Palace Capital sells Stockport, Leeds properties for £3.7m
Property investor Palace Capital has sold a warehouse in Stockport and an office building in Leeds for a combined £3.7m.
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Palace Capital
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17:09 10/05/24
The AIM-listed company sold vacant freehold of Allen House in Greater Manchester for £1.55m, which was slightly above the book value.
It was part of the sequel portfolio Palace Capital bought from Quintain in October 2013 and the property has been empty since September 2015 when the previous lessee, furniture supplier Mountrose, which is now in administration, surrendered its lease.
Chief executive Neil Sinclair said that proceeds received will be reinvested into an income producing property and that selling the property will mean that Palace will save about £185,000 per year of empty rates, security, insurance and other running costs.
Palace also sold its long leasehold stake in Warwick House in Leeds to a private investment group for £2.1m, which is £750,000, or 54%, above book value.
The Leeds office building, which was also part of the Quintain portfolio, is currently on a 125-year lease from Leeds City Council, starting from 1980 at a minimum ground rent of £8,000 per year or 12.12% of rents received.
The building is currently let to support services company Interserve Working Futures with the lease expiring on 30 August 2019 at a current rental income of £196,250 per year, with an option to break the lease on 31 August 2017 and 31 August 2018.
The current ground rent payable to Leeds City Council is £23,786 per year with net income of £172,464 per year received.
Sinclair said the sale of the Leeds office building continues the company’s policy of recycling capital from properties where it believes there is little or no opportunity for growth.
“Warwick House is not only in a secondary office location but the tenant has a break option in August 2017 which, if exercised, would leave us with an empty property within seven months," he said.
Shares on Palace Capital were down 0.16% to 351.95p at 0901 GMT.