Palace Capital sells Bristol leasehold at current book value
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Property investment company Palace Capital announced on Thursday that it sold the long leasehold interest in Stratton House, Cater Road, Bristol to the MCR Property Group for a consideration of £2.25m, equivalent to current book value.
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The AIM-traded firm said the property, which was erected in the 1970s, is part of the original Sequel Portfolio acquired from Quintain in 2013.
It comprises a warehouse unit of 52,600 sq ft let to Wincanton Holdings for a term of 15 years expiring in February 2031, containing a break option in February 2026.
Current rental stood at £110,831 per annum until February 2018, when it increases to £190,000 per annum exclusive.
There is a rent review in February 2021 and February 2026 if the lessee does not break.
Palace Capital said the property also included a vacant office and industrial unit of 25,100 sq ft making for a total of 77,700 sq ft.
The latter was originally let to Balfour Beatty, but it vacated the unit in June 2017.
Palace Capital’s board said the property was held on lease from Bristol City Council for a term of 125 years from April 1983 at a current rent of £39,480 per annum, subject to five-yearly reviews to 14% of open market value.
“We are very pleased to have sold this property at book value,” said chief executive Neil Sinclair.
“Following the departure of a key tenant, the economic rationale for our continued investment was low.
“As has been the case throughout the last 12 months, Palace Capital has demonstrated again that it is capable of recycling its capital quickly and at no detriment to its net asset value.”