REG - Palace Capital PLC - Acquisition of Bank House in Leeds <Origin Href="QuoteRef">PCA.L</Origin>

Palace CapitalAnnouncement

09/03/2015 07:01

RNS Number : 8386G
Palace Capital PLC
09 March 2015
Palace Capital plc
("Palace Capital" or the "Company")
PALACE CAPITAL ACQUIRES BANK HOUSE
IN LEEDS FOR 10 MILLION
Palace Capital, the property investment company that focuses on commercial property outside London, has exchanged contracts to buy Bank House on King Street in the centre of Leeds from a major pension fund for a cash consideration of 10 million. The consideration will be satisfied from Palace Capital's existing cash resources.
Bank House produces a gross rental income of 910,310 per annum and a net income of circa 864,000 per annum. This represents a net yield of 8.1 per cent after transaction costs.
Bank House was originally built in 1968 for the Bank of England, who still occupy the lower two floors. It was recently listed as one of 14 post war buildings of historic interest. The listing predominantly refers to the exterior, meaning interior reconfiguration could potentially boost rental income for the Company.
Bank House is situated in the heart of the traditional business district in Leeds and comprises a net floor area of 88,000 sq ft. It is let to the Bank of England, Axa Insurance and Walker Morris, the leading firm of solicitors in Leeds. The majority of the leases do not expire until 2019/20. 
There is currently 8,800 sq ft of vacant space. The Company will be taking active steps to effect early lettings to take advantage of a resurgent Leeds office market. The Directors believe that through active management the net yield of Bank House could, over time, increase to around 10 per cent. As the building is listed there is no liability for empty rates.
In August 2014, Palace Capital raised 20 million with investors, not only to facilitate the acquisition of Property Investment Holdings ("PIH") but also to take advantage of opportunistic acquisitions. Bank House fulfills the Company's criteria as it is in a first class location in a large and growing UK city.
Neil Sinclair, Chief Executive of Palace Capital, commented: 
"I am delighted to announce this acquisition today. Leeds is one of the UK's largest business centres outside London 
"We have assessed a number of potential opportunities since the acquisition of PIH and, in the Board's view, Bank House represents an opportunity to provide excellent returns for our shareholders. 
"This is another example of how we are growing the Company through regional and secondary commercial property acquisitions.We are continuing to seek and evaluate additional acquisitions of property portfolios and appropriate single assets and are positive about the prospects of further enhancing shareholder value."
Date: 09 March 2015
For further information contact:
Palace Capital Plc
Stanley Davis, Non-executive Chairman
Neil Sinclair, Chief Executive
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
Tel. +44 (0)207 614 5917
Broker Profile (Financial PR)
Simon Courtenay
Harry Rippon
Harriet Jackson
Tel. +44 (0)20 7448 3244

This information is provided by RNS
The company news service from the London Stock Exchange
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