REG - Palace Capital PLC - Acquisition of Maidenhead office building

Palace CapitalAnnouncement

17/01/2022 07:05

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RNS Number : 5564Y  Palace Capital PLC  17 January 2022

17 January 2022

Palace Capital plc

("Palace Capital" or the "Company")

Palace Capital acquires Maidenhead office building for £10.25m

- Redeployment of disposal strategy proceeds underway -

Palace Capital (LSE: PCA) the Main Market property investment company that has
a diversified portfolio of UK commercial real estate in carefully selected
locations outside of London with a focus on the office & industrial
sectors, announces that it has acquired 22 Market Street, an office building
in the centre of Maidenhead, Berkshire for £10.25 million reflecting a net
initial yield of 6.83%.

The transaction has been funded using both the existing NatWest revolving
credit facility and proceeds from the Company's £30 million disposal
strategy, which aims to generate capital from mature or non-core properties
for redeployment into opportunities with more attractive returns profiles.
Following this acquisition, and combined with the additional £1.3 million of
annual income generated since the start of the financial year through active
asset management, including lease renewals, rent reviews and new lettings, the
new income added to the portfolio rent roll now exceeds in excess of
£1million per annum, that was lost through the disposal programme.

The newly acquired property which has an Energy Performance Certificate rating
of B has recently been comprehensively refurbished and comprises 21,852 sq ft
across three floors. It is fully let on a 10 year lease, from August 2021 with
a tenant break option at the end of the 5(th) year, to Techtronic Industries
EMEA Ltd, a subsidiary of Hong Kong listed Techtronic Industries which has a
market capitalisation of £26 billion, delivering an annual rent of £718,475.
Two small retail units on the ground floor bring the total net income from the
asset to £747,374 per annum.

The acquisition is in line with Palace Capital's disciplined investment
strategy focused on good quality regional towns and city centres that are
easily accessible and close to public transport, as well as the amenities that
employees are keen to have near their place of work. Set in the Thames Valley
between Reading and Slough, Maidenhead is in an affluent area of the south
east, well connected to the UK's motorway system and Heathrow airport, making
it an attractive location for international businesses looking for space close
to London. Like many towns and cities outside of the capital, it has
experienced a reduction of good quality office space alongside rising
demand.

Neil Sinclair, Chief Executive of Palace Capital commented, "The Thames Valley
is home to a host of global, blue chip companies and is a high demand location
because of its accessibility; but despite this, in common with the trend we
are seeing across the UK, office space availability has reduced significantly
over recent years. Maidenhead is on track to benefit not only from the opening
of the Elizabeth Line in 2022, with fast access to London Heathrow, the City,
Canary Wharf & West End, but also the nearby Nicholson Quarter mixed use
development, where construction is expected to commence in 2023.

"We are highly selective when identifying potential opportunities,
particularly in this market where value is very difficult to access, and we
are therefore very pleased to have been able to embark on recycling the
disposal proceeds with this exciting investment."

Finn& Co acted for Palace Capital & Gerald Eve acted for the vendors.

 

ENDS

For further information please contact:

PALACE CAPITAL PLC

Neil Sinclair, Chief Executive

Tel. +44 (0)20 3301 8331

Matthew Simpson, Chief Financial Officer

Tel. +44 (0)20 3931 9175

Broker

Numis Securities

Heraclis Economides / Oliver Hardy

Tel: +44 (0)20 7260 1000

Broker

Arden Partners plc

Corporate Finance: Paul Shackleton / Elliot Mustoe/George Morgan

Corporate Broking: James Reed-Daunter

Tel: +44 (0)207 614 5900

Financial PR

FTI Consulting

Claire Turvey / Katie Hughes

Tel: +44 (0)20 3727 1000

palacecapital@fticonsulting.com

About Palace Capital plc (www.palacecapitalplc.com)

Palace Capital plc (LSE: PCA) is a UK REIT that has a £273 million
diversified portfolio of UK regional commercial property. The Company
maintains a disciplined investment strategy focused on towns and cities
outside of London that are characterised by thriving local economies and
strengthening fundamentals. Within those locations the highly experienced
management team select assets that provide opportunities to drive both capital
value and long-term rental income through tailored active asset management
programmes ultimately delivering attractive shareholder returns.

www.palacecapitalplc

 

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