Palace Capital PLC £20 million property acquisition in Newcastle (2118N)
August 07 2017 - 1:00AM
UK Regulatory
TIDMPCA
RNS Number : 2118N
Palace Capital PLC
07 August 2017
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014 ("MAR").
Palace Capital plc
("Palace Capital" or the "Company")
Palace Capital completes GBP20 million property acquisition in
Newcastle
Palace Capital, the property investment company that focuses on
commercial property outside London, announces that it has completed
the acquisition of the entire issued share capital of SM Newcastle
OB Ltd ("SM Newcastle") for GBP20.0 million. The Company previously
announced that terms had been agreed on this acquisition in the
Company's Portfolio Update of 2 May 2017. The acquisition has been
funded by a new loan of GBP11.5 million from Santander, with the
balance being funded from the Company's own cash resources.
SM Newcastle owns the freeholds of 1, 2 & 3 St James Gate,
Newcastle-upon-Tyne as well as the Jury's Inn Newcastle-upon-Tyne
(together the "Properties"). The Properties are situated close to
Newcastle Railway Station and were originally developed by The
McAleer & Rushe Group.
The Jury's Inn (which comprises a 274-bedroom hotel), 1 St James
Gate (comprising 61,000 sq ft of office space) and the residential
element of 3 St James Gate (comprising 145 apartments) have
previously been sold on 999-year leases.
2 St James Gate is a fully multi-let office building of 82,500
sq ft, erected in 2006 and producing a net income of GBP1.605
million per annum. Tenants include the National Lottery Charities
Board, Eldon Insurance Services, Serco and UBS. The small retail
element of 3 St James Gate, comprising 16,500 sq ft, produces a net
income of GBP0.16 million per annum.
The total net income from the Properties is GBP1.765 million per
annum which, after costs, produces a net initial yield of 8.6%.
Neil Sinclair, the Chief Executive of Palace Capital,
commented:
"We are delighted with this corporate purchase, which continues
our strategy of acquiring high quality buildings close to transport
links in major cities. We have bought the Properties on an
attractive initial yield resulting in over GBP600k per annum in
excess of the income foregone on our recent disposals and the
recent administration of our tenant at Marsh Barton, Exeter. This
acquisition increases the value of our portfolio to over GBP200
million.
"This transaction demonstrates our skills at recycling our
capital - we have used the proceeds of our recent sales on
unencumbered properties to fund approaching 50% of the
consideration."
Knight Frank acted for Palace Capital and Steerforth Partners
& Sanderson Weatherall acted for the vendors.
Date: 7 August 2017
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
Tel. +44 (0)20 3763 3400
About Palace Capital plc:
Palace Capital is a UK property investment company admitted to
trading on the AIM Market of the London Stock Exchange (LSE: PCA).
The Company is not sector specific and looks for opportunities
where it can enhance the long-term income and capital value through
asset management and strategic capital development in locations
outside London. In its last reported financial year, Palace Capital
produced a 20.0% increase in adjusted profit before tax, a 7.0%
uplift in EPRA NAV and a 16.0% increase in dividends.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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