BANK HOUSE in Leeds has been sold for £10m in the latest major property deal in the city.
Palace Capital, which specialises in property investments outside London, has exchanged contracts to buy Bank House, on King Street, from a major pension fund for £10m cash.
The property, built in 1968 for the Bank of England, still houses its original occupiers on the bottom two floors, with law firm Walker Morris and Axa Insurance also current tenants. There is currently 8,800 sq ft of vacant space, which represents about 10% of the total space available.
Bank House produces a net income of £864,000 a year, representing a net yield of 8.1% after transaction costs which Palace Capital believes can increase to "around 10%" through active management.
Last August Palace Capital raised £20m with investors which enabled it to acquire Property Investment Holdings (PIH) and be ready to make acquisitions of suitable properties as the opportunites arose.
Neil Sinclair, chief executive of Palace Capital, said: "We have assessed a number of potential opportunities since the acquisition of PIH and, in the board's view, Bank House represents an opportunity to provide excellent returns for our shareholders.
"This is another example of how we are growing the company through regional and secondary commercial property acquisitions. We are continuing to seek and evaluate additional acquisitions of property portfolios and appropriate single assets and are positive about the prospects of further enhancing shareholder value."