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Research: Real Estate
York City Council has approved Palace’s planning application to demolish Hudson House and replace the existing office building with a mixed-use development comprising residential, office and commercial areas. While we have not changed our estimates, pending further information on the costs and timings of the project, the approval removes one risk associated with the asset and may have a positive effect on its next valuation.
Written by
Palace Capital |
Approval granted for Hudson House plans |
Flash note |
Property |
21 August 2017 |
Share price performance
Business description
Analysts
Palace Capital is a research client of Edison Investment Research Limited |
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York City Council has approved Palace’s planning application to demolish Hudson House and replace the existing office building with a mixed-use development comprising residential, office and commercial areas. While we have not changed our estimates, pending further information on the costs and timings of the project, the approval removes one risk associated with the asset and may have a positive effect on its next valuation.
Year end |
Revenue (£m) |
Adj. EPRA earnings* (£m) |
Adj. EPRA EPS* (p) |
EPRA NAV/ |
Price/EPRA NAV/share (x) |
DPS |
Yield |
03/16 |
14.6 |
4.6 |
18.9 |
414 |
0.95 |
16.0 |
4.1 |
03/17 |
14.3 |
5.7 |
22.2 |
443 |
0.89 |
18.5 |
4.7 |
03/18e |
14.1 |
5.5 |
21.7 |
449 |
0.87 |
19.0 |
4.8 |
03/19e |
14.8 |
6.3 |
24.9 |
455 |
0.86 |
19.5 |
4.8 |
Note: *Adjusted EPRA earnings exclude revaluation gains, profits or losses on disposals of investment properties and surrender gains on early lease terminations.
Hudson House is a 1960s office block built on former Network Rail land inside and adjacent to York’s Roman city walls, and accessible through an arch from the railway station. Palace acquired the asset as part of the Signal Portfolio from Quintain in 2013 for £3.8m and had previously secured permission for change of use. At 31 March 2017 it was valued at £14.9m. Today’s approval will allow Palace to replace the current 103,000 sq ft office building with a modern property with a similar footprint comprising 127 flats, 34,000 sq ft of offices, 5,000 sq ft of commercial space and parking. We expect the project will take until 2020 to complete and will revise our estimates when further detail is available. More information on the approval and Palace’s overall strategy is available in the company’s regulatory news announcement and corporate video.
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Disclaimer
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Disclaimer
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Research: Investment Companies
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