Palace Capital (PCA); trading update: disposal of 50 residential units for £18.2m

Published on 02-05-2019 07:57:47
Author Sparks Team
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Palace reported a gross passing rent excluding residential portfolio held for sale of £17.7m p.a., with net effective rental income at £15.8m p.a in their trading update for the year ended March 2019. Excluding properties under development, the estimated rental value (ERV) of the portfolio is £21.5m.

Palace acquired 1 Derby Square, Liverpool in December for £14.0m, generating £1.0m annually with reversionary potential. 37 leases and rent reviews were completed, at an average 14% ahead of ERV, producing £3.4m rent p.a. A £26.5m facility was secured with Barclays for the Hudson Quarter development in York. Palace is in talks with the Elmbridge Borough Council to grant a formal planning approval in Q3 of the current year for development of three retail units and 28 apartments in Surrey.

Palace’s cash position saw a boost due to the sale of the majority of the Warren Residential Portfolio and other sales. This, along with unutilised debt facilities, puts Palace in a good position to fund the company’s refurbishment and development projects and future acquisitions. Gearing remains conservative at 33% net loan to value.

Neil Sinclair, Palace’s Chief Executive, said: “We…are in an excellent position to take advantage of opportunities that meet with our investment criteria. This provides the Board with the confidence to recommend that the current level of dividend payments is maintained.”

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