arden Partners plc (Joint Broker)
Chris Hardie / Ciaran Walsh
Tel. +44 (0)207 614 5917
Capital Access Group (Financial PR)
Scott Fulton / Jessica Bradford
Tel. +44 (0)20 3763 3400