Palace Capital NAV knocked as firm steps up development
Palace Capital has seen its net asset value per share fall by 3.9%, with the firm attributing the decline partly to a rise in development activity.
The regional property company’s NAV per share dropped to 391p in the six months to 30 September, down from 407p in March.
The fall was also impacted by a one-off capital gains tax of £1.7m during the period.
Palace Capital has seen its net asset value per share fall by 3.9%, with the firm attributing the decline partly to a rise in development activity.
The regional property company’s NAV per share dropped to 391p in the six months to 30 September, down from 407p in March.
The fall was also impacted by a one-off capital gains tax of £1.7m during the period.
But EPRA earnings nearly doubled to £6.7m, up from £3.5m a year ago, which Palace Capital said reflected the underlying strength of its investment portfolio.
Palace Capital made a total property return of 1.5% over the period, outperforming the MSCI UK quarterly benchmark of 0.8% and marking three successive years of outperformance.
The firm, which converted to REIT status with effect from 1 August 2019, is now looking to boost its £275.8m property valuation to £500m over the next three years.
Neil Sinclair, chief executive of Palace Capital said: “During the period we have stepped up our development activity, a strategy we believe is best placed to increase shareholder value in the long term by creating an even stronger portfolio that can meet the demand we are seeing outside of London for well-located, fit-for-purpose property that delivers higher quality income and capital growth.
“We are now seeking to increase our assets under management to £500m. We can’t hide the fact that although we are on the main market and in the FTSE small cap index, we are just not large enough to attract the investors we would like.”
Stanley Davis, chairman of Palace Capital, added: “While the significant capital expenditure we have deployed across a number of different properties has not yet fully resulted in a corresponding uplift in property valuations due to the time lag between completing capital works and letting the refurbished space, and therefore has had a slight impact on our NAV, I firmly believe this investment will support our future growth.”
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