Palace offloads industrials

Palace Capital has sold all but one of its industrial assets to Clearbell Property Partners IV for £34m – a 6.2% yield. The portfolio has six assets: at Bone Lane, Newbury; Courtauld House, Coventry; Saxon House, Kettering; Point Four Industrial Estate, Avonmouth; Black Moor Road, Verwood; and Clayton Industrial Estate, Burgess Hill, which provide an annual income of £2.2m. Palace said the disposal was 3% ahead of 31 March 2023 book value of £33m and a discount of 1.7% to its 30 September 2022 book value of £34.6m. Completion of five of the properties is expected later this month, with the sixth property expected to complete in early July. Proceeds from the sale will be used to pay down the company’s debt. On completion of the disposal, Palace said its proforma net debt was expected to be £25m, with a proforma LTV of around 16%. Including other anticipated sales – an Aldi in Gosport for £5.6m and £1.7m of sales from its Hudson Quarter residential development in York – proforma net debt and proforma LTV are expected to fall further to £18m and 12% respectively. Steven Owen, interim executive chairman, said: ““The disposal of the majority of the company’s industrial portfolio is a significant step forward in reducing its debt and LTV and means we can remain focused on maximising cash returns to shareholders. The company is in a strong financial position and its low leverage provides it with the flexibility and optionality regarding the timing of further disposals and other strategic initiatives. The company has capitalised on the recent stabilisation and, in some cases, the recovery of pricing in the investment property market to sell and market for sale selected properties.” To send feedback, e-mail samantha.mcclary@eg.co.uk or tweet @samanthamcclary or @EGPropertyNews