Business
Industrial properties disposal and Trading Update
Industrial properties disposal and Trading Update.
About this update from Palace Capital Plc
[{"type":"text","content":"\n\n5 May 2023\nPalace Capital plc\n(\"Palace Capital\" or the \"Company\")\nSignificant industrial properties disposal and Trading Update\nPalace Capital today announces the successful disposal of all but one of its industrial properties, together with a trading update for the year ended 31 March 2023 ahead of its preliminary results which will be released on 15 June 2023.\nSignificant industrial properties disposal\n· The Company has exchanged contracts for the sale of six industrial properties to Clearbell Property Partners IV LLP (Clearbell), a fund managed by Clearbell Capital LLP for a cash consideration of £34.0 million, which reflects a NIY of 6.2%. The disposal is 3.0% ahead of 31 March 2023 book value of £33.0 million and a discount of 1.7% to 30 September 2022 book value of £34.6 million. Completion of five of the properties is expected later this month with the sixth property expected to complete in early July.\n· The six properties, which generate annual rental income of £2.2 million, are Bone Lane, Newbury; Courtauld House, Coventry; Saxon House, Kettering; Point Four Industrial Estate, Avonmouth; Black Moor Road, Verwood; and Clayton Industrial Estate, Burgess Hill.\n· The Company intends to deploy the proceeds from the sale to reduce the Company's debt. On completion of the disposal of all six assets, proforma net debt is expected to be c.£25 million and proforma LTV based on the valuation as at 31 March 2023 is expected to be c.16%. Including other asset sales disposed of in FY24 to date and noted below, proforma net debt and proforma LTV is expected to be c.£18 million and c.12% respectively.\nStrategy overview\nAs previously announced, the Board's strategy is to focus on maximising cash returns to shareholders, whilst continuing to remain mindful of consolidation in the Real Estate sector. As part of its considerations, certain properties are either being marketed for sale or are being prepared and readied for sale whilst other properties are undergoing asset management initiatives in order to prepare them for sale at a future date. Given its low leverage, the Company remains well placed in terms of flexibility and optionality regarding the timing of its disposal programme and other strategic initiatives.\nFY23 Disposals\n· During the year ended 31 March 2023, the ...